You must have known by now that we are a huge fan of sinking funds. This is our most favourite category in our budget plan which we can’t live without.
This is the process of putting money away from the get-go specifically for big expenses that are planned and is billed monthly, bi-monthly, quarterly, or annually. These budget plans might be a need or a want; yet, you are giving yourself permission to spend guilt-free!
When the pandemic hit this year, we vowed not to travel internationally for 5 years; not until our biggest goal is hit.
We have frequently travelled within the state- not so much interstate, for at least once a year. But deciding to put on hold our travel plans changed the complexion of our longterm goals altogether.
We have allocated 1% of our monthly income for yearly travel plans only within Australia. We began filling up our travel bucket beginning of the year. This will ensure that the money is already completed when needed!
It must be noted though that before we had a budget life, we were spending the money that we don’t have by relying on credit card swipes. This was one of our financial blunders which took years for us to rectify.
Our family loves to travel and give the best experiences to Little Budget Tipster; mind you, it doesn’t have to be a luxurious experience. Traveling on a tight budget is very much possible!
For this year, we have booked two (2) weekend trips using our holiday sinking funds. We had spent only 42% of our budget in our recent weekend trip; which means that we still have the remaining 58% for our summer holiday next month.
Please see below breakdown of the 42% expenses from our recent short weekend trip:
It feels pretty good to have spent things for cash while having fun. No credit card payments to think about and strictly spending only the money that’s allocated for the purpose.
Creating sinking funds is perfect for the lifestyle that we wish to have. It means we do not have to go into debt just to have fun.
This is what intentional living is meant to be- spending with a purpose!