When to use it
Use it when irregular but predictable costs keep upsetting your budget.
How to apply it
- List expenses you know are coming in the next year.
- Estimate the cost and due date of each.
- Divide each cost by the months remaining to get a monthly amount.
- Set aside those amounts each month, in separate pots if possible.
- Spend from the relevant pot when the expense arrives.
Tip: Keep sinking funds separate from your emergency fund so planned costs do not drain it.