Avoid Loans: Master Big Expenses with the Sinking Fund Method

• Sinking funds help pay predictable large expenses like school fees or insurance without resorting to loans.
• It involves setting aside money monthly for future costs, spreading the payment backward without interest.
• Unlike emergency funds, sinking funds are for planned expenses you can foresee, not unexpected crises.
• Keep funds in accessible, low-risk accounts like separate savings to ensure availability when needed.
• Automate contributions and keep funds separate from daily spending to ensure the method's success.

Why It Matters: Sinking funds offer a simple, interest-free way to manage predictable large expenses by saving in advance.