Does Anyone Know What A Sinking Fund Is And How To Best Use It For Personal Finance?
A reader asks…
Typically, sinking funds are funds that a company uses to finance major repairs, maintenance and or replacement of major items. Repayment into where the funds originated, or back into the sinking fund is required.
How would a personal sinking fund be ran and would it be beneficial?
(Scroll down to read responses).
December 13th, 2009 at 10:59 am
Get a list of you major assets that depreciate like a car or TV with the cost to replace. Divide the cost by the number of years that you will have the asset. That amount is what you save each year. Once you have a Sinking Fund, you can avoid debt.
See the link below and read about the Replacement Cost Budgeting.