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Sinking Funds

A strategic way to save money for Self-care


As someone who loves her self-care routine, I used to blow money on my credit card, buying skincare products, facials, and other things to build up my ritual. I got myself in $1,000 of credit card debt. Since last summer, I’ve been able to get debt-free while still spending money on myself. My secret: a self-care sinking fund with automatic transfers.


It’s all about balance. I didn’t deprive myself of things I enjoyed while paying off debt. I just set up my money in a way that works for me, and let the automatic transfers do their thing. I have set savings accounts for set categories, and I can’t pull from my fun money category for gas. I can’t pull from my gas fund for self-care purchases. I’ve worked on my money with Financial Counselor, Beth Hunsaker, so that I decide what percentage of my paycheck I want going to each category. For self-care, I have it set to transfer exactly $112 a paycheck (every two-weeks) to go into my self-care savings. Then, when it comes time to pay for my lash appointment, I put it on my credit card (only the amount I knew going in I would have to pay), and right after the appointment, I pay off my credit card purchase with money from my self-care savings. 


Now, that’s me. Come meet with us and we will find what works for you. Some people like to categorize their accounts almost like a cash-envelope system, while others keep it to 3 or so categories. Some set automatic transfers by dollar amount, others use percentages. There are pros and cons to both methods—it’s just about finding what works best for you given your mindset and your situation. 

  • A good rule of thumb for how much money to set aside for certain things is the 50/30/20 rule:
  • 50% of paycheck for needs
  • 30% of paycheck for wants
  • 20% of paycheck for saving/investing

Within those three categories, you can break it down further if you want. For example, for savings, you may have a ROTH IRA, emergency fund, and grad school fund. For wants, I would put my sinking fund into that category. I also have a miscellaneous fun money HYSA. That would also go there. Does that make sense? 

The trick with this method of categorizing your savings and sinking funds? Automate! This way, you don’t have to worry about it, and you have already decided what you are willing to spend in each category before the spur of the moment shopping spree when you are more likely to make impulsive purchases.


Come meet with us and we can help you set up a sinking fund method that works for you! Everyone is different, so things are not one size fits all. And that’s the beauty of it! We love helping people personalize their finances! 

In short, sinking fund categorizations are a great way to prioritize self-care while also staying within your budget. It helps to balance present-you needs while also saving for future-you. 

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Last Updated: 12/12/23