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  1. 04-08-2011, 07:28 AM #1
    Russ
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    Default sinking fund question

    I have an acct that I put money in from every check for annual bills. Some of those bills, like our yearly propane, can vary depending on prices, weather and such. How much of a "just in case" factor should I add in?
    Russ

    Truck payments: 10 9 8 7 6 5 4 3 2 1 WAHOO!
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  2. 04-08-2011, 09:16 AM #2
    PrairieGirl
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    I would say, average what the cost of propane has been for the last 5 or 10 years and then add an extra 25% on top of that so you're covered. If you really want to make sure you have the cash to cover it, double the average.
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  3. 04-08-2011, 09:20 AM #3
    Russ
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    The propane was just one of the annual bills. There's internet, insurance and taxes in there as well.
    Russ

    Truck payments: 10 9 8 7 6 5 4 3 2 1 WAHOO!
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  4. 04-08-2011, 09:25 AM #4
    nuisance26
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    ~I don't have a sinking fund but I pad everything by 10%. This will probably be the first year in the last 10 that I will come very close to hitting or exceeding that 10%.~
    ~Constance ~DH ~DS 9~DD 7 ~DD 1
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  5. 04-08-2011, 10:16 AM #5
    tervsforme
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    I have a sinking fund for this as well. I haven't changed the amount that I put in there for the last 3 years. Since my taxes have gone down for the last 3 years, I have extra in there automatically. But if I were to put a bit extra, I do like the 10% idea.
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  6. 04-08-2011, 10:29 AM #6
    Greebo
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    You might want to subcategorize your funds so you can have different "fluff" factors.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

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  7. 04-08-2011, 10:32 AM #7
    PrairieGirl
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    oh.

    Well in that case, I'd again, average out what you've paid in years before and then add an extra 10-25% on top of that. I used to overpay all my bills by rounding up so if my elec was $35.75, I'd pay $40; if my heating was $167, I'd pay $180-200 and so on.
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  8. 04-08-2011, 10:36 AM #8
    frugalfriend
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    I think the 10% is a good amount, too. WTG on thinking ahead!
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  9. 04-08-2011, 10:48 AM #9
    Russ
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    Quote Originally Posted by Greebo View Post
    You might want to subcategorize your funds so you can have different "fluff" factors.
    Last year I went over my propane budget by about 8% but, for obvious reasons, I was under budget on my taxes. I really don't want to make this any harder than it is.

    I think I will go the 10% route and treat it as a hidden savings acct. If it gets too large, I will transfer the extra to the HELOC reduction.
    Russ

    Truck payments: 10 9 8 7 6 5 4 3 2 1 WAHOO!
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