piggy bank
The concept of a “sinking fund” might be as foreign to you as it was to me when I came across it a while ago. Just looking up the definition can be confusing since there are at least two uses for the term:

  1. A strategy for the repayment of a specific debt over a period of time
  2. A strategy for funding a known future expense
  • Historically, the term originated in Great Britain as a game plan for paying off national debt.
  • It was also used heavily in the railroad industry here in the U.S.
  • Investment companies define it as a type of staggered repayment that adds safety to corporate bonds.
  • In the business world, a sinking fund might be created for the expected replacement or repair of assets such as equipment and buildings.

For you and me, the most practical application of a “sinking fund” is to set aside a monthly amount to fund a future expense.

Some financial advisors swear by using sinking funds for everything and anything — from trivial holiday spending to important purchases like a new vehicle or home. Some even use them to create a budget that’s more predictable (for instance, creating one big sinking fund that averages all your utility payments so you ‘pay’ the same amount each month, regardless of billing fluctuations).
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ice cream cone
My most recent spending temptation was an adorable Jack-o-Lantern bowl I saw at Wal-Mart on the Saturday before Halloween. I imagined putting candy in the $2 bowl for our trick-or-treaters, and it would really liven up our Halloween. Theoretically, I was in the store to get a prescription filled, but spending an extra two bucks for the grinning bowl wouldn’t make that big a difference in my total. I was at the checkout before I realized that I really didn’t need this particular item, since it was only useful one night a year. That realization was enough to have me put the bowl back on the shelf. I haven’t always been so disciplined though.

Avoiding spending temptations is not easy, considering the fact that we are constantly surrounded by things to buy. The best way to avoid spending money is to know what triggers your spending impulses. Here are a few ways that might help you to say no the next time temptation strikes:
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staying fit
Getting fit or staying healthy is usually on the top of everyone’s goal list. While it is a worthwhile goal that will pour many benefits into your life, it should not be a goal that drains your wallet.

Here are the top four money mistakes you need to stop making while trying to get in shape.

1. Stop Looking for the Next Magic Pill

Several of my friends have had great success with a popular wrap company and another MLM company that sells shakes. Look, I think these companies have worked for many and have earned many individuals amazing incomes. However, you cannot just buy a product and expect to reach your goals. I bought products from both companies, and the weight did not magically fall off. Why? Because I was using them as a magic pill rather than overhauling my whole diet and exercise routine.

If you are not willing to put in the work to eat better and exercise now, then why would you think paying an extra $100 for fitness products would help?
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5 Tips for Affordable Travel

by Miranda Marquit · 1 comment

I’m in the midst of an eight-week travel extravaganza. While it hasn’t exactly been easy on my wallet, it also hasn’t been devastating for my finances. Here are some of the things I’ve done in the last year (and will probably do moving forward) to ensure that affordable travel remains a staple in my life:

1. Create a Travel Fund

I began setting aside money automatically each month in a travel fund a little more than a year ago. This fund is designed to help me save up money for travel. You can set up your own fund as well. I use a taxable investment account, but I know people who are more comfortable with a traditional savings account. When you are in a constant state of saving up for travel, it becomes more affordable for you.
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wired fence
Being frugal is generally praised. Your grandparents tell you how smart it is to be frugal. Your uncle boasts about how his refrigerator is older than you are. You read that if you save $5 each day for a year, you’ll have tens of thousands extra at the time you retire.

Now, I’m really frugal so please don’t look at this post as being an attack on the lifestyle. I drive the same make/model of car I drove 10 years ago although this one is a whopping one year newer. My laptop is so old it’s embarrassing to pull open in Starbucks (though it looks on at Dunkin’). And I sometimes pretend a month is actually five or six weeks when it comes to replacing my monthly contact lenses. So again, this post is not an attack on the lifestyle.

I would say though that some of the things we do fall into the ‘too frugal’ category. Right now in my life, I’m correcting course a bit. If you’d like to as well, keep reading.
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I’m obsessed with organization. You know — one of those people who writes something down just so they can cross it off. While I’m overly organized in most areas of life, one area I could stand to improve in is financial planning, and one practical way I could do this is to create a proactive financial calendar. After all, I have a daily/monthly/yearly planner and smartphone calendar for everything else… why not apply this to finances? Here are four key purposes this kind of calendar could serve in not only getting more organized, but getting ahead.

Help Remembering Time-Sensitive Tasks

This is perhaps the most obvious benefit of a financial calendar. Sure, you may pay the bills on time without reminders, but it’s easier to lose track of less frequent tasks like paying quarterly taxes, filing a yearly FAFSA, scheduling the appointment to have your taxes prepared, or signing up for medical benefits during open enrollment. All of these are time-sensitive, so plugging them into a calendar with built-in reminders will ensure you meet and beat deadlines without overtaxing your brain.
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