What are Sinking Funds?

Sinking funds are smaller pots of money saved for a specific goal or known future expense.

People use cash envelopes or cash jars, or you can have lots of bank accounts. I use both cash jars and bank accounts. Cash jars are good for storing coins and you can make them free by using old food jars.

I love the idea of cash jars because I like visually seeing my money grow.

But I don’t like keeping a lot of cash at home because I don’t think it’s safe, so I opened 8 instant access savings accounts which attach to my current account. I opened these through online banking. Both cash jars and these accounts allow instant access and allow me to pay in when I want to.

I use the bank to keep larger sinking funds like Christmas and Car Tax because it’s not only safer, but I am also trying to increase my credit score as I want to apply for a mortgage in the next 12 months and having healthy bank balance will improve this.

These are some of the ones I have;

  • Car Tax
  • Car Maintenance
  • Christmas
  • Birthdays
  • Vets
  • Pet Food
  • Hair
  • Clothes
  • Scouts
  • Pet Food
  • Fun

Other ones I would like but don’t have yet are Holidays, School Clothes/Trips and Going Out.

They are really easy to make without spending any money or very little at least. Get a glass food jar and if you don’t have one you can buy the cheapest from the supermarket (when I went it was a jar of beetroot), eat the produce, wash and label. Easy! I also put the amount I want to save each month / week into the lid so I can quickly see what amount I need to put in.

I have made all of mine up but I only keep out what I’m putting into as it’s easy to get disheartened when you aren’t able to put into them every month, especially when you’re on a debt free journey like I’m on. The only jars I use right now is petrol, food and hair and in the bank I use Christmas, vets, pet food and car tax. For the other ones I just try and find the money when I need to. Not ideal I know but I have my emergency fund to fall back on if I am desperate.

If you want to know how much to save into each sinking fund jar/account, all you need to do is work out the annual cost of the category and divide it by the number of times you want to pay into it.

For example, if you are saving for car tax which is £210 a year and you want to put into the sinking jar monthly you would work it out as £210 / 12 months = £17.50

If you wanted to pay into it weekly £210 / 52 weeks per year = £4.04

If you want £600 for Christmas, you will need to save £50 a month or £11.54 a week. Larger goals like saving up £600 are easily met when broken down into smaller chunks. And having a financially stress-free Christmas is worth saving all year for in my eyes!

I would personally always round these amounts up to cover the normal increases and to make it easy to work with.

Should I have Sinking Funds if I’m in Debt?

Absolutely yes!!

By having sinking funds, it can save you getting into more debt! This year I have consistently paid into a sinking fund for Christmas for £50 per month and this is to stop me using my credit card like I did last year (Why I put Christmas on a Credit Card This Year).

If your main priority is to be debt free like me, it makes no sense to use all your available funds (disposable income) into every sinking fund else you won’t have anything left to make those extra debt payments so choose the main ones you want to stick with and leave the rest for when your debt free.  

Here is another free printable to help you with your saving goals.


Is a £1000 Emergency Fund Enough?

What is it?

An emergency fund is a pot of money kept in an account that can be easily accessed should you need it in the case of an emergency. An emergency could be classed as anything to happen that is unexpected like car repairs, washing machine breaking down, emergency dental care, house repairs etc …

Although you can plan for some types of emergencies using sinking funds, you can’t plan for them all which is why an emergency fund is so important.

How Much is Enough?

An emergency fund, when built up big enough should be able to not only cover the above types of emergencies but also cover your income if you found yourself out of work. Generally, this is recommended by financial experts as being around 3 to 6 months’ worth of expenses. For example, if your expenses are £1500 per month, then you should have an emergency fund between £4500 to £9000 ready to access straight away (3 x £1500 = £4500 or 6 x £1500 = £9000).

£9000 seems a lot, doesn’t it? It would give you peace of mind though, I know it would for me.

According to Finder (2021), 9 % of people in Britain have no savings at all and 41 % wouldn’t be able to be out of work for even a month with no pay, another shocking reminder why savings and emergency funds are so important.

Should you Save an Emergency Fund before Paying off Debt?

Yes! Definitely!

You should save your emergency fund first before making those overpayments on your debt. Then when you have a minimum of £500 to £1000 you can start overpaying on debt. This will make sure that you’re covered for when those pesty emergencies happen and gives you peace of mind knowing when they do happen you don’t have to go further into debt to get the repairs fixed.

Starting to Build Your Emergency Fund

When you first start building an emergency fund, I found that starting small was the best way for me, so my first emergency fund was £500. The problem with an amount as low as £500 is if two emergencies happen at the same time well your pretty stuffed aren’t you?!

And I don’t know about you, but many things break at the same time for me! Last year my 11-month-old washer broke and I had a leak through my living room ceiling from the bathroom all within days of each other. The £500 only just covered the repairs for both and then a week later I had to pay for new tyres on the car which I was then forced to put on a credit card.

Life just happens this way doesn’t it? Well, it does if you don’t have an emergency fund.

Learning my lesson, I decided to follow Dave Ramsey’s advice and save an £1000 emergency fund which I kept in an instant access savings account connected to my current account so if I needed the money I could do an online transfer immediately.

Then life happened. My car goes in for an MOT and surprise surprise, it fails with the repairs costing a whopping £606. If I kept only £500 fund I wouldn’t have covered the costs. Luckily, I had my £1000 emergency fund and could pay in full with cash! Phew!

But then a few days after getting the car back, I was sitting in my living room waiting for my daughter to come out of the shower and I noticed a shiny spot on the wall. On closer inspection, I rubbed my hand across the wall and it was wet!! I rushed upstairs and after taking off the bath panel, to my horror the underneath of the bath had an inch of water in it! What an absolute nightmare. I soaked up the water and pondered getting a plumber out.

I had just under £400 left of my emergency fund so I decided to try and fix the problem myself first

I know what you’re thinking, I have zero plumbing skills but the last 3 plumbers I have used have either ripped me off, not completed the work they were paid for or done half a job, so I really don’t want to waste anymore money.

As I write this post, my bath panel is still off whilst I dry out the floor. I have sealed around the bath taps which were loose and could have been allowing water to seep through and I have put a small bowl under the pipes to catch any more of the water. It’s not flooding anymore but it’s also not fixed. But it will do for now.

Anyway, I digress.

Is £1000 enough for an emergency fund? I would say no it’s definitely not enough.  

Not wanting to disagree with Dave Ramsey and other financial gurus out there but what does £1000 really buy these days? With inflation running typically around 2 % (ONS, 2021) (Macrotrends, 2021) your money buys a lot less than it used to, so maybe an £1000 emergency fund is a little dated now?

I mean, it’s a pretty good place to start but my plan is now to save at least £1500 and then continue to contribute with £50 a month until it gets to 3 – 6 months’ worth of expenses. I will continue to do this until all my debt is repaid and when I’m debt free I will 100 % focus on building this up to at least 6 months of expenses. I know this will give me peace of mind then.


Finder (2021) Savings Statistics: Average Savings in the UK 2020. https://www.finder.com/uk/saving-statistics

Macrotrends (2021) UK Inflation Rate 1960-2021. https://www.macrotrends.net/countries/GBR/united-kingdom/inflation-rate-cpi

ONS.GOV.UK (Office for National Statistics) (2021) Consumer Price Inflation, UK July 2021. https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/july2021

No Spend Month

After a very expensive August with Summer holidays, and the car costing the best part of £600 to get fixed, I have decided to have a very much needed No Spend Month in September to curb the Summer holiday spending and pay back the Emergency Fund!

The last time I did one of these was in January so using the tools I made during that No Spend Month I will hope for another successful month.

I made myself a no spend challenge sheet which you can download for FREE below, which really helped to keep me focus and NOT spend any money outside of my very strict budget of £50 per week. Oh and I loved colouring it in! My budget works out at £20 per week for petrol and £30 per week for food shopping and anything else.

Yes this is a tight budget, I realise that. I will start a new job next week which will be working from home so my petrol costs will be minimal.

My food budget of £30 per week is for 1 adult (me) and my nine year old daughter. The pets have their own little sinking fund. It is tight but doable as long as I meal plan and use ingredients I already have in. Basically organisation is key here!

This is day 1 of the No Spend Month so I have drawn out my £50 for the week and I will now take all my cards out of my purse/phone case so I am not tempted to spend.

If your doing it with me, let me know how your getting on in the comments below and GOOD LUCK!!

My No Spend Month – January 2021

I have never done a no spend anything really but after reading ‘The No Spend Year’ by Michelle McGagh which I picked up earlier this year from the library I have been inspired to do something similar. I am not sure if I could commit to a whole year, but a month definitely seems doable!! During the no spend year, Michelle saved a whopping £22k which is just amazing. And If I had the same success as her I would really be debt free! Wow, just wow!!

My Why

I have a little under £20k to pay off before I am completely debt free with my original plan being to be debt free by the end of this year, so I thought I would start 2021 with a no spend January to give me a great start on the year. Who knows, if it goes ok, I may keep going.

The plan is to reduce/stop altogether the frivolous spending I do on takeaways, Amazon, over budget spends on birthdays, Christmas, days out etc. I want to not only keep a strict budget but take the time to find fun things to do without spending any money. I want to break the cycle of wanting stuff and start to live a more minimalistic, financially secure life.

I want to get time back time with my family and am even hoping to learn new recipes and batch cook meals instead of eating the same food all the time or having takeaways. I have never done anything like this before but since I started my blog and my Instagram account https://www.instagram.com/themoneywisemum/ I can see it’s really helping to keep me accountable whilst I am on my journey towards financial freedom. Not only that, its great to have the community of like-minded people around you.


I need some rules for my no spend month as I will still be paying normal fixed debits like gas, electric and rent and will have a strict unbreakable budget for all the variable type spending like food and petrol. Some other items I will continue to pay is my daughters clubs because I don’t want her to go without and in the last year all her clubs stopped or went online so if we have any normality next year, I’d like her to continue doing some of the things she loves. I will also still be paying for Sky but only because I am stuck in the contract for the next 12 months.

Rule 1 – No spending on ANYTHING outside the budget

Rule 2 – Kinda falls in with rule 1, but NO TAKEAWAYS

Rule 3 – Budget for the month to be posted on my blog by 1st January for accountability purposes with an actual spend being posted by 1st Feb

I have made my no spend challenge tracker and will now spend the few days sorting my budget, finding some batch cooking recipes and looking at any fun things we can do over the next month. If your thinking of trying something like this, let’s do it together!

Why Did I Receive a Refund?

In 2018 I decided to do a masters in research degree, a one-year course finishing in time for me to start teacher training and a Post Graduate Certificate in Education (PGCE) in Biology in September 2019. That was the plan anyway.

However, there were problems with the course resulting in me deferring until September 2020 after my teacher training and PGCE was done. Last month I arranged to start back but the course had changed resulting in me being unable to complete it easily.

I didn’t want to lose the money I had paid so I looked around for another masters at the same university and I came across the master’s in education. I was so happy I found this because it would relate more to my new career, it was flexible now I worked full time with lectures being on Saturdays or in the evenings via Teams and I didn’t have to complete as many units.

The PGCE I had already completed gave me 60 credits towards a masters in education, so I would only have to complete 120 credits. Every Masters course is 180 credits.

And this – it was £2222.50 CHEAPER!

And this – it was £2222.50 CHEAPER than the other Masters!! I mean I didn’t plan it like this, but I will definitely take it. The only downside is it will take me two years to complete but with my side hustles and working full time now that will actually work out better for me.

Win Win!!

I thought putting the cost of the masters onto a credit card was the best thing to do as it was an investment into my future, but it wasn’t. I should have saved up.