A sinking fund is a short-term savings account used to make large purchases in the future. Some examples…vet bills, vacations, home maintenance, self-care, new appliances, etc. Sinking funds make it possible for you to pay cash for items you would normally finance and pay interest on. You don’t need to change how much you save per month to start building one. I’ll show you how to continue to build your emergency fund and one sinking fund at the same time without changing how much you save per month.