What The Elle - ⛏️ Budget Hack: Sinking Funds

SINKING FUNDS

How to stop big auto-debits from derailing your budget

We hear it all the time: You’ve put in the work to build yourself a fab monthly budget, complete with all your bills, typical expenses, and wiggle room for fun. It’s going great, until halfway through the month, when you suddenly remember that a big, annual expense is due in a few days. So you adjust what’s left of your budget to make room for it … which might mean saying goodbye to restaurants or shopping or that treat-myself budget for a few weeks.

In the face of budgeting setbacks like these, it’s easy to feel discouraged, like you’ll never feel totally in control of your money no matter what you do. But when it comes to expenses that fall outside your monthly budgeting routine, there’s a way to smooth out the surprises. It’s called a sinking fund, and it’s one of the easiest ways to take the anxiety out of your day-to-day money management.

Here’s how it works.

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💡Money Tip of the Week

Is your savings account a high-yield savings account? Because there’s absolutely a difference — and the difference could cost you a bunch. The national average savings account interest rate (or APY) is currently about 0.23% — but a high-yield savings account (or HYSA) offers significantly higher interest, usually 20–25x that average.

Best of all, the rules on a HYSA are exactly the same: They’re both federally insured, and you’re still able to make six transfers per month. Only difference? One earns you a lot more money for your money.

A green collage of circle icons including a line graph, a scale, and a photo of dollar bills.

Where to Save for Short-Term Goals

Confused about where to stash your cash? We run down the pros and cons of five different options — from savings accounts to MMFs to savings bonds.

Break it down for me >

A woman sitting on a stack of coins in front of a line chart zig-zagging upward. Around her, a percent sign, two bills and two arrows float around. Illustration.

ICYMI: The latest on inflation

In this month’s CPI report, we learned that inflation cooled slightly once again in January. But dig deeper, and there’s more to the story.

Find out what changed >

roll•ing re•ces•sion (n)

A recently popularized term that some people believe describes the in-between economic waters we’re navigating right now. According to one economist, it’s what happens when “industries and sectors take turns going down, as opposed to declining more or less all at once.” So not as devastating as a hard landing, but nothing as ideal as a soft landing yet, either. 🥴

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“A screenshot of a tweet from user @freeduffsauce that says ‘f*ck mansplaining but i LOVE girlsplaining. like i just got my 401(k) girlsplained to me and it made so much more sense.’”

Links to save

File under “things the Ellevest community already knows”: Debt is just as emotional as it is financial.
This one warms our hearts. A heart transplant surgery at the University of California San Francisco made history recently: Everyone in the room for the procedure, from the patient to the surgeon, was a woman. 😎
Meanwhile, women are leaving powerful positions: Susan Wojcicki, CEO of YouTube, is stepping down to serve in an advisory role, while Nicola Sturgeon announced her resignation as the first minister of Scotland after eight years.
Bosses might have as much impact on their employees’ mental health as a spouse or partner — and more than their therapists. 🙀
From de-influencing to the rise of dupes, inflation is hitting influencers’ bottom line — and changing their business models.

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