Sinking Fund: Your Shield Against Big Expenses and Debt
Your Money
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Moneycontrol•21-01-2026, 15:42
Sinking Fund: Your Shield Against Big Expenses and Debt
- •A Sinking Fund is a financial strategy to save small amounts gradually for future large expenses like education, marriage, or home repairs.
- •It helps avoid loans and their associated interest burdens and EMIs, providing financial freedom.
- •The fund offers mental relief by preparing you for upcoming large expenses and instills financial discipline.
- •Experts recommend keeping Sinking Fund money in a separate account, using options like Recurring Deposits, Mutual Fund SIPs, or savings accounts.
- •Regular, disciplined saving, even with small amounts, can build a substantial fund over time, protecting against debt traps.
Why It Matters: A Sinking Fund helps manage large expenses without debt, promoting financial discipline and peace of mind.
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