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I Scored Floor Seats for Beyoncė’s Renaissance Tour Thanks to My Sinking Fund. Here’s How

I didn’t go into debt to see Queen Bey, and I enjoyed an action-packed weekend getaway.

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I’m obsessed with Beyoncé. (Who isn’t?) Over the past few years, I’ve been to two of her shows, and Beyoncé tickets aren’t cheap. As a personal finance editor who spends most of my days breaking down how to save and grow your money, I knew the best way to save for tickets while earning interest was to create a sinking fund. So before the Renaissance World Tour was even announced, I got started. I wanted to be financially prepared, so I created a budget for the ticket costs, travel expenses to Atlanta and even added in room for a new outfit.

When the big announcement came earlier this year, I was ready. Now that the big day is done, I’m glad I did what I did. I was able to comfortably afford tickets while also experiencing a fun weekend getaway with friends. And, as a mom and homeowner, I was able to hit my goal while still putting money toward other financial necessities.

How did a sinking fund help me save for Queen Bey? I’ll walk you through what a sinking fund is, how I got mine going, and how you can set one up for your next concert, vacation or other savings goal.

What is a sinking fund?

There are many different ways to save for a fun purchase or big goal, but I decided to go with a sinking fund. Here’s how it works.

A sinking fund is essentially a savings account, but the psychology behind it is a bit different. Rather than just putting money away, you’re saving for a specific purpose, according to Rita-Soledad Fernández Paulino, a financial educator and coach. Instead of moving money into one savings account for all your needs, you create a separate savings account, or sinking fund, for your goal, so your money doesn’t get tangled up with other savings goals or emergency accounts. 

“A sinking fund is a personal finance hack where you save a certain amount of cash periodically and earmark that cash for anticipated expenses months down the line,” said Joseph Gradante, CEO of Allio Finance

Sinking funds are good for recreational expenses like vacations or expensive gifts, but they also work for necessities like a car or a move.

“These funds can be used for almost anything, although most people use them when they’re planning for a specific purchase,” said Joe Camberato, CEO and founder of National Business Capital.

You can maintain various sinking funds via different savings accounts, too. It might be useful to set them up at separate banks so you’re less tempted to withdraw or transfer money from them. 

How I built my sinking fund

When I started my sinking fund for Beyoncé tickets, I didn’t open a separate savings account, though that might have made the process a little easier. Instead, I used my current savings account at Ally Bank, and was eventually able to separate my funds into buckets to help designate different savings goals. 

Since there wasn’t a time crunch for this goal, I didn’t deposit a set amount each week. Instead, I occasionally moved money -- $20 here, $50 there -- from my checking account. Some months, I didn’t contribute to my concert ticket fund at all. But I knew I wanted to save at least $1,000 in the fund over time.

I was able to reach that goal by the end of 2022, just when rumors began circulating about a new tour among the Bey Hive. I continued casually adding money to this account and, by the time I was ready to buy tickets, had saved $1,795 -- more than my target, and enough to cover tickets, transportation and everything else on my list.

Where to keep your sinking fund 

I kept my sinking fund in a high-yield savings account to earn a little extra interest, and I recommend doing the same. You may also come across high-yield savings accounts with a bucket feature to categorize your savings and keep your funds clearly labeled and distinct, like I did. 

A high-yield savings account also keeps your money safe and accessible, said Kendall Meade, CFP for SoFi. And unlike other high-yield savings products that set term limits or don’t let you add funds (like a CD), this type of account lets you automate transfers to regularly contribute money toward your goal and withdraw your funds when you need them.

If you’re worried you’ll be inclined to use the cash from your sinking fund, consider opening an account at a different online bank that takes more time to transfer your money. Or consider putting it in a short-term CD that matches the time frame of your financial goal, allowing you to lock in a fixed savings rate.

How a sinking fund differs from an emergency fund

You can use this savings method whenever you have a future expense, but you shouldn’t prioritize setting up a sinking fund over building an emergency fund first. An emergency fund is a crucial savings tool that can help you cover surprise expenses, like a job loss or car repair.

“A sinking fund is different from an emergency fund,” said Allio Finance’s Gradante. While sinking funds are good for regular or one-off expenses, an emergency fund is money you shouldn’t touch unless you’re facing an unfortunate event that could alter your financial path -- like a layoff or health scare, added Gradante. 

You also shouldn’t use any emergency funds toward your sinking fund goal. Even as a Bey Hive member, one thing was clear -- I wasn’t touching my family’s emergency fund for her concert. That would put me in a risky financial spot if my family encountered unforeseen circumstances.

How many sinking funds should you open?

Now that I’ve bought my Beyoncé tickets, I’m working on building three more sinking funds -- one for the upcoming holiday season, one for a family vacation and one for a new car. As my goals and priorities change, I may add more sinking funds. It keeps me organized and working toward my financial goals without overspending.

But it’s not about how many sinking funds you have. It’s more about how you’re prioritizing your finances. 

“The ultimate personal finance hack isn’t scrimping and saving every last penny or tediously tracking credit card points,” said Gradante. “It’s something a whole lot simpler: automation.” When setting aside money for a goal, make it a routine to save without much brain power or stress that comes with deciding how much to set aside each week.

But different savings approaches work better for different people. I didn’t automate my savings -- but I also wasn’t in a rush to save for Beyoncé tickets. Instead, I set aside money when I could, while still contributing to my emergency fund and most importantly, ensuring all my bills and debts were paid on time. 

How to fit a sinking fund into your financial goals

Starting a sinking fund can be challenging when juggling other financial concerns -- such as bills, debt and retirement. Here’s what SoFi’s Meade and other experts recommend in order of priority: 

1. Build a safety net of one month of expenses in your savings account. 

2. Pay down any high-interest-rate debt

3. Build an emergency fund that covers three to six months of living expenses. 

4. Start saving or investing for retirement. “A common rule of thumb is 15% of your gross annual income,” said Meade. 

5. Use additional savings toward other goals and sinking funds. 

These steps in this order may not work perfectly for you -- and that’s OK. You can use this process as a guideline. For example, you might feel more comfortable paying down debt while simultaneously working on an emergency fund. But if you’re worried about prioritizing your savings, this process can help you slowly chip away at competing savings goals.

Tip: If you have an unavoidable expense, like a tax payment, Meade suggests building your safety net (step one), and then working this expense into your monthly budget.

The bottom line

A sinking fund can help you avoid overspending or making an impulsive purchase you didn’t budget for, whether it’s Beyoncé tickets or a trip abroad. Setting your sights on a goal, then contributing toward it can help you plan for an upcoming purchase or expense -- rather than reacting to it.

Dashia is a staff editor for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.
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