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The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt.
Sean Pyles
You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live, and they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.
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This is thanks to Bilt's three new credit cards, the Palladium Card, Obsidian Card and Blue Card. All three can turn your housing payments, rent or mortgage into flexible rewards so you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.
Sean Pyles
Built Points can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments, and so much more. Built Points have also been ranked by top publications as the industry's most valuable point currency.
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Sean Pyles
BILT cards are issued by column NA member FDIC pursuant to license for MasterCard International Incorporated. Today's episode is sponsored by Spectrum Business. What happens when your Internet drops during business hours and you're the one running the business? Say goodbye to your to do list unless that list involves panicking and having trouble getting any actual work done.
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And Spectrum Business offers 100% US based customer support 24. 7 to help you stay up and running. That means you get actual help, not submit a ticket and hope for the best.
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She told us she was actually a little hesitant to switch at first since she'd been using a different service for a while, but after a year with Spectrum, she's actually had a really good experience. Her phone gets strong, reliable service and it automatically connects to Spectrum WI Fi everywhere.
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Sean Pyles
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Longtime listeners of Smart Money know that
Sean Pyles
I am the sinking fund master.
Host/Announcer
But how do you actually set up
Sean Pyles
this brilliant savings account strategy? This episode, we are sharing my secrets. Welcome to NerdWallet's Smart Money podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Pyles.
Elizabeth Ayola
And I'm Elizabeth Ayola. As Sean alluded to, maybe didn't allude. He just told y' all, we're going to be diving deep into syncing funds today and specifically how to set up your own sinking fund system. I'm actually pretty excited to have this chat because now I feel like an authority in sinking funds because I finally set some up.
Sean Pyles
So I'm so proud of you, Elizabeth. Yes. Clapping over here because it seems like when we first started working together, you
Host/Announcer
were a little bit hesitant.
Sean Pyles
You thought it might be a little bit overly complicated, but now you're seeing
Host/Announcer
the light and you realize the system is so helpful and it makes saving money so easy.
Elizabeth Ayola
Yeah. And in my words, I thought you was doing way too much. I was like, sean is doing too much. What is all it is.
Sean Pyles
I'm always doing too much. But guess what? It works out really well for me.
Elizabeth Ayola
And you know what, Sean? I'm taking a leaf out your book. It's working out well for me, too.
Sean Pyles
I'm so happy to hear it. And we actually received a number of questions from various listeners asking about how I set up my system. So we're going to go into really specific tactics in this episode. But here is one question that a listener sent us via a voicemail on the Nerd hotline. Let's give it a listen.
Listener
I'm currently setting up my saving system, and I really like his system of how he has multiple accounts and they all have a specific purpose. And I'm trying to figure out what my system is right now. If he could explain in the podcast in detail what his system is, how many accounts they have, what are they used for, what type accounts are they, money markets, are they, et cetera, et cetera, I would find that very helpful. And thank you so much. Bye.
Sean Pyles
We should probably start by talking about what sinking funds actually are, in case people don't know. The general idea is that you have different savings accounts for different purposes. Like, you might have one. That is your emergency fund. You might have one, Elizabeth. That's for Your kids, summer vacations. I have one that is just fun money. It's all about allocating different pots of money, different values, and it's actually fairly simple. And it can get complicated if you want over time. Like, I have over half a dozen
Host/Announcer
savings accounts right now.
Sean Pyles
You don't have to be that extreme right off the bat.
Elizabeth Ayola
So how many did you start with, Sean? How did we go from one to half a dozen? Or did you just start off strong with a whole bunch of accounts?
Sean Pyles
No, I started off with, like, three, I want to say. I mean, it's been so many years since I set up the system, it's kind of hard to remember. But I know my first one was my emergency fund. And then I figured I should probably have a Fun Money account. So those were kind of my two core accounts to begin with. And then after that, I was like, well, I have a house now. I should save money for home repairs. And my car is going to need to be replaced or repaired eventually, too, so let me have another account for that. And then I hate my student loans, so I have another account just for the money that I pay off my student loans with. So it has gotten more complex over time. But you don't have to have these accounts forever. Like, I had one account that I used to save money for my certified financial planner education, and once I stopped doing that, when I passed my exam, I closed that account. So you can have them for just a season of your life. Yeah. There's no penalty or issue that really comes with closing a savings account, so you can easily do that.
Elizabeth Ayola
I guess what came to mind when you said you don't have to have one permanently is that you can maybe repurpose the accounts.
Sean Pyles
Right.
Elizabeth Ayola
So you may have a goal, you tick it off, and then you use the account for something else. Or you can close it.
Sean Pyles
Yeah, I decided to close it because, as you said, Elizabeth, I'm always doing the most all the time. So I figured, let me actually scale things back and simplify my finances just a little bit.
Elizabeth Ayola
Yeah, I respect it. And as you're talking, I'm also thinking that these different accounts can have or be used for different financial values.
Sean Pyles
Yes. And that gets to the idea of mental accounting. And this is actually a behavioral bias that we're all susceptible to, but it's kind of a good one. The idea that if we have different prescribed values to different pots of money, we won't intermingle them as much. And with sinking funds, this is really helpful because you're less likely to tap into your car repair fund. If you end up overspending on a weekend out and you don't have as much money in your fun money account, you might just not spend as much money going out because you've just had this divide and it feels kind of bad and wrong to rob Peter to pay Paul to fund the night of going out when you should be saving for your car repair. Right. Does that make sense?
Elizabeth Ayola
It makes complete sense. And as you're talking, that is how it's been so helpful to me. We'll talk later about what my pots are, but because money is allocated for something specific, I'm like, nope, you can't take it out for that. You don't have it in your budget, so you don't need it right now.
Sean Pyles
Yeah. And one thing I really like about this strategy as well is that it helps you clarify your financial goals. If you think about what you could be saving your money for and then you set up a way to actually save money in this different account, it helps you make progress on that and know what's important to you and what's not important to you. Like, if you really love traveling, you might want to have an account that's just for travel. If you don't care about having a car, if you live in a city where you don't need one, then don't have a car account. And so you said that you've set up some sinking funds. I want to hear about them in a minute. But I'm wondering just off the bat, what you have found feels different about how you're managing your finances since you've set these up.
Oh.
Elizabeth Ayola
Oh, my gosh. Before, it was just a pool of chaos. Money, money. And yeah, it was savings and then everything else. That. That was my system. Right. I would spend for things and obviously I would know when, okay, my big spending account was getting low. But then like you said, I didn't have specific goals outlined or rather where the money was going for these goals. So then I've spent all the money for the goals by the end of the month and it's like, oops, let me try again next month. And then I would find myself in that cycle.
Sean Pyles
That's part of why this is key too, is because with you are doing what's called paying yourself first, you are automatically putting money into your savings account before you have a chance to spend it on something else. Because we all know if we just hope that we're going to have 50 or 100 bucks saved or left over at the end of the month to put into our savings account. We might not actually have it left because we'll be spending it on other things that pop up.
Elizabeth Ayola
Oh, absolutely. And I think something else that was going on in my brain is like, well, I'm saving for retirement. I'm saving in my emergency fund, so. So other girls don't need to be saved for. But that's not true. Especially big ticket items like travel or car repairs. Actually, they do need to be saved towards. Because then the big expense come and it's like, well, I have savings, but it's not earmarked for those specific things, if that makes sense.
Sean Pyles
And it can feel so good to actually use the money that you've been saving in one of these accounts. Like, I had a bunch of money saved for my wedding and for my honeymoon, and I was just reveling and spending it every single day because I knew that I was actually having the fruits of my labor. I've been saving for years for this event, and I was finally able to really enjoy it and not worry about whether I had enough money to cover all these expenses, because I knew I did. It was right there in my account. It just felt great.
You're onto something about that.
Elizabeth Ayola
Because even when I'm on vacation and I'm spending, I usually don't have an allocated pot for that. It's just again, out of my big pot. And then again, it's just like kind of guesswork. Well, am I spending too much? How much is left over? What else do I have to pay for versus saying, okay, this is an exact amount that I have for spending on vacation and I'm going to enjoy it. And when I get to zero, I'm not going to feel bad about it.
Sean Pyles
Yeah, and it can feel bad when you pull money to cover an emergency expense and suddenly your emergency fund is less than it was. You've been working up months or maybe years to get it to three to six months, if you're lucky to do that. And then suddenly you're back down to maybe only having one month of expenses covered. And yeah, it can feel tough. But also know that that amount that you had saved prevented you from going into debt. You didn't have to pull out a credit card to cover that expense. And you'll just gradually rebuild the savings up over time.
Yeah.
Elizabeth Ayola
I would say another thing is that it has reduced my mental load. All the thinking. As you know, I'm a parent and I have to think for two. And I don't know who made me an adult, but I'M also an adult who has to pay bills and stuff. So, you know, not having to think about where is this money for this expense gonna come from because it's already allocated in an account has been such a stress reliever for me.
Host/Announcer
Yeah.
Sean Pyles
And as someone who's a planner and an organizer, I just find that it gives me a lot of peace of mind to know that without me having to actively manage my money, everything is going exactly where it needs to. And I can just check on it by opening the app on my phone to check my banking account or just logging in on my computer and there it is.
Elizabeth Ayola
All right, let's move on to where we're going to put this money for these sinking funds. A high yield savings account, in my opinion, is the best vehicle for this money. Why? Because it's liquid. 2. Because you're earning interest on that money. And for those out there who think a high yield saves account is an investing account, it is not. Your money should not disappear overnight, especially if you put it in a FDIC insured account.
Sean Pyles
Yeah. And building on that, I would recommend that folks check out NerdWallet's roundups of highlight savings accounts because they change on a regular basis and the account that was best this month maybe wasn't best last month and vice versa. So just get a feel for what the current market is like and what kind of accounts might work best for you. Because there are so many online banks that do offer high load savings accounts that it can be hard to choose which one is really right and which one might be best. But know your banking style. Like if you really like to do online banking and mobile banking and have it on your phone, then you might want to go with a bank that is a little more high tech than a credit union, which might be, you know, more in your community, but maybe not as savvy.
Elizabeth Ayola
Yeah, and something I'm going to flag, a mistake I made when opening my sinking funds is I did not look at the minimum balance requirement. And sometimes these banks will offer you or dangle a good rate in your face and you're like, wow, this is really high. But it comes with strings attached. Like you have to have a certain minimum balance and maybe if you have a lower goal for your sinking fund, I don't. Let's say you want to save $400 for something and a minimum balance is $500, then that might be something that you want to keep in mind. So look at the fine print before you open the account.
Sean Pyles
Yeah, a lot of high yield savings accounts do not have a minimum balance, which is great, although they can have sort of the inverse, like a maximum amount at which you'll earn the higher rate. And then above the amount that you have in that account, you might get a lower rate on what you're putting into that account. So just be mindful of that, too. And I agree with you that high yield savings accounts are typically the best option for sinking funds because they're so flexible, they're adaptable. A lot of these banks allow you to make what they're what's called sub accounts, where you can have multiple savings accounts. And that's really the key to a robust sinking fund strategy is having multiple accounts. And it just is simple. And this is in comparison to something like a certificate of deposit, a cd, where you could, in theory, use it for your sinking funds, but know that the money that you put into this account is going to be locked up maybe for a year or five years, whatever the term might be. And you are possibly getting a better rate than you would get from a High Yield savings account, depending on the CD and the High Yield Savings Account. But again, if you need to tap that money in an emergency or if you have to buy a car because your car broke, then you might actually lose some yield and you might face a penalty for withdrawing the money early. Again, it's just not as liquid and flexible as I think sinking funds should be.
Elizabeth Ayola
Yeah. So think about what your goal is, your end goal, before you open the account, especially a cd.
Sean Pyles
Yeah. Okay. Well, let's get to some of the nitty gritty about actually setting up the system, because that's what everyone has been asking me about. And before we do that, one quick question I have for everyone listening and watching is, why do you want these accounts? What's really the goal behind them? I think, Elizabeth, you and I outlined what sinking funds have provided us in our financial lives. But everyone who's consuming this content, however you're consuming it, just understand what you want to get out of it. Is it to be more organized? Is it to save up for a big event or a trip? Just really understand why you want to do it. That will carry you through some of the little administrative hiccups that you might face along the way.
Elizabeth Ayola
I want to flag that your emergency fund should come first. So it's great that you have that goal of saving for vacation or buying a gift for a loved one, whatever it is, but you want to have that emergency fund there first so that in case of an emergency, you're not tapping into One of your sinking fund buckets to cover that.
Sean Pyles
Right. And then once you have the emergency fund set up and you're continuing to fund it, at that point you can begin to look into other potential sinking funds. We mentioned a few that you and I. I have, Elizabeth. Like, it'd be a travel fund, home repair fund, a debt payoff fund could be really helpful. And one of my favorites is just my fun money account. That's for things like going out to eat or buying something that's a little superfluous or that's actually where most of my vacation money comes from, is the money I'm putting into my fun account.
Elizabeth Ayola
But I have a question for you, Sean. So what is the difference between. Or maybe it is the same thing. If you just have an account that you use to spend, that's your spend account, what would be the difference between a regular spend account and then a sinking fund Fund money account, like a checking account.
Sean Pyles
This is where it can get a little squishy, admittedly, where I tend to not try to tap into my fun money account until my credit card bill is due. And I know I have to cover some expenses for some superfluous fun things that I did. Or I have a trip and I'm like, okay, I just bought airplane tickets to go on a vacation, so I need to cover this. And that was a fun thing I'm spending my money on. Let me just tap what I have in my fun money account.
Elizabeth Ayola
So it sounds like, like there's some flexibility in how you use these accounts.
Sean Pyles
Definitely. Especially when it comes to what's in your checking account and what's in your fun money account. For me, like, I kind of use both to cover some of my ongoing day to day expenses. Like if I'm just going to the corner store to get a sandwich in the middle of the day, that is probably going to come from my checking, even though it's kind of a want. And the fun money account is basically like a wants expense account.
Elizabeth Ayola
All right. Now, I think this is one of the most important parts. And when I was setting up my sinking funds, this is what took me the longest. Looking at your budget and knowing how much to allocate to each of your funds. And Sean, when I tell you I went down a rabbit hole. This was an all day project. Okay. Opening the accounts all day.
Host/Announcer
Okay.
Elizabeth Ayola
Opening accounts was the easy part. So I was like, well, hmm, maybe this is a good time to actually revise my budget. I started finding things that I don't need to be paying for anymore. And cutting those off, I started logging into all my accounts. I started doing some comparison shopping. Hey, am I paying too much on electricity? I created a spreadsheet and included all of my bills and the links to all of the accounts and the passwords, because part of those hours were taken trying to figure out my passwords for each account, of course.
Sean Pyles
Such a pain, I know.
Elizabeth Ayola
But in the end, I was able to see exactly what's happening with my money right now. I usually do a check in once a quarter, but hey, time and time to do it and then see how much I have left over to allocate to each of these pots. It was such an annoying but satisfying I. You couldn't tell me anything by the end of the day.
Sean Pyles
That sounds eye opening, though, because now you are so much more in control of your finances and you know exactly where every dollar is going. And for folks who maybe don't want to do a full deep dive like Elizabeth did, which can be helpful if you really need that refresh. We always go back to the 50, 30, 20 budget, right? Where 50% of your income is covering needs. 30% goes to wants, 20% goes towards extra debt payments, savings. So you're going to tap that 20% when you're thinking about what you're going to be putting into these different savings buckets. And there is no prescriptive way to do it. Except again, you probably really should prioritize that emergency fund first and foremost before putting all the 20% into your vacation fund. But it's subjective and up to you, and it takes a while to really find the right balance. I know when I first set the system up, I was tinkering with it almost every month just to get a feel for what seemed right. And now and again, I still change it, just depending on where my goals are and what's a priority this month versus what was a priority six months ago.
Elizabeth Ayola
Thank you for saying that. Because I realized by the end of the day, when I had tried to calculate all the percentages for each account, I was like, this doesn't have to be rigid. Let's see how it goes for the first couple of months and we can adjust, increase, decrease, create more accounts based on what we find.
Sean Pyles
Yes.
Elizabeth Ayola
All right, we'll be back in a minute.
Sean Pyles
Stay with us.
Host/Announcer
The following is a paid sponsorship, not an endorsement by NerdWallet's editorial team. Today's episode is sponsored by Bilt.
Sean Pyles
You've heard me talk about Bilt as the loyalty program that lets you earn points on rent wherever you live. And they just leveled up even more. As of 2026, renters and homeowners can also earn up to 1.25x points on their housing payments.
Host/Announcer
This is thanks to Bilt's three new credit cards, the Palladium Card, Obsidian Card and Blue Card. All three can turn your housing payments, rent or mortgage into flexible rewards so you can choose the card that fits your lifestyle without missing out on points and exclusive benefits.
Sean Pyles
Built points can be redeemed at top airlines and hotels, Amazon.com purchases, future rent payments, and so much more. Bilt points have also been ranked by top publications as the industry's most valuable point currency.
Host/Announcer
Your housing payment is most likely your biggest expense. Make it your most rewarding. Find the card that fits your lifestyle and apply today at joinbuilt.com smartmoney that's J-O-I-N-B-I-L-T.com smartmoney make sure to use our URL so they know we sent you. Terms and limitations apply subject to approval and eligibility.
Sean Pyles
Bilt cards are issued by column NA member FDIC pursuant to license for MasterCard International, Inc. Today's episode is sponsored by
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Sean Pyles
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Sean Pyles
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Host/Announcer
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Sean Pyles
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Elizabeth Ayola
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Sean Pyles
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Sean Pyles
point, you should have what your goals are and you should know roughly how much money you could maybe put into each of them, either as a dollar amount or as a percentage of your paycheck. And then here's the key. Setting up direct deposit. We are very fortunate to work at a company called NerdWallet, where we are allowed to have direct deposit from our paychecks into multiple accounts. And that is so helpful. And that's how I've been able to do this really seamlessly. Although I don't know if I've told you this, Elizabeth, one time I broke our company's system. Did I tell you?
Elizabeth Ayola
You did tell me.
Sean Pyles
And I'm gonna do shocks again. What?
Let me tell you how, because when you set up all the different accounts that you can have on the back end and the percentage of your income that you wanna go to each account, it said that you can have 10 accounts. And I thought, great, I've got 10 accounts. Let me set this whole thing up. And turns out it actually, at that time, wasn't able to support 10. 8 was the correct number. And so after a bit of back and forth with HR and me actually not noticing for like a full month that I wasn't getting all my money, which was my bad, I sorted it out and now I have kept it to just eight to keep things easy and to hopefully not overstrain their system. But yeah, if you can set things up through your employer, that's probably going to be the easiest. But double check, do what I didn't do that one time, make sure that all of your money is going exactly where it should be. And you can do that just by looking at your pay stub.
Elizabeth Ayola
And if you are not as lucky to have an employer that allows you to break the system as Sean did, then you may have to do a little bit more work on your end in terms of opening these account. And most accounts will allow you to do, I'm always saying, direct debit, which is how British people say it, direct deposit.
Host/Announcer
Yeah, that's what we say in the States.
Elizabeth Ayola
Yeah, yeah, yeah. Straight from your account into that, that savings account. But something I will say is cash flow is important here. So if you're going to have it coming out on the 1st of the month, 15th of the month, make sure that you have enough money in there, otherwise you might find yourself in a bit of a mess.
Sean Pyles
Yeah, I would like folks to give maybe a buffer of a day or two after you think when your paycheck is going to hit to have that money come out so that way you don't end up overdrawing your account. And one big thing we haven't acknowledged here is that a lot of what we're talking about so far is actually best for people who have a really steady income and a predictable paycheck. For people who are maybe freelancers or get paid on a regular basis for whatever reason, you might not want to have it as automated. You could maybe have a smaller amount automated of like 50 or $100 each two week period. Whatever cadence works for you. But just make sure that you are going to have enough coming in to cover what sort of automatic deposit you have going out. Because you don't want to get in the situation where you are pulling out too much from an account and then have to go back and correct everything because you just don't have enough cash in your checking account.
Elizabeth Ayola
That's it. And I think that's where start slow is really important. And even if you're aspirational and want to have 10 like Sean, maybe you start with two, right? And then you build your way up. And once you have a good rhythm with your cash flow and with your automatic deposits, then you can build more.
Sean Pyles
And that brings me to the next thing I want to talk about. Here is what you should not do with your sinking funds. One is set up too many too quickly because that can get really confusing and you might end up making accounts for things that you don't care about. Another one is not actually putting enough money in each account to make meaningful progress. Yes, we all want to be able to fund our vacations and buy a new car and have our emergency fund and have money allocated for home repairs. But if you can only put $25 into each account on a bi weekly basis, you're not really going to be making a lot of progress on each of them. So I would say maybe consolidate, focus on the most important ones and try to get a little bit further ahead before you expand out to other goals.
Elizabeth Ayola
I feel a little slighted, Sean, and I know that was unintentional. One of my sinking funds. And also tell me what you think about this as the sinking fund expert. One of my sinking funds is for gifts. Is that a sinking fund or is that a savings account? Because I find every month I'm buying somebody gifts for their birthday and again, where's the money coming from? So I am allocating money for that, but it's not a huge amount. It's like, I don't know, $50 a pay period. Right. That's okay because maybe I'm giving a gift card this month, or maybe it's. I don't know. You know what I mean?
Sean Pyles
That goes back to knowing how much money you need in each account for each goal. So for my house fund, a rule of thumb is to save between 1 and 3% of your home's value each year for a pay repairs. So over the course of an entire year, that's the amount that I'm putting into my home repair fund for you. If you know that you're spending maybe 50, $100 a month on gifts for people, you really just need to have that amount in your sinking fund. And it's okay if it's revolving and you're not accruing this massive balance because you're deploying it as you need to. It just so happens to be that you're deploying it on a more regular basis than you would something like a vacation fund. That's okay.
Elizabeth Ayola
Okay. That's what I thought. Thank you, Mr. CFP.
Sean Pyles
You're welcome. And thank you for reminding everyone that I am a certified financial planner professional.
Elizabeth Ayola
I'm proud of you. I must. I must.
Sean Pyles
So, Elizabeth, does anything else come to mind for you about what not to do when setting up a sinking fund? Having just set this up yourself, the
Elizabeth Ayola
main thing is credit cards. So I use my credit cards to pay for many things, and I have to be mindful to pay off the balance with the money from the sinking fund so that again, I have a real idea of what I'm spending the money on and it's allocated properly just to make that mental connection. Connection versus spending. And then, you know, forgetting that there's money allocated to pay for that thing. Yeah.
Sean Pyles
So using the money in the account for its actual intended purpose.
Elizabeth Ayola
Exactly.
Sean Pyles
Yes.
Yeah, I get that. And that can be a challenge too, because sometimes I feel tempted to dip into what I have in my emergency fund if I've had, like a really expensive month. And that's not actually an emergency, it's just me overspending and not. Not listening to what I set my budget up to be. So I try not to do that as much as I can, but I get the appeal. It can be really tempting.
Elizabeth Ayola
It can be. But, yeah, I would say my biggest friction point has been now I can see where all my money is in each bucket, you know, so it's like, oh, I want to buy xyz. Well, what bucket is it coming out of, Elizabeth? Oh, well, you don't have any more in your fun money bucket. And you can't take it from the travel bucket or the gift bucket or the emergency fund because it ain't an emergency. So I guess you gotta wait till next month.
Sean Pyles
I'd say that friction is kind of the point. Right? You want to have these guardrails so that you aren't overspending in a certain category and you are saving as much as you really want to and need to in these other categories.
Elizabeth Ayola
Yeah, that's it.
Sean Pyles
Okay, well, let's go a little deeper into each of our own sinking funds set up. You really just set this up for yourself quite recently. So can you talk about what your various savings accounts are?
Elizabeth Ayola
So at the moment I have have a travel fund because I'm always traveling at some point during the year. And also I realized I have not been accounting for the childcare that I have to pay for when I travel by myself. And that's usually a scramble, like, oh, I paid for the trip, but now I have to pay extra 5, 6, 700 for the babysitter. And then I'm just pulling it from, I don't know, the air. So I have my travel fund, I have my gift fund, as I just mentioned, because I noticed when I was going through my budget, I'm like, what's a recurring expense that maybe doesn't have to do with bills? And I'm always a kid's birthday, friend's birthday, partner's birthday, whoever. So set up a gift fund. This we established is not exactly a sinking fund, but it still has been nice to set money aside from it. You know, I opened up flexible spending account, so I have money that goes straight from my paycheck into there for summer camp and other holidays where I need childcare. So those right now are my main buckets. I started off small. It's working for me. I have a quote unquote fund money account, but that is just a checking account. And I get actually cashback rewards on that account. So I decided, hey, I should maximize that and actually use it it while I'm spending on my frivolous things. Those are the main ones I have.
Sean Pyles
And your emergency fund is in your high yield savings account as well, right?
Elizabeth Ayola
That's right. That's right. Yeah.
Sean Pyles
Okay, nice.
Elizabeth Ayola
But I've had that for ages, so.
Sean Pyles
Yeah. Did you decide to go with the same bank that you'd been using or did you shop around at all in this Process.
Elizabeth Ayola
Well, as a gal who learns from her co host, we had a discussion about sinking funds not so long ago on the show. And I know you mentioned that you keep all of your sinking funds with the same organization to make it. It easier for you. And I was like, hey, I like easy. I'm going to do that, too. I recently moved my emergency fund to a new high yield savings account. So I just decided to open all my sinking funds with the same provider. So now when I open my app, I can see all of my savings accounts in one place, and it's just so easy.
Sean Pyles
I think that's really smart because these syncing funds can get a little complex when you have, you know, half a dozen savings accounts. But if they're all with the same institution, you just. Just open the app on your phone or log in and then you see them right there in front of you. So it's really not all that complicated to track versus if you did have them across two or three different banks. That could get confusing. And as we all know, the administrative burden of managing money is so cumbersome sometimes that you want to disengage. Like you said earlier, Elizabeth, just knowing your password can be a huge barrier. And it'll make you just want to walk away from the task and say, I'll do that later, and then turn to out. You don't do it later. So try to keep it as simple as you can amid the slight complexity of having multiple accounts.
Elizabeth Ayola
Yeah, well, I know you said that you did this ages ago. Well, I guess I already gave you away, but. Yeah. So your process is what? Let's dive into yours, Sean.
Sean Pyles
Okay. I'm going to pull up my savings account right now because, honestly, it's hard. Accounts. Yes, Plural. It's hard to keep track of how many I have at any given moment, but I haven't changed them in a minute, so. So I'm gonna guess. Actually, I want you to guess how many I have right now.
Elizabeth Ayola
Well, you said 10, and because you're extra, maybe it's 11.
Sean Pyles
Okay. Across all of my checking and savings accounts, it's closer to 10 or 11. But right now with my savings accounts, I have seven.
Elizabeth Ayola
Oh, okay.
Host/Announcer
I have seven.
Sean Pyles
And one of them is my wedding fund that I just haven't closed yet. So you're gonna cross that one. I really have six that I'm using on a regular basis. But then beyond that, yeah, I do have a checking account. I have a. That's my personal checking account. I have a business checking account. I have an old checking account that I've had since high school. So, you know, it gets a little bit closer to that 10ish number. But a lot of them I'm not engaging with on a super regular basis and that's fine.
And how did you do the math
Elizabeth Ayola
deciding how much to put into each account from your paycheck? Because I imagine that is where some people may get a little stressed out.
Sean Pyles
Well, like you. When I first set it up up, I did a bit of a deep dive. I don't think I went as far as you did. Although I love that this could be a moment for people to get way more acquainted with their finances. I just knew to start that I really needed to build up my emergency savings. And right now I'm actually at a place where I have plenty in that account. So I've stopped contributing to it.
Elizabeth Ayola
Oh, that must be great.
Sean Pyles
So I'm just earning interest that's continuing to grow the balance. But you know, at a certain point you don't always need to be adding to your emergency fund. So at that point I did other things like okay, I, like I said before, I'm putting in in between and 3% of my home's value into my house fund. And then some of the other amounts were a little arbitrary. Like I want at least a hundred dollars going into my car fund because I think that over time that will get me to a place where I can cover at least annual repairs. And if gas is really expensive one month, I mean, gas is wildly expensive right now, but if I'm driving a lot a certain month and I have a higher bill than usual, I might dip into that just to help me feel better about myself. It's kind of an intuitive process. And, and I think if I don't have a specific number that I'm saving for, like if I know I have a vacation coming up in six months where I need to save a few thousand dollars for international travel and hotels and all of that, if I don't have a big concrete financial number in mind, then it can be a little bit loosey goosey. I just like to have enough going in there that's covering my day to day expenses.
Elizabeth Ayola
When you just said that you stopped putting money in your emergency fund and now you can put that towards house repairs or you're putting money more money towards house repairs. That's actually the part I'm really looking forward to. So as you know, I'm going to be paying off car this year. And as I was doing the school run this morning in the car. I was thinking, wow, what do I want to put that $500 towards? Which fund can that go? Towards either my emergency fund, my travel fund. But it is really fun, you know, when you're able to tick off a goal and then you have more money to put somewhere else.
Sean Pyles
You know what I did when I paid off my car? I put the amount that I was paying on my car note each month and I decided to allocate that amount. It was like $350 into my car fund.
Oh, that's cool.
That way you're actually saving for your next car and repairs that pop up in the interim.
Elizabeth Ayola
Why would you even talk about a next car? Do you think I want to think about spending thousands of dollars again?
Sean Pyles
Me either. But you know it's going to happen eventually, right? So you might as well get ahead of it.
Elizabeth Ayola
We'll talk about that in another episode. Like what kind of car I want next. But anyway, that's in the far future.
Sean Pyles
Yeah, I want an electric vehicle, but my car is still under 100,000 miles and I want to have it for at least another five years. So I'm in no rush and I'll just keep putting my money into my house savings account and gradually build it up and buy a new car when I need to.
Elizabeth Ayola
But isn't that exciting to have such a long horizon in the sense that five years from now, if you're diligently saving, buying a car won't be so financially stressful because you have this big pot of money?
Sean Pyles
Yeah, but speaking of the time horizon, some people might say, oh, why don't you just invest if you have five years?
Elizabeth Ayola
True.
Sean Pyles
That's kind of on the borderline of when people might say you could write out some ups and downs of the stock market. When it comes to this, I'm just risk averse. So I want to have it liquid to also cover things like car repairs or whatever else might come up in the meantime. So that's why I keep it all in my high yield savings account.
Elizabeth Ayola
I would do the same.
Sean Pyles
I think that that is kind of the long and the short of it, maybe just the long of it, because we went so deep into how we set up our systems here. If anyone out there has set up their own sinking fund system, I'd love to hear how you did it, what you are saving for, what hiccups you ran into, anything that we've just talked about here. I always love to hear what our listeners and viewers are up to. Well, that's all we have for this episode. Remember that we are here to answer your money questions, so send them to us. You can hit us up on the Nerd Hotline by texting us or leaving a voicemail at 901-730-6373. It's 901-730-Nerd. You can also email us@podcasterdval.com or drop us a comment on Spotify or YouTube.
Elizabeth Ayola
Come hang out with us next time we're going to be talking about how to manage your finances if you're going through a big career change. Until then, follow Smart Money on your favorite podcast app. That's Spotify, Apple Podcasts, and also iHeartRadio to automatically download new episodes.
Sean Pyles
Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Elizabeth Ayola
This episode was produced by Tess Viglen. Hilary Georgie help with editing. Eve Krogman edits our audio and also our video. And a big thank you to Nick
Sean Pyles
NerdWallet's editors for their help.
And with that said, until next time, turn to the nerds.
Host/Announcer
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Sean Pyles
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Podcast: NerdWallet's Smart Money
Hosts: Sean Pyles, CFP® & Elizabeth Ayola
Episode: Feel Organized and Less Anxious About Money: The Sinking Fund System Explained
Date: June 8, 2026
This episode explores the concept of sinking funds—a savings strategy that creates designated pots of money for specific financial goals. Sean and Elizabeth break down exactly how to set up multiple targeted savings accounts, share their personal systems, and offer advice to help listeners reduce financial stress, clarify goals, and avoid common pitfalls. Listener questions drive the conversation, making this a tactical, real-world guide for anyone looking to organize their finances and prepare for both planned purchases and life’s surprises.
(04:37–07:30)
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Sean and Elizabeth give listeners a candid, practical walkthrough of sinking funds, peppered with personal anecdotes, actionable steps, and reminders to keep the process both simple and tailored to your life. The approach promises greater peace of mind and improved clarity around financial goals—no more “pool of chaos.” As always, their insights are both nerdy and relatable.