The Vault with Financielle - UNLOCKED: Ready for the Year Ahead – The Most Underrated Money Habit

Episode Date: December 22, 2025

Send us a textUNLOCKED Week 3: Ready for the Year AheadLast week we touched lightly on sinking funds. This week, we’re going all in because your year will fail without them (sorry, not sorry).In a world of credit and BNPL, saving up for the things you want is one of the most underrated money habits there is. Sinking funds are about delayed gratification, being prepared, and having money waiting for future you.In this episode, Laura covers:Why sinking funds are her favourite under-the-radar money habitThe “unexpected” costs that show up every single year (MOTs, birthdays, holidays, Christmas…)Why sinking funds are elite money behaviourHow they remove guilt, overspending and last-minute stressWhy people resist them (yes, they can feel boring… and revealing)How sinking funds create emotional stability, not just financial stabilityHow to set them up using tools like Starling, Monzo and RevolutWhy the Financielle community pushed for the sinking fund tracker and how to use itIf you want to change your spending habits in 2026, you need sinking funds. Save now. Buy later. Feel calmer all year long.If you’re enjoying the Unlocked series, subscribe to The Vault, leave us a review, and tell us how you’re resetting and rebuilding in the comments or the Financielle App community.#moneystory #sinkingfunds #Financielle #TheVaultUnlocked #personalfinanceforwomenConnect with our Partner🫶 Protect yourself and loved ones with our friends at Lifesearch** The above is a tracked link, which tells our partner we sent you and may in future result in a payment or benefit to our site.The Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

Welcome to the Vault Unlocked episode three with me, Laura, from Fran and Shell. We are so excited to be three episodes in already, oh my gosh, of the Unlocked series and this like mini series that we're doing to really get you ready for next year. And also, okay, I want to start out again, but then that's it. I'm not doing it again. Welcome to the Vault Unlocked. It is me, Laura, here with you from Fan and Shell. and we're on three already so if you have missed the first two what we've essentially done is put together a five part prep yourself for the new year podcast set the first week we did it was reflection so we're looking back on our 2025 our previous month where whenever you listen to

this having a period reflection on how your money management went how you felt about your money did you hit your money goals if you didn't why if you did why that big big reflection because you just have to start there and look a little bit back before you go forward and then where do we go to next in episode two it was reset and rebuild and it came back to basics to be honest with the budget because the budget you know as we shared is is the secret to everything because that's where you point your money towards the goals that you want to hit so your weekly budget your monthly budget, however you manage your money, having an appropriate budget that you can stick to, not too harsh, not too weak, very focused is crucial. It, like, determines the pace

at which you can hit your goals. It can help preserve your mental well-being, especially of money and stresses over money is very, you know, apparent for you. So we did go back to basics, But I for one loved it because I think it was my like mini little check-in before Carl and I, you know, catch up and on our like looking forwards and setting our goals and stuff, which we'll come on to. So, yeah, we've done reset and rebuild. So this one is another mini back to basics. Okay. This is Sinking Funds Saved Lives chat.

And I don't want you to think, oh, I know, I know all about this. I don't need to listen to this one. or, oh, you want to do something a bit juicier, sometimes we have to go back to basics and we have to focus on the things, not just that practically get us towards our goal, but that are game changing. There's not loads of moments on your money journey that can be these aha moments. There's not that many. But sinking funds is probably the biggest game changer for our community. it's the biggest light bulb it's the it's the thing that something switches in your head it's it really is like that it's like so we just discovered a new way of a way of working a way

of living and we're going to get under under the skin of it and it's super important because it lays the foundations for winning with wealth later it really really does and and for those people that think a sinking fund is just what I always say is, but it's just a pot of money that you use for a planned expense, a future planned expense, you are missing a trick because that is practically what it is, but there's so much more magic underneath. So that is, that's what we're going to go into. We're going to talk about the fact that your year will fail without sinking funds. And I do not apologize for saying that it will because you you will default to using debt you'll default to spending more than you know you'd plan to and you will impact your mental well-being and then

you'll negatively spiral your year ironically might not hinge on your income and your spending but it might actually hinge or succeed or fail on the basis of sinking funds so singing funds are my literally my favorite money habit that goes under the radar in a world of credit and buying our pay later saving up for things that you want is one of the most underrated habits we all know we know we should save up for things of course we do you know it's the grandparents test it was that's what that's what you did if you wanted something you saved up for for it and when you had enough money you could buy it and oh my gosh as times changed like if you think about the credit industry it has evolved from loans to mortgages would be full loans but mortgages

and loads to credit cards so oh now I've just got this like line of credit I have a little magic card that just tap oh there we go bought something you want it you can have it like it not a problem like pretend absolute pretend money and it's all in your card which now can just go on your phone and you do your double click it's um literally at your fingertips and then we have buying our pay later that came on the scene and at first it was on bigger items i don't know if you remember maybe about four or five years ago it could even been longer i've got an awful awful concept of time. It was on things like Dyson hair dryers or GHD straighteners, those big Christmas gifts that, you know, at four, 500 pounds, you'd be like, ooh, that feels a bit expensive.

But then when it was split into three or sometimes six at checkout, it was like, oh, actually, I can afford that now. I can afford 70 a month. I can afford 100 a month. I can afford. A I can afford 30 a month. And it absolutely flew. It just took off because it suddenly made things more attainable. Now, in the nicest way, I want to believe that there's a place of buying now, pay later, for people that don't have a lot because it's a very privileged position to sit here and do a podcast on sinking funds and sit here and do a podcast on saving up in advance for things,

I am well aware that that is not the reality for many. There's a great number of people who do live on the poverty line, who life hits them, and you could at least use a buying out pay later product to help pay for a new TV for the family at Christmas or the fridge is broke and you don't have access to credit, you don't have a good credit score or you just don't want to take out of loan for it, but you can divide it up into three or six.

The reality is the majority of people are not in that situation where needs must. They're buying things you can't afford and it makes it more palatable and easier to pay for it with credit. And so it absolutely was a game changer. I think for entitlement, I think for thinking, of course I'll just get it. There's so, there's much less of a hesitation. There's much less of a, hmm, can I afford this? Like, is this a right price?

Don't want to hunt around for a deal even. If you are in the, I bet most people don't know the gross price, like the full price, the total price of some of the goods they buy him. I suspect they are cracking on with the monthly. payment that is shown to them and go, I can afford that, that's fine. That's not bad. That's a great deal. And so in a world of buying our pay later's and pushing it down the line and sorting out later, a sinking fund is quite literally save now, buy later. In some respects, it's a delay gratification because if it's, if you come across something that

you would like. Let's say it's not a need, but it's a want. I would like. Let's pick something. Let's say you wanted some curling tongs, right? You like, oh, Laura, I like, I like your hair, like how it waves. And I was like, I would say to you, well, my friend Nancy did my hair with it, with a, with a PhD curling wand. But she uses it. It's actually a curling tongue, but she uses it one. She wraps your hair around it. And I used hers a few times. I was like, I need to get one in my life and let's imagine that I can't remember how much they are but let's say it's like 200 pounds let's imagine that wasn't in my budget but I would like one so I actually got it for Christmas so this is a bad example but imagine me going I would like that thing um but in my budget

there's not a 200 amount there just to spend without it really impacting you know where would it come from actually like I've got a hair and beauty budget that's It's not, tools were not in mind when I set that fund up, which I'll come on to. It's not fun, fun for me, less fun for the rest of the family. It's a big hit. So what I would do is go right, okay, I can't, this isn't planned for, but I would like it. And so I will put aside £100 next two budgets. In a couple of months, I'll buy it.

How often does that happen in today's world? like genuinely, how often does it happen? I don't think it does. This delayed gratification where we save up in advance for something really is, it's just unheard of and it's a shame. But therefore, it's a superpower and a flex if you're the one doing it. So sinking funds, they're just going to be, if you don't do that, if you do them, you are going to be nodding away to this and going, yeah, I love my singing funds and I'm so

organized. I don't know what I did before them. But if you don't do them, I really want you to just dial into these next couple of points that I'm going to make. And then we're going to go through the what to think about and the how tos. I'm going to just go through mine as well and I'll literally walk through them. So sinking funds are elite money behavior. Elite money behavior. The mental clarity of having money waiting for future you is just game changing and it's the behaviour of someone in control, someone who wants to look at his or her future self, someone who has got their own back. They are elite money behaviour. They can also really reduce guilt around overspending. So we see this a lot. Lydia in our team will be one of the first to

to share this and admit this that she does struggle with spending she will agonise over a purchase especially an expensive purchase you know she she will have to really really sit and think about it and what happens is for people that struggle with spending all that don't struggle but they just constantly feel guilty is they feel it's like derailed some kind of progress it feels they've like stolen from future you because they've god forbid had something for themselves so building up a pot of money for something especially that you want rather than need is such a flex and it's a real treat to you because what you're doing is you're providing a saving up in advance and providing with something that you want but you're not derailing goals because the the budget is the budget the budget is a plan and at

the end there's an excess and the excess is going towards your goals and you know only if the excess is super tight or a zero, do you then go? I can't have that thing. I can't build up a sinking fund for it because it's too tight. In all other scenarios, you have got an excess at the end and you've put money towards the thing you want. So you've still been able to put money towards your goals. You are still on track. You haven't derailed the progress. And so they can really help remove guilt from overspending, especially on ourselves when, if you're someone that struggles with that people resist them for a few reasons they they feel boring like again it does feel a bit traditional to save up in advance and you don't get that immediate gratification and that dopamine

hit on the purchase you do get a dopamine hit when you do buy the thing but people feel i want it now i want the thing now so i don't know you know they want to be varucos salt about it they want it immediately and so people think it's just boring to save up in advance and not get that buzz and not have the thing that they want now. Like it's, it's very, very common that that's what means why people don't do it. They, singing funds also require forward planning. It requires you to take a step back and to look up and to look ahead. And again, lots of us are not comfortable doing that.

We're much better in the moment. We feel overwhelmed looking to the future. There's a lot of uncertainty, sorry, they're unsure about what's ahead. And so they'd much prefer to live. in the here and now and not think further down the line. And also there's a real warning here that we call it financial poor. You're going to feel financial poor when you first start doing them and then going forwards, especially even last week we talked about using a Challenger Bank to organise

your sinking funds, which we're going to go into. But when you have all your sinking funds and your flexible money into separate parts, literally in your account, but like divided up, your main. main account can feel low. It can feel empty. It can feel like you've no money and for the first few months that you budget it is so hard to open your banks, you know, money when you've just been paid because you've moved all the money and you've organised it all, but you feel like you've not got a lot. And also the sinking funds are low because you're just starting. So you kind of, you feel like you're not winning either way. You've not got loads of savings sat there necessarily. You've not

got loads of money in your main bank account and you've not got big sinking funds yet because you only just starting and a lot of people struggle with that and what I say is this is financial poor do not worry this is you starting the process getting that flywheel going building strong foundations and it's sometimes helpful to total up your sinking funds sometimes and look at how big eventually they do get because that's all yours you know it's it's not savings necessarily it is savings but it's not savings for savings sake, all this money has a job. But it can feel like you've not got a lot for a while.

And that really can be frustrating for people. And by the way, that doesn't go away because financial poor is like out of state, out of sight, out of mind is really, really helpful. And so that's a strategy and a check, a thing that we use, a tactic going forward throughout the playbook. so yeah warning that you can feel like you're never going to get there and you've moved money into it into these pots and you can't use it because they've got a job and another thing of

that is lots of people are so tempted to not build up sinking funds and pay off their debt quite quickly and whilst it's tempting you kind of get yourself in a bit of a circular issue because you pay off the debt but then a big purchase comes up and you don't use your emergency fund and so then you think oh just use some credit and then use your credit again and you put it back on the credit card and it's actually it's better to have lean sinking funds especially when you first start and you're in survive and you're building up that mini emergency fund and you're paying off your debt and then later they become bougie that they really can become bigger and bigger, but try and get that balance, you know, have lean, lean, sinking funds,

absolute necessities. And then as you graduate through the different playbook stages, then see if we can like fatten them up a little bit. And these sinking funds do genuinely create emotional stability. It's not just financial stability. It is a superpower to, in that moment, a quite reasonable and expected expense appears. And you, go right. I've got money for it. Let me just let me just go to my sinking fund. It's not just about numbers that you're able to settle that bill. It's a much bigger thing around emotional stability, confidence in yourself. Yeah, and like you just looked after your future self, like I said earlier. So I'm going to have a little run through some of mine just to give you

some context as to the kind of, if you've not done one before, if you want to compare with mine, I use the financial app budget tool to organize my sinking funds, where I then do use a challenger bank. You can use Starling, Monzo, Revolut, all of those banks that have pots. I do find it easier to then divide my money up. And then when I need to use money, I'm at the shop, I'm about to pay the bill online, whatever the thing is. I move money from the pot into the main bit of the account and pay for things that way.

And I also, so on payday, I'll move all the different. monthly amounts for the sinking funds into those pots at the main bit again I become financial poor and typically I would leave a buffer of about £100 in the main account all the time just because if your money's in pots sometimes like it could reject as an automated card purchase that you missed then you don't want to get there and also what you can do with some of these bank accounts is have a month we've got one of the pots is called monthly bills the month of bills account you can make your direct debits come out of so that can be helpful as well because you you're not having direct debit you don't have that chunky amount in the

main bit the chunky amount is in a pot and again it's outside out of mind so I like doing that so sinking funds sinking funds are made up of different essentials and different ones and so as I said depending on where you're at in your budget we like lean ones sometimes and we have boozy ones later and manor all mixed in so I'll just go through some so for example I have ring insurance because my engagement ring is annoying really um sorry Carl but it's a little too expensive to go on the house insurance that we have it's not always a case in house insurance um but it's so it needs its own insurance so it's about 250 a year to insure this ring um and so i insure it. So it's like 25 a month goes into the ring insurance pot and then that's ready to

be paid annually. Same with home insurance. We put about 30 pounds a month into a space and then every January our home insurance is due. Now the thing with insurance is not a lot of people appreciate that you are effectively entering a credit agreement when you pay monthly. It really infuriates me. It's something that I'd love to help change because it definitely penalises. I don't understand why you have to pay for it annually. And if you want to pay it monthly, then you're effectively getting a credit agreement for the year amount. And that's why it's more expensive. So not only are you taking on credit, it's costing you more to do it because that's the margin for the finance company or the insurance company if they do provide the finance. So that's

why I personally, and lots of people save up in advance for insurance, then pay for it when it comes up for renewal. So the next thing on my singing funds, I've got home and garden. And the home and garden we put about £100 a month into the home and garden but this could be for anything like our gardener that comes and we have a cleaner as well that comes once a fortnight and helps us keep on top of the house those are bougie elements of our sinking fund I do appreciate that we've not always had those in fact much more recent years and we've had them but also things like when bulbs go or the other week my daughter's like the curtain pull came down in a bedroom and car went to the DIY store and got the bits and bobs that's needed to kind of fix that these things

do add up. It could be blaine, drain unblocking products. Little things here and there that you just need, you might need a quick electrician to do a job, or you might want a nice light for the front door. And where does that money come from when you want it? Whereas if there's a pot of money there waiting for you, you know, one month you may not use it at all. The next month you may clean it all out, but it's a godsend. TV license we save up in advance for. Travel is a big one, estimating how much you are going to need in a typical year for travel. Like we put quite a lot aside for travel because we're family five and we are looking enough to go on multiple trips, but we always save up in advance for a trip.

We never go on a trip that we don't have money for. And it takes a long time to build up like those are large amounts, especially if you're used to paying off holidays. Sometimes taking a break for a year and having a really, really lean budget, especially when it comes to big things like travel can help. But travel is one. we have car maintenance. This is a big one. Okay, so we have MLTs every year. We have services. We will need new tires. We want to be road safe, obviously, but we also want to make sure we're well maintaining,

our cars are being well maintained. And we don't buy super new cars. We don't have super new cars. So it's when, not if we will need to use that fund. And so I can't tell you how freeing is to be able to just dip into that fund, use it, and then move on and not kind of stress about it. At Christmas, like, I was used this example. One Christmas, we had like six tires across the eight tires on our cars that all needed replacing. And it was just not a big deal, whereas that would have really mentally impacted me if it had impacted the Christmas fund that I'd saved up or the salary for that month,

it would have really, really been tough. And so that's what that kind of car maintenance fund, especially if you have an older car like it's an essential you just need and we have a dentist sinking fund that's a super grown-up singing fund we have gifts gifts is because one month you may have a lot of birthdays the next month you might not have any and so having a nice pot of money for when you need to buy a gift for someone whether it's a gift for a teacher or whether it's a friend or whether it's a family member or you just want to kind of like gift someone something the money sat there and you don't feel guilty about spending it but also you can kind of estimate how it's you're going to spend and make sure that

you've got enough in it. We have a babysitting sinking fund. This is because once in a while obviously we do want to have some time on our own and get out and about and get some nice food. And again, if we didn't have that in the budget, how would we pay for it? We probably wouldn't go. And so having the eating out fund and having the babysitting fun brings that together. Hair and beauty, you know, especially as we're getting older, I need more hair dye because I don't want the grades to come through. And so I've got mine, the girls, I've got a super long hair now they're going more often. The boy's got long hair as well and he won't have his hair cut,

so we're not paying for him yet. But Carl and I, look, you know, we've got skincare that we pay for and I have my nails done. I didn't used to have my nails done. I haven't done more recently. It's a bit easier to manage because of TV and stuff. And I do like having them painted, but I wasn't keeping on top of it.

And it was just causing me a lot of stress to find time to do them. So again, it's a bit of a boogey-sinking fund for me, but that has grown. All that is in a big fat pot that I add to every month. and I don't feel guilty because my goals at the other end are still being hit. And so these sinking funds, you know, sometimes people do really big sinking funds. And these are things like, oh, we're renovating or I'm going to get a new bathroom. I'm going to redecorate my child's bedroom.

I'm going to get a new car, you know, car sinking fund, a new to me car sinking fund. There's lots of different things that you can do that you need to save up for. And, you know, you can, having the money ahead of time, as I said, is elite money management. and it's going to teach you so many more things for hitting these big goals down the line. So practically, there's two main ways to do it. I've nodded to it already, but the financial apps and banks that have pots, game-changing, is the method that I use. And it's disappointing because sometimes you don't always get the best interest rate

and sometimes there's quite a big chunk of money in there. But at the same time, it's a, I weigh it up and I'm comfortable with where it at. I do need to investigate because with sometimes the starlings and monzos, you can nominate a pot to be a savings pot and for example our holiday fund might be better in there we'll see might have a look at that but then the other way you could do it is put it in one bank account and in the financial app there is a sinking funds tracker and the sinking funds tracker has the total at the top but you can divide it all up into smaller amounts and that we have had so that was the biggest requested thing when we built it last year and it's been game changing

for people because they don't want to have to move banks and they don't have to open a new bank account but they felt like they had this pot of money and they didn't know what was meant for what category and so the sinking funds tracker on the out which is the free free tracker it's just on the is on trackers at the bottom and you just where your goals are your debts are and your sinking funds you can divide all your sinking funds up into their individual categories and you've got a nice total and that total should balance with the bank account that you keep sinking funds in and you know really you do you like whatever works for you however you navigate it But just try them.

If you're not doing them, try them. If you are doing them, make sure you're a bit slick with them. Are there any others you could include? Are there anything more savvy that you can do? Can you make interest on it? As I've just debated here, this can grow into a large amount of money. It's not something that would typically add to our net worth. With that, I just kind of say with your net worth calculation,

you'd just be consistent. So include it if you want to. I don't, because it's a moving amount all the time, and it looks like your net worth can go up and down if you've just paid for Christmas or you've just paid for a holiday. and just paid for the car insurance renewal was really in my head that money spent if it's gone to sinking funds it's not mine so I don't include it in my net worth there's no rules just as long as you're consistent um but they really if you want to change

your spending habits in 2026 if you want to get ahead if you want to feel better if you want to feel in control and feel like you can smash your money goals then sinking funds are for you and so spread the word encourage people to use them make sure you use the budgeting tool on the app because in that budgeting tool you can allocate your monthly singing funds amount and just have a really good slick payday routine which is okay paid okay done my bud oh well maybe the way wrong way around but you do your budget you get paid you divide up all the money you move it where it needs to go uh to be and then you crack on and you don't have to overthink it because it's all in place so um if you've got any weird and wonderful ones like DM us messages let us know

I was going to use some examples but I feel like going through mine was the easiest way of just being authentic with how we manage sinking funds, but I've seen some weird and wonderful ones. I've seen, um, uh, like a overspending one, like a shit I'm allowed to buy or people have a January sinking fund sometimes because it can be such a miserable month for some people and having the something to look forward to a pot of money that's permission to spend is, is great. And you future self in January may well thank you for that. Um, whatever, whatever suits you whatever suits your budget but don't don't avoid it get using it because they really are game changing um as ever this is just a chat around life of money we're not giving financial advice

and i hope you'll join me next week for week four of the unlocked series where we're going to help you smash your goals in 26 and beyond thank you