Big expenses ruining your budget? Try a sinking fund
By Kurt Woock, NerdWallet
The holiday shopping season happens every year. So why can it still be so tough to be financially prepared? Thirty-one percent of 2024 holiday shoppers who used credit cards to buy gifts still hadn’t paid off the balances nearly one year later, according to NerdWallet’s 2025 Holiday Spending Report.
One reason behind the budgeting-spending disconnect could be the assumption that planning ahead looks the same for all expenses. It doesn’t. For large, predictable expenses, like holiday expenses, one solution is a sinking fund — money saved and earmarked for specific purchases.
The three types of expenses
Thinking about how frequent and predictable an expense is can help you decide how to plan for it.
1. Groceries, rent and other recurring expenses are both frequent and predictable. Typically, you’d pay for these with your regular income using your checking account (or with a credit card that you pay off each month). These expenses make up most of your budget, and are relatively easy to account for.

