Sinking funds refer to a type of savings account where individuals deposit money on a regular basis to prepare for a future expenditure, such as buying a car or paying for a mortgage. Among the synonyms used to describe sinking funds include reserve funds, contingency funds, emergency funds, budget funds, and sinking fund assets. All these terms refer to the monetary pool that one sets aside regularly to cater for a future financial obligation, with the aim of avoiding the financial strain of paying large lump sums at once. Regardless of the preferred term, sinking funds are an essential financial strategy that helps individuals achieve their goals and avoid debt.