Sinking Funds Calculator
Plan sinking funds for insurance, holidays, car repairs and trips. See how much to save each month and per paycheck for every goal. Free, private, no signup.
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What is a sinking fund?
A sinking fund is money you set aside each month for a cost you already know is coming: the six-month car insurance premium, holiday gifts, a vacation, new tires, the annual software renewal. Instead of one big bill wrecking a month, you pay yourself a small amount every month until the bill arrives. An emergency fund is different: it covers surprises like a job loss. Sinking funds cover expenses you can see coming.
The formula
- Monthly amount per goal = (target amount − already saved) ÷ months until you need it
- Total per month = the sum of every goal's monthly amount
- Per paycheck = total per month × 12 ÷ paychecks per year (26 for biweekly, 24 for twice a month, 52 for weekly, 12 for monthly)
If a goal is already fully funded, it needs $0. If it is due now (0 months), the calculator treats it as due this month and flags it.
Worked example
You have four goals: car insurance of $900 due in 5 months with $150 saved, holiday gifts of $1,000 in 12 months with $0 saved, car repairs of $1,200 over 12 months with $300 saved, and a $2,400 vacation in 8 months with $400 saved.
| Goal | Still needed | Months | Per month |
|---|---|---|---|
| Car insurance | $750 | 5 | $150.00 |
| Holiday gifts | $1,000 | 12 | $83.33 |
| Car repairs | $900 | 12 | $75.00 |
| Vacation | $2,000 | 8 | $250.00 |
The total is $558.33 a month, or $257.69 from each biweekly paycheck. If that is more than your budget allows, push a goal's date back or lower its target, and the calculator shows the new amount instantly.
Common sinking fund categories
- Insurance premiums paid every six or twelve months (car, renters, life)
- Car registration, maintenance, tires and eventually a replacement car
- Home maintenance (a common rule of thumb is 1–2% of the home's value a year), and property taxes if they aren't in escrow
- Holidays, birthdays, weddings and other gifts
- Travel, back-to-school costs, annual memberships and subscriptions
- Medical deductibles, dental work and vet bills
Where to keep sinking funds
Many banks and credit unions let you open several free savings sub-accounts or "buckets" and name each one. A high-yield savings account earns some interest while you wait. Automate the transfer on payday so the money moves before you can spend it. Sinking funds belong in the 20% savings bucket of the 50/30/20 budget.
FAQ
How are sinking funds different from an emergency fund?
An emergency fund is for unpredictable events like a job loss or a sudden medical bill. Sinking funds are for expenses you know are coming, even if they're irregular. Keep them separate so a planned expense never drains your emergency cushion.
How many sinking funds should I have?
Start with the two or three irregular bills that have hurt you most in the past, usually insurance, car costs and holidays. Add more once the habit sticks.
Should I count interest on the savings?
At typical savings rates over a few months, interest is small, so the calculator leaves it out. That keeps the estimate conservative.
What if I can't afford the total?
Prioritize the must-pay bills (insurance, taxes) and stretch or shrink the nice-to-haves. Even partial funding means a smaller hit when the bill arrives.