Sinking Fund Calculator
Work out how much to set aside each month to reach a planned expense on time — a sinking fund for holidays, car repairs or insurance.
How it works
Monthly contribution = (goal − already saved) ÷ months until needed
A sinking fund turns a big, lumpy future expense into small, predictable monthly savings so the cost never lands as a nasty surprise. Subtract what you have already put aside from the total you will need, then divide by the number of months until the deadline. Sinking funds are what separate a resilient budget from a fragile one: known-but-irregular costs like car registration, holidays, annual insurance and replacing an aging appliance are planned for, not charged to a credit card in a panic.
Worked example
You need $3,000 for a trip in 10 months and already have $500 set aside. The remaining $2,500 divided over 10 months is $250 a month — roughly $58 a week — and the fund reaches $3,000 right on schedule.
Frequently asked questions
What is a sinking fund?
It is money you save gradually toward a specific known future expense — a vacation, holiday gifts, car maintenance, insurance premiums — so you can pay cash when the bill arrives instead of borrowing. The term comes from corporate finance, where companies set aside money to retire a bond or debt over time.
How is a sinking fund different from an emergency fund?
A sinking fund is for expected, planned costs with a known date and amount; an emergency fund is for the unexpected — a job loss or urgent repair. Keeping them separate means a planned expense never drains the safety net you hold for true emergencies.
Where should I keep sinking-fund money?
A high-yield savings account is a common choice: the money stays safe and liquid for the deadline while earning some interest. Avoid investing money you will need within a year or two, since a market dip could leave you short right when the bill is due.
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Educational estimate, not financial advice.