Sinking Fund Calculator
List the irregular expenses you know are coming. See exactly how much to put in each envelope every month so none of them turns into an emergency.
Your irregular expenses
Prefilled with a fictional example. Edit any row, remove what doesn't apply, or add your own.
Total to set aside each month
$0
Worked example
Fictional household, illustrative numbers. Sam's car insurance renews in 6 months for $720, so that envelope needs $120 a month. Holiday gifts are 3 months away with $200 already saved: ($800 − $200) ÷ 3 = $200 a month. Add car repairs ($62.50), subscriptions ($26.67), and medical ($50), and Sam needs about $459 a month across five sinking funds.
That number is high this quarter because the holidays are close. In January, when the gift envelope resets to a 12-month runway, it drops to $67 a month and the total falls to about $326.
How to read your result
- If the total fits your budget, create one envelope per expense and fund it every payday. Money that sits in an envelope until the bill comes is doing its job.
- If it doesn't fit, fund the soonest due dates first, look for expenses you can push back or shrink, and start smaller envelopes at whatever you can. A partly funded sinking fund still beats putting the bill on a card.
- If one expense dominates, it's often because it's close. Next year, start that envelope 12 months out and the monthly amount shrinks.
- Sinking funds aren't your emergency fund. These costs are predictable. Keep a separate emergency fund for true surprises.
Turn the numbers into envelopes
Sinking funds are where envelope budgeting shines: every envelope keeps its balance month to month, so the money builds up until you need it. Learn the full method in what are sinking funds? and how to budget for annual bills. If irregular bills are why money always runs out before payday, follow the plan to break the paycheck-to-paycheck cycle. Saving for one big goal instead? Use the savings goal calculator.
Put these sinking funds on autopilot
In EnvelopeBudget, each sinking fund is an envelope you can give a savings goal and deadline, with the suggested monthly contribution worked out for you. $4/month after a 34-day free trial, no credit card required.
Frequently asked questions
What is a sinking fund?
A sinking fund is money you set aside a little at a time for an expense you know is coming but don't pay every month, like car registration, holiday gifts, or annual insurance. When the bill arrives, the money is already there.
How do you calculate a sinking fund?
Subtract what you've already saved from the expected cost, then divide by the number of months until it's due. A $600 insurance bill due in 6 months with $120 saved needs ($600 - $120) / 6 = $80 a month.
What's the difference between a sinking fund and an emergency fund?
A sinking fund is for expenses you can predict, even if the exact date or amount varies. An emergency fund is for true surprises, like a job loss. Funding sinking funds keeps predictable costs from draining your emergency fund.
How many sinking funds should I have?
Start with three to five for your biggest irregular costs, often car repairs, annual insurance, holidays and gifts, and medical. Add more once those are steady.