Sinking funds calculator: how much should you save each month?

For each sinking fund, take the amount you will need, subtract what you already saved, and divide by the number of monthly deposits you can still make before it is due. Add up all funds to get one monthly transfer. Example: $960 of car insurance due in July, starting in January, is six deposits of $160. Costs without a fixed date, like car repairs, get a twelfth of the yearly amount each month.

Updated 28 September 2026 · By the Stillpenny team

Calculate your sinking funds

One fund per line: name, amount needed, due month as YYYY-MM (or leave it empty for a yearly cost without a date), already saved. Deposits are made once a month, from the start month up to the month before the due month.

Worked example: five funds, starting January 2027

"Per month now" rounds up to the cent so the fund is never a few cents short: $900 ÷ 11 = $81.818, saved as $81.82. "Per month in a normal year" is each fund's yearly amount ÷ 12, also rounded up ($139 ÷ 12 = $11.583, saved as $11.59), what the funds cost once each one is refilled right after it is paid: $341.59 in total.

What the example shows:

• Starting late costs more per month. Car insurance needs $160 a month in the first half year but only $80 once you save for it all year. The first year is the expensive one.
• Short deadlines dominate. Amazon Prime is the smallest bill but needs $69.50 a month because only two deposits are left. If that is too much, pay it from this month's budget once and start the fund afterwards.
• The total drops after the first round. From about the second year, the transfer falls from $532.75 to $341.59 a month.

How to use the result

1. Collect the list from last year's bank statements. Look for everything that is not monthly: insurance, registrations, subscriptions, gifts, vet, school costs.
2. Set up one automatic transfer on payday for the total into a separate savings account.
3. Track each fund's balance in a spreadsheet or app, so you know how much of the account belongs to which fund.
4. When a bill comes, pay it from its fund, then restart that fund at the normal-year amount.

Common mistakes

• Counting the due month as a deposit. If the bill is due on July 1, the July deposit comes too late. The calculator counts deposits up to the month before.
• Using last year's price. Insurance and subscriptions often go up. Use the renewal notice, or add a little.
• Treating it as the emergency fund. Sinking funds are for known costs; the emergency fund is for the unknown ones. Keep them apart, or the Christmas money disappears in the first car repair.
• Too many small funds. Group small yearly items into one "Subscriptions and fees" fund.

Follow-up questions

Where should I keep sinking funds? In one separate savings account you can reach within a day or two. Several funds can share one account as long as you track the balance per fund.

What if the monthly total is too high? Push the target date of flexible goals, like a vacation, lower their amount, or pay the closest bill from your normal budget once and start its fund afterwards.

How much for Christmas? We work through the gift list and other holiday costs in the Christmas budget calculator.

The example figures are illustrative; the calculation is shown in full above.