Sinking Fund Calculator
Five funds, their targets and their deadlines
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Planning estimate only. Enter complete, current figures and keep an appropriate buffer for irregular or unexpected expenses.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Fill the funds that apply to you and leave the rest at zero: the car fund for registration, insurance renewal, tires and servicing; the home fund for property tax, insurance and maintenance; holidays and gifts; travel; and one slot for anything else with a date on it.
- 02
Give each fund a target and a deadline in months. The deadline is what turns an amount into a monthly number — a fund with a target and no date is treated as due next month, and the page will tell you so.
- 03
Enter whatever cash you already hold across all of them. It is credited to each fund in proportion to its target, which is how a single savings account actually behaves.
- 04
Add your monthly take-home pay so the total can be read as a share of it, and the interest rate on the account the money sits in.
- 05
Read the total first, not the individual funds. Every fund on its own looks affordable; the number that has to survive twelve monthly budgets is the one at the top.
Formula
For each fund: cash on hand is allocated in proportion to that fund's share of the total target, remaining = target − allocated, and monthly = remaining ÷ months. A fund with a target and no month count is treated as due in one month rather than divided by zero. The headline is the sum of every fund's monthly figure. Interest is estimated per fund on its own timeline: the balance ramps from what is already banked to the target, so the average balance is the midpoint of the two, and interest ≈ average balance × rate × months ÷ 12.
Example
Five funds: a $2,400 car fund needed in twelve months, a $3,600 home fund in twelve, $1,500 of holidays in ten, $2,400 of travel in eight and $1,200 of other in eighteen. That is $200, $300, $150, $300 and $67 a month — $1,017 a month, $12,200 a year, covering $11,100 of costs that are all certain and none of them monthly. Against $6,200 of take-home pay it is 16.4%, committed before the rent is paid, which is the number that never appears anywhere until someone adds the funds up. The nearest deadline is travel, eight months out at $300 a month, so that is the one to fund fully first if the whole $1,017 does not fit. At 4% in a high-yield account the balances earn about $213 along the way.
Definitions
- Sinking fund
- A monthly set-aside for a known future cost. The term comes from bond finance, where an issuer sets money aside over time to retire a debt at maturity rather than facing the whole sum at once.
- Target
- The full amount the fund has to reach by its deadline. Estimate it from last year's actual cost, not from what you hope to spend.
- Deadline
- How many months until the money is needed. It is the divisor that turns a lump into a monthly figure, and a fund without one is a wish.
- Emergency fund
- Cash for the costs you cannot name in advance. A separate pot from every sinking fund, and not a substitute for one.
- Liquidity
- How quickly money can be turned into spendable cash without loss. Sinking funds need it, which rules out anything with a lock-up or a price that moves.
Good to know
The costs that are certain and are not monthly
A household budget that only contains monthly items is describing about eight months of the year accurately and the rest badly. Car registration, an insurance renewal paid annually, tires, a service, property tax, the holiday season, an annual subscription, the veterinary check-up, a school fee, a wedding you have known about for a year — every one of these is certain, dated and absent from a monthly plan, and every one of them arrives looking like an emergency because the budget has no room for it. A sinking fund is the correction: divide the known cost by the months until it is due and put that figure in the budget as an ordinary line, so the lump becomes a subtraction you have already made. The name comes from bond finance, where an issuer sets money aside over the life of a debt so the principal can be retired at maturity without a scramble, and the logic transfers exactly. The test for what belongs here is one sentence: if it has arrived before and it will arrive again, it is not an emergency. Applying that test honestly usually surfaces three or four costs a household has been absorbing as shocks for years.
The failure is never one fund
One sinking fund is trivial arithmetic and nobody needs a calculator for it. The reason this page takes five is that the failure it exists to catch is a plural one. A car fund at $200 a month is obviously sensible. A home fund at $300 is obviously sensible. Holidays at $150 and a trip at $300 are each individually defensible, and the fifth slot for a laptop or a medical bill at $67 hardly registers. Together they are $1,017 a month — 16% of a $6,200 take-home pay, committed before the rent, and a number that appears nowhere in the household's thinking because nobody ever added the funds up. That is the whole diagnostic value of the page: not what one fund costs, but what the stack costs as a share of income. There is no correct figure for that share, but there is a useful test. Add the sinking-fund total to your rent or mortgage and to your minimum debt payments; if the three together clear about 60% of take-home pay, the sinking funds are not the problem — the fixed costs underneath them are, and no amount of rearranging the funds will fix a structure that tight.
Where the money lives
Five funds does not mean five accounts. One high-yield savings account with the funds as named lines in a spreadsheet earns exactly the same interest as five accounts with a fraction of the administration, and many banks now offer buckets or sub-accounts inside a single account, which is the same idea with better bookkeeping. What matters is not the container but the properties: this is money with a date on it, so it has to be liquid and it has to be stable. A certificate of deposit that matures after the bill is due defeats the purpose, and so does a brokerage account that can be down 15% on the morning the registration is payable — the fund exists to remove a shock, and an investment that introduces one has inverted its job. A savings account at 4% adds a couple of hundred dollars a year on a five-figure set of funds, which is not the reason to do it but is free money the funds may as well earn while they wait. Keep the account separate from the everyday one. Money sitting in a checking account with a note beside it in a spreadsheet is spent eventually, and the friction of a transfer is most of what makes a sinking fund work.
Estimating a target, and what to do when the total does not fit
A sinking fund is only as good as the number behind it, and two targets are chronically underestimated. The first is car maintenance on a vehicle past its warranty, where one transmission or one set of brakes plus tires can absorb a whole year of contributions in an afternoon; the honest target there comes from last year's actual repair bills, not from an optimistic view of a car's remaining good behaviour. The second is the holiday season, which people cost as presents and which is actually presents plus travel plus food plus hosting plus the parking. Look at December and January statements from last year rather than guessing, and set the target high — stopping contributions early because the fund filled is a much better problem than arriving in November short. When the total genuinely does not fit the budget, fund the nearest deadline fully and let the distant ones run behind, because a fund that is 60% of the way there on the day the bill lands has failed while one that is 30% funded with two years to run is exactly on track. And if it still does not fit, the honest reading is that one of the targets is a want rather than a certainty. It is usually the travel one, and noticing that is the page working correctly.
Frequently asked questions
What is a sinking fund?
A monthly set-aside for a cost you already know is coming. The test is simple: if it has arrived before and it will arrive again, it is not an emergency and it belongs in a sinking fund. Car registration, an insurance renewal, tires, property tax, the holidays and the annual vet visit are the six that catch most households out.
How is it different from an emergency fund?
A sinking fund covers costs you can name and date; an emergency fund covers the ones you cannot. Keep them separate in both directions — spending the emergency fund on car registration means it was never really an emergency fund, and raiding a sinking fund for an actual emergency leaves you short in the month the bill it was for arrives.
Why run five funds instead of one?
Because the failure this page exists to catch is never one fund. A car fund, a home fund, the holidays and a trip are each individually reasonable, and together they can be a sixth of take-home pay that never appeared in the budget as a single number. Running them separately is what lets you see which one to shrink; running them as one pot is what lets the total hide.
Do I need five separate savings accounts?
No. One high-yield savings account with the funds as named lines in a spreadsheet is enough, and it earns the same interest with a fraction of the administration. Some banks offer buckets or sub-accounts inside one account, which is the same idea with better bookkeeping. Five separate accounts is administration, not discipline.
Where should the money sit?
Somewhere liquid and boring. This is money with a date on it, so a certificate of deposit maturing after the bill is due and a brokerage account that can be down 15% on the day both defeat the purpose. A high-yield savings account at 4% adds a couple of hundred dollars a year on a five-figure set of funds, which is free money the funds may as well earn while they wait.
What if I cannot afford the total?
Fund the nearest deadline first and let the distant ones run behind. A fund that is 60% of the way there on the day the bill arrives has failed; one that is 30% funded with two years to run is exactly on track. If the total is still impossible, the honest reading is that one of the targets is a want rather than a certainty — and travel is usually the one.
How do I estimate a target I have never tracked?
Look at last year rather than guessing. The two most commonly underestimated are car maintenance on a vehicle past its warranty, where one repair can be a year of contributions, and the holiday season, which is travel, food and hosting rather than presents alone. When in doubt, set the target high and stop contributing early rather than the reverse.
Can I use my extra paychecks to fund these?
That is exactly what they are for if you are paid fortnightly. Two months a year bring three paychecks, and that third check in each is the natural source for the annual costs the rest of the year has no room for.