Sinking Fund Calculator: How Much to Save Each Month for Yearly Bills

Sinking Fund Calculator

Car insurance, the summer holiday, holiday gifts, the annual software subscription. None of these is a surprise, yet they still blow up budgets, because they arrive all at once in one month. A sinking fund solves that: you set aside a slice every month, so the money is waiting when the bill comes.

Add your own bills below. Change the names, amounts and due months, or add more.

How to read the two numbers

Set aside every month is the steady amount: the yearly total divided by twelve. Once your sinking funds are running, this is all you need to budget for these bills. It's the same every month, which makes it easy to plan.

If you start today with nothing saved is the catch-up amount. A bill due in three months needs a third of its cost each month until then, not a twelfth. That figure is higher at first, then drops to the steady amount once each bill has been paid and you're saving for the next one a full year ahead.

An example

Say car insurance of 1,200 is due in March, and it's now December:

• The steady amount is 1,200 ÷ 12 = 100 a month.
• With three months to go and nothing saved, you need 1,200 ÷ 3 = 400 a month until March.
• After March, you're back to 100 a month for next year's bill.

Can't afford the catch-up amount?

That's common the first time. Three ways to bridge the gap:

1. Start with the nearest bills. Fund whatever is due soonest first, and add the others as they come into range.
2. Use a one-off. A tax refund or bonus can fund the catch-up in one go. See what to do with your tax refund.
3. Trim the bill itself. Re-quote the insurance, downgrade the subscription, or set a firmer holiday budget.

Making it automatic

Sinking funds work best as envelopes in your budget, one per bill, refilled every month like groceries. In FamilyJar, a yearly category does this for you: enter the year's figure once, add the bills it covers with the month each falls due, and the app works out the monthly amount and shows which bills fall due this month. Rolling categories never reset, for longer goals like a new car.

For the full method, with category ideas and common mistakes, read our guide to sinking funds for families and envelope budgeting with irregular expenses.