Figure out exactly how much to save each month to hit a known future expense — with interest working for you.
A sinking fund is a savings bucket built up gradually for a specific, predictable expense — a holiday, a car replacement, an annual premium. This calculator solves the future-value equation backwards to give you the exact monthly contribution.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
A dedicated pot you fill in advance for a known future expense.
A sinking fund is a savings bucket built up gradually for a specific, predictable expense — a car replacement, holiday gifts, an insurance premium, a vacation. Instead of being surprised by a big bill, you spread the cost across many months.
Target ÷ months, minus what interest will contribute.
In its simplest form: subtract any starting balance from your target, then divide by months until you need it. The calculator above also factors in interest earned at your high-yield savings rate, so your monthly contribution is a little lower.
Sinking funds are for known expenses; emergency funds are for surprises.
Your emergency fund covers the unknown — a job loss or medical bill. A sinking fund covers the known — a wedding, a new roof in five years, annual property tax. You should have both, and you should not raid one for the other.
High-yield savings or a short-term CD matching your timeline.
For money needed within 1–12 months, a high-yield savings account is ideal — fully liquid, FDIC-insured, currently around 4–5% APY. For 12–36 month goals, a CD or T-bill ladder maturing on schedule can earn a touch more without market risk.
The mechanics in short answers — no jargon, no upsell.
You name the expense (new car, holiday, wedding) and the month you’ll need the money. The bigger the target or the shorter the runway, the larger your monthly contribution.
Any current savings earmarked for this goal counts as a head start. Only the gap between target and current balance has to be funded.
Money sitting in a HYSA grows. The calculator solves the future-value equation backwards to figure out the exact monthly amount you need given your APY.
Set up an automatic transfer for the calculated amount on payday. By the deadline, the fund hits the target on its own.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Car replacement, holidays, annual taxes, insurance premiums — none of them are emergencies, all of them surprise people anyway.
A $3,000 holiday bill becomes a comfortable $250 a month, paid out of the same income you already earn.
When known expenses have their own bucket, the emergency fund stays sacred for actual emergencies.
Parked in a high-yield savings account, your sinking fund quietly compounds — and lowers what you have to contribute each month.
A funded plan beats putting a $1,800 vacation on a 24% APR card and paying it off for the rest of the year.
Watching the bar fill toward a goal you actually care about is more motivating than a vague “save more” resolution.
Everything you might ask before, during, or after using this tool.
A sinking fund covers predictable, non-monthly expenses: car replacement, vacations, holiday gifts, annual insurance premiums, property tax, home maintenance, weddings, big-ticket gadgets. Anything you can see coming on the calendar is a candidate.
It is a savings account — but earmarked for a specific goal with a specific deadline. Many people open one labelled high-yield savings sub-account per fund (“Holidays 2026,” “New Car 2028”) so the money is psychologically and operationally separate from general savings.
As many as you have predictable, lumpy expenses. A common starter set is four: car maintenance, holidays, annual insurance/taxes, and travel. As your life adds expenses — pets, kids, home — you add more buckets.
Yes. Park it in a high-yield savings account (currently around 4–5% APY) so the money compounds while you wait. For longer-dated goals (12+ months) a CD or T-bill maturing on schedule can earn a bit more without market risk.
Generally no — and especially not for goals under three years. Stocks can drop 20–40% in any given year. A sinking fund’s job is to be there on the deadline, not to maximize return. Capital preservation beats yield.
Recalculate. Plug the same target into the calculator with one fewer month remaining (and the new current balance), and the monthly contribution will adjust up. Missing a month is not failure — failing to adjust is.
If the expense is recurring (holidays, annual premiums), reset the deadline to next year and start contributing again. If it was a one-off, reassign the monthly contribution to your next sinking fund or to investing.
They overlap. “Savings goal” is the broader idea — saving toward any target. A “sinking fund” specifically implies a recurring or known-cost expense, often non-discretionary, with a hard deadline.
Other Lazysmirk tools that pair well with this one.
Solve for the monthly contribution that hits any savings goal — house down, wedding, sabbatical, anything.
Size your emergency fund to your real expenses and risk profile, then see exactly how many months until you hit the target.
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The name is borrowed from corporate finance, where companies set aside cash over years to retire a bond on its maturity date. The personal-finance version is much friendlier: you set aside small amounts every month so that when a known expense lands, the money is already there.
The defining feature is that the expense is foreseeable. You know it’s coming — the calendar tells you. A sinking fund is just the discipline of treating that foreseeable expense like a monthly bill, instead of pretending it will solve itself.
Both are savings. The difference is the kind of event they fund. Emergency funds cover surprises — a layoff, a hospital visit, a transmission that gives out without warning. Sinking funds cover knowns — a wedding next May, holiday spending in December, car-insurance renewal each March.
In practice, most people who get into trouble are using one fund for both jobs. The car needs new tires (a known wear-out expense), they pull from the emergency fund, then a real emergency hits a few months later. A sinking fund prevents that.
For sinking funds under twelve months, a high-yield savings account is the right home. Fully liquid, FDIC-insured to $250,000, and currently paying around 4–5% APY at the top online banks. You can pull the money any day, which is what you want when expenses occasionally arrive a month early.
For 12–36 month horizons, a CD or short-term T-bill ladder can earn 25–75 basis points more, with the trade-off that you lock the money up until maturity. The trick is to match the CD’s maturity date to the month you’ll actually spend the fund — “a 12-month CD that comes due in November” for a December holiday fund.
Past 36 months, the calculus shifts. If you genuinely won’t touch the money for three or more years, a conservative bond fund or short-duration bond ladder may earn more. Stocks still aren’t the answer — capital preservation is the job description.
Two short notes worth reading before you trust any number on this page.
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