Save a fixed amount each month and be ready when the bill lands.
A sinking fund sets aside a little every month for a known future expense: a car repair, insurance premium, holiday travel, or a new roof. Enter what you need and when, and see the exact monthly deposit that gets you there.
Your fund
We solve for the fixed monthly deposit that reaches your target by the month you set, including any interest your savings earn.
What this means
Your balance climbing toward the target
Milestones
Month by month
| Month | Contributed | Interest earned | Balance | Of target |
|---|
Sinking funds, explained
What a sinking fund is and how to use it
A sinking fund is money you set aside on purpose, a little at a time, for a specific expense you know is coming. Car registration, insurance premiums, a new laptop, holiday gifts, a roof replacement: none of these are true emergencies because you can see them coming, yet they wreck a budget when you pay the whole amount at once. The fix is simple. You decide the target amount, pick the date you need it, and divide the gap into equal monthly deposits.
This calculator does that division for you and adds one thing a napkin cannot: interest. If your fund sits in a high-yield savings account, the balance grows on its own while you contribute, so the required monthly deposit is slightly smaller than the target divided by the months. Enter your numbers and the headline figure is the exact deposit to automate.
How the monthly contribution is calculated
The math treats your fund like a savings account with a fixed monthly deposit. Each month the balance earns a small amount of interest and then your deposit is added. To hit a known target on a known date, we solve for the deposit that makes the final balance equal the target.
With a monthly rate r (your annual return divided by 12) and n months, the required deposit is (Target minus Current times (1 plus r) to the power n) divided by (((1 plus r) to the power n minus 1) divided by r). When the rate is zero, it simplifies to (Target minus Current) divided by n. Any amount you have already saved keeps growing too, which is why a larger current balance lowers the monthly figure by more than its face value.
Common questions
What is a sinking fund?
A sinking fund is savings you build up gradually for a specific planned expense, such as a car repair, insurance bill, or vacation. You set aside a fixed amount each month so the full cost is ready by the date you need it.
How is the monthly contribution calculated?
We take your target amount, subtract what your current savings will grow into by the target date, and divide the remainder by a factor that accounts for the interest each future deposit earns. If you set the return to zero, it is simply the remaining amount divided by the number of months.
How is a sinking fund different from an emergency fund?
A sinking fund is for a known, expected expense with a target amount and date. An emergency fund is a general cushion for surprises like a job loss or medical bill. Build the emergency fund first, keeping 3 to 6 months of essential expenses, then use sinking funds for planned costs.
Where should I keep my sinking fund money?
Keep it in a high-yield savings account or money market account that is FDIC-insured, separate from your checking so you are not tempted to spend it. The interest it earns lowers how much you need to deposit each month.
What if I already have some money saved?
Enter it in the current saved field. That balance keeps earning interest until the target date, so it reduces your required monthly deposit by more than its face value, especially over a longer timeline.
Can I use this for multiple goals at once?
Yes, but calculate each goal separately and add the monthly deposits together to see your total commitment. Keeping each fund in its own labeled bucket stops one goal from quietly draining another.
Estimates only. Savings rates change over time and are not guaranteed. Interest is assumed to compound monthly at the rate you enter; your bank may compound daily. Round your monthly deposit up to leave a small cushion.