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MoneyMath

Sinking Fund Calculator

Save up for a known expense — vacation, car, Christmas, wedding — with a monthly target. YNAB's "every dollar has a job" approach, printable for your budget binder.

🟢 Updated April 2026👤 Reviewed by MoneyMath Editorial⚡ Runs in your browser · inputs never leave your device
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HYSAs typically pay 3.5–5%. Leave 0 if using checking.

Monthly Contribution
$365.45
Saves $115 in interest
Still need to save$4,500
Monthly split (no interest)$375.00
Monthly with HYSA interest$365.45
Estimated interest earned$115
Show the formula
monthly = solve PMT in: PMT × [(1+r)^n − 1]/r + PV × (1+r)^n = FV
where r = APY/12, n = months, PV = current balance, FV = goal

What is a sinking fund?

A sinking fund is money you set aside monthly for a known future expense — not an emergency fund (that's unknowns) and not retirement (that's decades away). Think: Christmas in December, car insurance in June, a roof replacement in 3 years, your daughter's wedding in 2028.

Why a sinking fund beats "saving generally"

When you lump every savings goal into one account, you can't tell if you're on track. A sinking fund assigns each dollar a job. YNAB, zero-based budgeting, and Dave Ramsey's envelope system all use this principle.

How to set one up

  1. Open a high-yield savings account (HYSA) — Ally, Marcus, Wealthfront, etc.
  2. Set up automatic transfer of the monthly amount this calculator gives you.
  3. Label it ("Wedding 2028") or use a bank that supports named "buckets" (Ally, SoFi).

Common sinking fund goals

  • Holiday gifts + travel (~$1,500 typical US household)
  • Annual insurance premiums (auto, home, umbrella)
  • Car replacement ($200–$500/month)
  • Vacation (big trips: $300–$800/month)
  • Property taxes (if not escrowed)
  • HVAC / roof / appliance replacement (5–15 year horizons)

Frequently Asked Questions

How is a sinking fund different from an emergency fund?

Emergency fund = unknown events (job loss, medical). Sinking fund = known events with a date (Christmas, car insurance). Run both in parallel. Emergency fund target is typically 3–6 months of essential expenses; sinking funds have specific target amounts and deadlines.

How many sinking funds should I have?

Most YNAB users run 8–15. Common categories: holidays, vacation, car maintenance, annual insurance, gifts, medical deductible, home maintenance, professional development. Don't over-engineer — start with 3–4 and add as specific needs emerge.

Should sinking fund money be in a HYSA?

Yes for goals under 5 years. The ~4.5% APY typical in 2026 beats checking-account rates (often 0.01%) and keeps money liquid. For longer horizons, a CD ladder or Treasury bills may yield slightly more but reduce flexibility.

What if I fall behind on a sinking fund?

Adjust the goal, the deadline, or the monthly amount — your call. That's the whole point of tracking: you see the gap early, not when the bill arrives.