Guides / Saving
Saving for goals with sinking funds
Car registration, holiday gifts, insurance premiums, a new phone. These aren't surprises, they just don't happen monthly. A sinking fund spreads their cost across the year.
The key ideas
- List the irregular costs
- Go through last year's bank and card statements and list every non-monthly expense.
- Divide by months
- Divide each cost by the number of months until it is due. A $600 bill in 10 months needs $60 a month.
- Separate buckets
- Many banks let you create several named savings accounts or "buckets" so each goal has its own balance.
- Bigger goals
- For a home down payment or a car, set a target amount and date, then work out the monthly amount.
- Track progress
- Seeing the balance grow is motivating. Check in monthly.
Questions to ask yourself
- Which expenses caught me off guard last year?
- Which goals matter most if I can't fund them all yet?
Free help
- Use our savings goal calculator
- Work out the monthly amount for any goal on our tools page.
This guide is general education for US households, based on how things typically work. Rules, rates and program details change and vary by lender and state. It is not individual financial, legal or tax advice, and it isn't an offer of credit. Pennies & More isn't paid by any lender or company mentioned here.