EXPENDR
EXPENDR › Sinking fund calculator
Free tool

How much should I set aside for big bills?

Some bills arrive once or twice a year and are big enough to wreck the month they land in. Add each one and how many months away it is, and this works out one monthly amount — and a weekly one — that has every bill ready on its due date.

Set aside each month
—
so every bill is ready on time
Per week
—
Once you are caught up
—
Bills in the next year
—
Due first
—
School fees—
Insurance—
Flights home or a holiday—
Gifts and celebrations—
Anything else yearly—
Everything is worked out inside your browser. Nothing is sent anywhere, and nothing is stored on a server.
The method

How do you work out a sinking fund?

Divide each big bill by the number of months until it is due, then add the results together. That total is what to set aside every month, and the calculator does the same sum and shows the weekly version too.

per bill = bill ÷ months until it is due
each month = the per-bill amounts added together
per week = each month × 12 ÷ 52
caught up = one year of these bills ÷ 12

Nothing here is a guess about the future. These are bills you already know about — the next school term, the insurance renewal, the flight home — so the only real input is the date, and the sum simply stops a known bill from arriving as a surprise.

What is a sinking fund?

A sinking fund is money put aside in small, regular amounts for a large bill you know is coming, so the bill is paid from that pot instead of from the month it lands in. The name comes from company finance, where a business sets money aside to repay a debt on a fixed date; in a household it does the same job for school fees, insurance or a holiday.

Why does the first year cost more?

A bill twelve months away needs a twelfth of its cost each month. A bill three months away needs a third. When you start a sinking fund, some bills are always close, so the first year asks for more than the steady rate — that is the catch-up. Once each bill has been paid from the pot once, the next one is a full year away, and a twelfth of the year's total keeps everything covered. The calculator shows both numbers, so you can see when the pressure eases.

Which bills belong in a sinking fund?

Anything that is known, large and not monthly. The usual ones:

  • School: fees by term or year, uniforms, books and trips.
  • Home and car: insurance renewals, registration and servicing, and rent paid in a few large cheques, as is common in the UAE.
  • Travel: flights home, the summer holiday, visa and document renewals.
  • Celebrations: Eid, Christmas, Diwali, birthdays and weddings. The dates never move, so they should never surprise.
  • Yearly subscriptions: memberships, software and anything else billed once a year.

Monthly bills do not belong here; they come off the top of every month's budget. Neither do emergencies, which have no date and no amount.

Is a sinking fund the same as an emergency fund?

No. An emergency fund is for costs you cannot predict — a job loss, a medical bill, a broken car — and it stays untouched until one happens. A sinking fund is for costs you can predict, and it is meant to be emptied on schedule. Keeping the two apart stops the school fees quietly eating the emergency money.

Where should the money sit?

Somewhere separate from the account you spend from, so it never looks like spare cash. A savings account or a savings pot in your banking app both work. One pot for every bill is fine, as long as you know how much of it belongs to each — otherwise a flight booked early can spend the insurance money without anyone noticing.

Sinking funds in a shared household

When two people share the bills, the hard part is not the maths but the visibility. If only one of you knows the pot holds the money for next term, the other sees a healthy balance and plans around it. A sinking fund works best when everyone in the household can see what it is for and how far along it is.

The app

Every big bill, saved for together

In EXPENDR Plus, each big bill can be a family savings goal with its own monthly set-aside and an estimate of the months left. Goals stay in the order you need them, and everyone in the household sees the same progress. Weekly budgets, budget alerts and the weekly recap are free; Plus is one payment for the whole household, not a subscription.

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Questions

Sinking funds, answered

What is a sinking fund?
Money set aside in small, regular amounts for a large bill you already know is coming, such as school fees, an insurance renewal or a flight home. When the bill arrives it is paid from the fund, so it does not wreck that month’s budget.
How much should I put in a sinking fund each month?
Divide each bill by the number of months until it is due and add the results. A 6,000 bill due in 10 months and a 2,400 bill due in 6 months need 600 and 400, so 1,000 a month. Once every bill has been paid from the fund once, a twelfth of the year’s total keeps it going.
Is a sinking fund the same as an emergency fund?
No. A sinking fund saves for known bills with a date and an amount, and it is meant to be spent on schedule. An emergency fund covers costs you cannot predict and stays untouched until one happens. Keep them separate so one cannot quietly drain the other.
Does every bill need its own sinking fund?
It does not need its own account. One savings pot is enough, as long as you track how much of it belongs to each bill. What matters is that nobody spends the school-fees money on a holiday because the balance looked large.
What if I cannot afford the monthly amount?
Fund the bill that is due first in full, then add the next. For any bill you cannot cover in time, decide now whether part of it will come from that month’s budget or whether it can move. A plan made months ahead beats a scramble in the week the bill arrives.
Do you store the numbers I type here?
No. The calculation runs in your browser and the figures are never sent or saved anywhere. Close the tab and they are gone.