Sinking Fund Calculator
How much should you set aside from each paycheck for a bill that's coming up? Enter the amount, the due date and how you're paid.
How the calculator works
- It takes what you still need: the amount minus what you have already saved.
- It lists your paydays from your next payday up to the day before the due date.
- It divides what you need by the number of those paydays and rounds up to the cent, so the last payday doesn't come up a few cents short.
Twice-a-month pay is counted as the 15th and the last day of each month, the most common schedule. If your employer pays on other days, choose the schedule that matches most closely, or count your paydays and divide by hand.
Worked example
Car insurance of $480 is due on April 15, 2027. You're paid every two weeks, and your next payday is Friday, October 23, 2026. Paydays before April 15 fall on October 23, November 6 and 20, December 4 and 18, January 1, 15 and 29, February 12 and 26, March 12 and 26, and April 9: thirteen paychecks.
| Amount needed | $480.00 |
| Paychecks before the due date | 13 |
| $480 ÷ 13 = $36.923… rounded up | $36.93 |
| Or, rounded to the next dollar | $37.00 |
Setting aside $37 a paycheck reaches the goal with $1 to spare. When the bill is paid, start the next round right away, so the following renewal is just as painless.
Common sinking funds
- Car: insurance paid every six or twelve months, registration, tires, routine maintenance.
- Home: renter's or homeowner's insurance, property tax if it isn't escrowed, repairs.
- Seasonal: holiday gifts, back-to-school, summer camps, winter heating bills.
- Annual subscriptions and memberships that renew once a year.
- Planned purchases: a phone, a laptop, a trip.
An emergency fund is different: it's for costs you can't predict. The CFPB's page on emergency funds (linked below) explains how to start one.
Tips
- Treat it like a bill. Set the sinking-fund amount aside on payday, before the spending envelopes.
- Keep it out of reach. A separate savings account or a clearly labelled envelope stops it being spent by accident.
- Start late? Catch up gradually. If the per-paycheck amount is too high, put in what you can and plan to cover the gap from a three-paycheck month (see the three-paycheck months tool).
Frequently asked questions
What is a sinking fund?
Money you set aside a little at a time for a bill or purchase you know is coming, such as car insurance, registration, holiday gifts or a vacation, so it doesn't land on one paycheck.
How do I calculate how much to save per paycheck?
Subtract what you have already saved from the amount you need, count the paydays left before the due date, and divide. Round up to the cent (or the dollar) so you reach the goal.
Which paydays count?
Paydays before the due date. A paycheck that arrives on the due date itself is cutting it too close, so the calculator leaves it out.
How many sinking funds should I have?
Start with the two or three irregular bills that have hurt your budget before. Add more once those are running.
Sources
- CFPB, What is an emergency fund?
- Consumer Financial Protection Bureau, Budgeting: how to create a budget and stick with it
- U.S. Financial Literacy and Education Commission, MyMoney.gov