What this planner works out
A sinking fund is money set aside monthly for a cost you know is coming. This planner takes the target amount, the months remaining and anything already saved, and returns the monthly and weekly amounts needed.
It exists to solve the single most common budgeting failure: costs that are entirely predictable but do not arrive monthly. Car insurance, Christmas, servicing, school uniform and boiler cover are not emergencies — they are appointments.
Create sinking funds
Before you set one up
- Use the amount you will actually need, based on last year's cost plus an allowance for price rises.
- Count the months precisely to the point the money is needed, not roughly.
- Keep sinking funds separate from your emergency fund. They do different jobs and raiding one for the other defeats both.
- Set up several small funds rather than one large pot, so you can see what each is for.
A cost known twelve months in advance and funded monthly is invisible when it arrives. The same cost met from whatever happens to be in the account becomes a bad month, an overdraft or a credit card balance. The arithmetic is identical; the outcome is not.
How this calculator works
Two steps and a conversion:
Amount still needed = target − already saved
Monthly saving = amount still needed ÷ months remaining
Weekly equivalent = monthly × 12 ÷ 52The weekly conversion uses the correct 12 ÷ 52 ratio rather than dividing by four, because a month averages about 4.35 weeks. Dividing by four would understate the weekly amount by roughly 8%.
Worked example: a £600 goal in ten months
Using the default figures — a £600 target, ten months to go and £100 already saved:
- Amount still needed: £600 − £100 = £500
- Monthly saving: £500 ÷ 10 = £50
- Weekly equivalent: £11.54
£11.54 a week is a recognisable amount — roughly two coffees, or a takeaway coffee habit reduced rather than abandoned. That is the value of the weekly conversion: £600 is a problem, £50 a month is a commitment, and £11.54 a week is a decision you can actually picture making.
Common mistakes
- Using last year's cost without an uplift. Insurance and servicing rarely stay flat.
- Keeping the fund in your current account. Money alongside spending money gets spent.
- Raiding it for something else. The cost still arrives on the same date.
- Running one large undifferentiated pot. You lose track of what is committed and what is spare.
- Starting too late. A twelve-month cost funded over three months is three times harder.
Frequently asked questions
What should I have sinking funds for?
Anything predictable that does not arrive monthly: car insurance, road tax, MOT and servicing, home and contents insurance, Christmas and birthdays, school uniform and trips, holidays, pet vaccinations and boiler servicing. Most households find between five and ten items, and the total is usually larger than expected — which is precisely the point of listing them.
How is this different from an emergency fund?
An emergency fund covers the unexpected — job loss, a boiler failing, an urgent repair. A sinking fund covers the expected but irregular. Mixing them means a known cost eats the buffer that exists for genuine emergencies, so the next real emergency arrives with nothing behind it.
Where should I keep the money?
A separate instant-access savings account works well, and many banks now offer pots or spaces within an account that let you label several funds without opening separate accounts. Labelling matters more than the interest rate at these amounts — a named pot is far less likely to be spent by accident.
What if I cannot afford all my sinking funds?
Fund them in order of consequence. Insurance and road tax are legal requirements and come first; Christmas can be reduced. Listing every fund and its monthly cost usually reveals that the total is the problem rather than any individual item, which is a budgeting question rather than a saving one.
Is what I enter stored?
No. Goal names and amounts are processed in your browser and never transmitted or retained.
Related tools
References
- MoneyHelper — budgeting guidance including planning for irregular costs
- Bank of England — the base rate, which sets what a sinking fund held in savings is likely to earn
- Financial Conduct Authority — how savings accounts are regulated, and the deposit protection limit that applies if a provider fails
Sources are checked at publication and can change — how I choose and check references.