Sinking Funds

A sinking fund is money you set aside for a bill you can already name, on a month when the bill is not due. Car insurance paid once a year, holiday gifts, a repair you know the car will need, and a subscription billed once a year are the usual list. The monthly amount is the cost you still need, divided by the months until you pay it.

Oregon Community Credit Union, on a page dated April 18, 2023, calls a sinking fund a savings account dedicated to a specific expense, funded by regular deposits or transfers. The examples there include holiday shopping, vacations, insurance premiums you pay once a year, and planned maintenance on a car or a home. YNAB's article, updated October 12, 2026, calls the same pile true expenses: money set aside for costs that do not arrive monthly, such as car repairs, insurance premiums, and holiday gifts. Divide the cost by the number of months until you pay it. Latitude 32 Credit Union's financial wellness guide says the same arithmetic for a year of irregular bills: add them, divide by twelve, and move that amount each month.

Checked October 28, 2026. The prices in the apps section were read from the vendor pages linked at the end. A fact a page does not state is marked Not documented. The dollars below are an example household. They are not a quote of what your insurance, your holiday, or your car costs.

How to calculate the monthly amount

You need three numbers, and a fourth if you have already started. The first pass, writing down take-home pay and a month of spending, is on how to make a budget. This page starts once you can name a bill that skips months.

1. Name the bill. One job per line. "Car stuff" hides the insurance premium inside the repairs. Split them if the dates are different.
2. Write the amount, or a guess. A premium on a declaration page is a known number. A repair is not. YNAB's article says that when you do not know the number, guess, and it uses $100 a month for car repairs as that guess. Correct it when a real quote shows up.
3. Write the months until you pay it. A bill due in December, counted in January, has 12 months if you are funding a full year. The same bill, counted in July with nothing saved, has 6. Dividing a 6-month bill by 12 is how December comes up short.
4. Subtract what you already set aside. YNAB tells you to divide the cost by the months. The amount you still need is the cost minus cash already parked for that bill. This page uses that subtraction. It is the arithmetic, not a sentence on YNAB's page.
5. Divide. Monthly amount equals what you still need, divided by the months left. Latitude 32's version for a full year is the annual total divided by twelve. Move that amount every month, the way you move rent. Moving it before you spend the rest of the paycheck is pay yourself first. When the bill changes, change the line. Do not wait for a perfect number to start.

Worked examples

Example household only. These are round numbers chosen so the arithmetic is easy to check. They are not a budget and not a recommendation.

Four lines, each with a full year left and nothing saved yet. Car insurance is a known bill. Holidays are a known season. Car repairs are a guess. Annual subscriptions are a stack of once-a-year charges. Finding those charges, including an annual plan that posts only once, is on how to find and cancel subscriptions. A subscription you already pay every month is this month's bill. It is not a sinking fund.

$1,200 divided by 12 is $100. $900 divided by 12 is $75. $240 divided by 12 is $20. The repair line is the $100 guess, not a division, because the bill has no price yet. $100 plus $75 plus $100 plus $20 is $295. If the guess holds for a year, the repair line is $1,200 set aside. That $1,200 is the guess times 12. It is not a repair quote.

Same insurance bill, less time. $1,200 due in 6 months, with nothing saved, is $1,200 divided by 6, which is $200 a month. If $300 is already sitting in that fund, $1,200 minus $300 is $900, and $900 divided by 6 is $150. The 12-month line and the 6-month line are not both this month's plan. Use the months you actually have.

YNAB's own table, on the article updated October 12, 2026, uses different illustrations. Car repairs and maintenance of about $2,000 a year are $167 a month. A life insurance premium of $840 a year is $70 a month. Latitude 32's FAQ uses $1,200 of Christmas spending as $100 a month into a dedicated savings account. Those are their examples. This page uses $900 for holidays so the four lines stay easy to add. None of the figures is a national average.

How they fit the budget you already use

Zero-based budgeting gives the monthly amount a job. You assign the $295, or whatever your lines add to, the same way you assign rent. Income minus the assignments, including the sinking funds, equals zero. The cash is not spent. It has a name. The worked month, the thin month, and the check that the lines add up are on zero-based budgeting. That guide's example household uses $100 for car repairs and $100 for holiday gifts. Those two lines are this arithmetic.

An envelope is a cap on one fund. Vanguard's envelope steps are: label an envelope for each expense, put cash in it when you are paid, spend only what is in that envelope, and move cash from another envelope if you want to spend more. A sinking-fund envelope is one you fill on payday and do not open until the bill. Vanguard does not say the envelopes must add up to income. An envelope for insurance, with the rest of the paycheck still unnamed, is the envelope method without the zero. Doing both is the zero-based guide, not a third system.

50/30/20 is three percentages of take-home pay. Needs are 50 percent, wants are 30 percent, and savings plus debt payoff are 20 percent. The lists, the pitfalls, and what to do when rent breaks the 50 percent are on the 50/30/20 budget rule guide. A sinking-fund contribution is money you are not spending this month, so it is one way to give part of the 20 percent a name until you spend it. Car insurance is a need in the month you pay the insurer. Holiday gifts are closer to wants in the month you buy them. The CFPB worksheet that publishes the rule does not use the words sinking fund. Not documented there. A calculator on this site multiplies a number you type. The 50/30/20 preset is one of the splits. It does not build the table above. Open it at the budget calculator.

A shared bill can be one shared line. Two people funding one insurance premium do not need two funds for the same policy. Who contributes, and whether the account is joint, is a different decision. That walkthrough is on how to budget as a couple.

Where to hold the money

The fund has to be there when the bill is, and it has to be hard to spend on a Tuesday. No page checked for this guide requires one account type. Not documented as a single rule. Three setups cover what the sources actually describe.

One savings account, or a few. The CFPB's emergency-fund guide says a bank or credit union account is generally one of the safest places to keep a reserve, and that a dedicated account is one option. The same guide says a recurring transfer from checking to savings is a common way to make the saving automatic. Watch the checking balance. A transfer that lands when checking is short can become an overdraft fee. A separate CFPB page says FDIC insurance covers accounts of $250,000 or less under the same owner or owners if the bank fails, and that more than $250,000 at one bank, or several accounts with the same owners, is insured only up to $250,000. The same page says credit union accounts are insured in a similar way by the NCUA. That figure is insurance if the institution fails. It is not a return, and it is not a reason to split one fund across banks.

Oregon Community Credit Union says you can open a separate savings account for each predictable expense, fund it with regular deposits, and treat the transfer like any other bill, including an automated transfer so you do not have to remember. The same page says not to open so many that you stop. Start with two or three, and add one when a new bill earns it. The page also says that instead of paying interest, you earn interest on the balance while you save. It does not promise a rate that every account pays. A fee that eats the transfer is the thing to check before you open the account. OCCU says to choose an account that is easy to reach and does not charge fees.

One account, many names. YNAB's article says separate savings accounts work, and that they do not scale: one account per goal becomes a dozen transfers. Categories are the simpler version. The cash sits in one account. The budget, on paper or in an app, is what says which dollars are insurance and which are holidays. You can hold many sinking funds without opening a new account. The checking balance will look larger than what is safe to spend. The lines are the correction.

Cash in an envelope. Vanguard's envelope is physical cash, or a digital stand-in, labeled and spent only for that label. It works for a holiday fund you can see. The CFPB guide says cash kept at home can be stolen, lost, or destroyed. Use it for an amount you can afford to hold, not for the whole insurance premium if losing the envelope would mean you cannot pay the bill.

Common mistakes

Dividing by 12 when the bill is sooner. The $1,200 insurance line is $100 only when you have 12 months. Six months and nothing saved is $200. The quiet version of the mistake is a budget that still looks fine in July.

A named bill called an emergency. YNAB says a sinking fund is for what you can see coming, and an emergency fund is for what you cannot, such as a medical bill or a loss of income. The CFPB emergency-fund guide lists car repairs next to medical bills and a loss of income, as unplanned expenses. The pages do not match on car repairs. If you can name the repair and roughly price it, give it a line, so the emergency fund stays for the bill you could not name. OCCU's reason for a separate account is the same: the emergency fund is easy to dip into when it is the only pile.

A dozen accounts on the first Saturday. OCCU says two or three is enough to start. YNAB says the category list scales and the account list does not. Open another account when you keep spending the wrong dollars, not because a blog listed four funds.

Leaving the annual subscriptions off. They post once, so a single month of card activity hides them. The $20 line in the example is $240 a year. Your number is whatever the statements show. The hunt is the subscription guide linked above.

Spending the fund because the balance looks high. $295 set aside is not money for a weekend. It is insurance, holidays, repairs, and the annual charges, sitting early. YNAB's article is about having the money already there when the bill arrives, including the bill you would otherwise put on a card.

Monarch Money

Monarch Money is the mainstream app to compare if you want the set-aside tracked against accounts you have already linked, without running a required zero. It is the default pick in that comparison. The words sinking fund: Not documented on the goals pages or the flex budget page read for this guide.

What it does ship, for this kind of bill, is two different screens. Flex budgeting is the default budget type. The creating-your-budget article, updated October 22, 2026, says category budgeting assigns every expense category an amount, and flex budgeting tracks one flexible spending number. The flex article, updated August 14, 2026, sorts expenses into Fixed, Non-monthly, and Flex. Non-monthly examples include annual subscriptions, car maintenance, and holiday gifts. Rollovers stay on for that bucket. You set a target amount and a frequency, and Monarch rolls unspent amounts forward.

The same article's insurance example is a $600 payment every June and December. Frequency is every six months. The target amount is $600. The page says the system then sets aside $100 a month, because $600 divided by 6 is $100. January's $100 becomes $200 in February, and so on, until June has the $600. The payment spends it, and the rollover goes back to $0 for the next half year. That is the division on this page, done inside a budget category. It is not a second copy of needs, wants, and savings.

Save up goals are the other screen. The goals overview, updated October 20, 2026, splits goals into Save up, for money you are setting aside, and Pay down, for debt tied to liability accounts. The Save up article, updated October 19, 2026, says each goal can have a target amount, a target date, and a planned monthly contribution. A status of on track, ahead, or at risk shows up only when all three are filled in. Goal types in the steps include vacation, down payment, and emergency fund. You choose whether spending reduces goal progress. The article says to turn that on for a goal you want to refill, and uses an emergency fund as that example. Leave it off for a one-time goal, and the example there is a vacation.

A goal with a planned monthly contribution shows up in the budget under Contributions, as a line in Save Up Goals. You can change this month, or future months. Fund allocations move money into a goal, or out of one, without waiting for a transaction to post. You can also link an income or transfer transaction to the goal, by hand or with a rule. Cash, checking, and savings accounts can fund goals. Whether a Non-monthly category and a Save up goal for the same insurance bill count the dollars twice: Not documented. They are separate screens on the pages checked here. Use one of them for a given bill until you have a reason to use both.

Two limits from the October 22 budget article matter if the cash actually moves. Transfer and Credit Card Payment categories are excluded from budgets and cash flow. A transfer to your own savings, filed that way, will not show as spending in the budget. And account balances are described as a tool for long-term goals, not for the month's plan. The contribution is the plan. The balance is where last month's contribution went.

Price, read on monarch.com/pricing on October 28, 2026. There is no free plan. The pricing help, updated March 3, 2026, says Monarch only offers paid subscriptions, in US dollars, plus tax where it applies. Core is $14.99 a month, or $8.33 a month when billed $99.99 a year. Plus is $16.67 a month, billed $199.99 a year. Both plan cards say a free 7-day trial, then that price, and that a payment method is required. Cancel in settings before the trial ends. A month-to-month Plus price was not on the page. Not documented. The Plus help, updated August 31, 2026, says Plus is billed annually and names the 7-day trial. It points at the pricing page for the dollar amount. The Core card lists savings and debt goals. Plus, on the August 31 article, keeps budget, cash flow, goals, net worth, and connected accounts, and adds forecasting and investment tools. A Non-monthly category or a Save up goal limited to Plus: Not documented on the pages checked here.

Monarch also publishes an MCP connector, updated October 22, 2026, for Core and Plus. Read-only is the default. Write access is separate, and you allow it. That connector is a way to ask about goals and categories you already have. It is not a sinking-fund button, and it is not a free plan.

YNAB

YNAB is the method app. The article cited above is theirs. A sinking fund is a category, the same way rent is a category. When new money arrives, you assign some of it to that category. The article says you can add a savings target: you decide how much you want saved, and YNAB calculates how much to assign each month to reach it. The app then shows how much to add to stay on track. That target is the division, with a reminder. You can still do the division on paper and type the monthly amount yourself.

Where the cash sits is the choice in the section above. YNAB's answer is categories in one account once the account list gets long. The emergency-fund split is also theirs: predictable bills in the sinking fund, a medical bill or a loss of income in the emergency fund. Price, read on ynab.com/pricing on October 28, 2026. The monthly plan is $14.99. The annual plan is $109, shown as $9.08 a month. Both are US dollars, plus tax where it applies. The trial is 34 days. No credit card is required when you sign up directly through YNAB. The page says third-party app stores may require a card for a trial. A head-to-head with Monarch, for when the method matters more than the monthly price, is YNAB vs Monarch Money.

Where FYN fits

FYN is our product, and it is last. The monthly number on this page is a number you write. A sinking-fund screen, or a savings goal with a target date: Not documented on the pricing page. The pricing page lists an autopilot budget on Free and on Pro, next to the home screen and a spending map. It does not say that budget divides a future bill by the months left.

What the pricing page does list is the record you use to pick the next number. Receipt photos and emailed receipts are one monthly count, 20 a month on Free and 200 a month on Pro. Apple Pay and Google Wallet purchases are logged as you pay, on Free and on Pro. An annual subscription, a premium, or a repair you paid that way shows up as you pay it. Ask FYN is 20 questions a month on Free and 500 on Pro. You can ask about the receipts and the purchases you have saved.

The free plan is $0. It does not expire and does not ask for a card. It includes 1 household member. A read-only connector lets assistants such as Claude and ChatGPT read FYN data. The free plan includes 500 MCP calls a day. Pro includes 10,000 a day. The MCP docs say a free account does not sync bank accounts, so tools that read bank data return little or no data until a bank is linked. Linking a bank is not on the free plan.

Pro is $9.99 a month. Bank sync is Pro only, through Plaid, for up to 15 accounts. That is the feed that catches the annual charge when it posts, including a charge that never produced a receipt photo. The pricing page lists unlimited household members on Pro. Everyone shares the plan's limits. A shared member can be an owner, a member, or view-only. Monarch also publishes an MCP connector, on Core and Plus, read-only unless you allow write. Updated October 22, 2026. FYN is not the only one. The plan table is on pricing.

FAQ

Sources

Checked October 28, 2026. These are the pages behind the guide. A line marked Not documented is a fact the linked page does not state.

• Oregon Community Credit Union, April 18, 2023. A sinking fund is a savings account for one expense, funded by regular deposits. Examples include holiday shopping, annual insurance, and planned car or home maintenance. Start with two or three funds. Treat the transfer like a bill: What's a sinking fund?.
• Latitude 32 Credit Union, financial wellness guide. Add annual irregular expenses, including holiday gifts, annual subscriptions, and insurance premiums, and divide by twelve. The FAQ's Christmas illustration is $1,200 a year as $100 a month. The page does not print a date: A complete guide to budgeting and financial planning.
• YNAB, updated October 12, 2026. Sinking funds, also called true expenses, are money set aside for non-monthly bills. Divide the cost by the months. A guess of $100 a month is the car-repair example. The table uses about $2,000 a year ($167 a month) and an $840 premium ($70 a month). Categories in one account, or separate savings accounts. A target can calculate the monthly assign: What are sinking funds?.
• CFPB emergency-fund guide, last modified October 29, 2025. A cash reserve for unplanned expenses. Examples include car repairs, home repairs, medical bills, and a loss of income. A dedicated bank or credit union account, a recurring transfer, and the overdraft caution. Cash kept at home can be stolen, lost, or destroyed: An essential guide to building an emergency fund.
• CFPB, how can I be sure my money is safe. FDIC insurance covers $250,000 or less under the same owner or owners. More than that at one bank is insured only up to $250,000. Credit union accounts are insured in a similar way by the NCUA: How can I be sure my money is safe in my bank account?.
• Vanguard, How do I make a budget? Envelope steps: cash in labeled envelopes, spend only what is in the envelope, move cash if you overspend: How do I make a budget?.
• Assigning every dollar, including a sinking fund, until income minus assignments equals zero: zero-based budgeting.
• Needs, wants, and the 20 percent for savings and debt. This page links it instead of repeating the bucket lists: the 50/30/20 budget rule.
• Take-home pay, fixed bills, and a first month of spending, before you price the non-monthly bills: how to make a budget.
• A shared sinking fund inside a yours, mine, ours plan: how to budget as a couple.
• Finding an annual subscription that posts once a year: how to find and cancel subscriptions.
• The calculator on this site. You type the income. It runs percentage splits, including 50/30/20: budget calculator.
• YNAB and Monarch, when the method matters more than the monthly price: YNAB vs Monarch Money.
• Monarch Core and Plus prices, the 7-day trial, and the payment method. Core $14.99 a month or $99.99 a year ($8.33 a month). Plus $199.99 a year ($16.67 a month). The Core card lists savings and debt goals: monarch.com/pricing.
• Monarch pricing help, updated March 3, 2026. Paid subscriptions only. The dollar amounts are on the pricing page, not in this article: Pricing.
• Monarch Plus, updated August 31, 2026. Plus is billed annually. A 7-day trial. Budget, cash flow, goals, net worth, and connected accounts stay on the plan you already have: Monarch Plus tier.
• Creating your budget in Monarch, updated October 22, 2026. Category and flex budgeting. Flex is the default. Transfer and Credit Card Payment are excluded from the budget: Creating your budget.
• Flex budgeting, updated August 14, 2026. Fixed, Non-monthly, and Flex. A $600 insurance bill every six months is $100 a month with rollovers: Using Flex Budgeting.
• Goals in Monarch, updated October 20, 2026. Save up goals and Pay down goals: Goals in Monarch.
• Using Save Up Goals, updated October 19, 2026. Target amount, target date, and planned monthly contribution. The contribution appears in the budget under Save Up Goals: Using Save Up Goals.
• Monarch MCP connector, on Core and Plus, read-only unless you allow write. Updated October 22, 2026: Monarch MCP connector.
• YNAB prices. $14.99 a month, or $109 a year shown as $9.08 a month. A 34-day trial. No credit card when you sign up directly through YNAB: ynab.com/pricing.
• FYN pricing. Free does not expire and does not ask for a card. One household member on Free. Receipts 20 a month. Apple Pay and Google Wallet purchases logged as you pay. Ask FYN. Pro is $9.99 a month, with unlimited household members. Bank sync is Pro only, up to 15 accounts: pricing.
• FYN MCP docs. Read-only. 500 calls a day on the free plan. A free account does not sync a bank: MCP docs.