How-to
Sinking funds for the bills that don't come every month
Set aside a little each month for the bills that arrive one to four times a year, so none of them lands as a surprise.
Satisfy+ Editorial · Updated October 8, 2026 · 2 min read · 45 min to do
This is general education, not individual financial, investment or tax advice.
At a glance
- Which bills
- The ones due one to four times a year
- The math
- Each bill divided by the months until it's due
- Where the money waits
- A savings account, by transfer
- The calendar
- Every irregular bill, month by month
Some bills arrive only a few times a year, and a month with one of them can feel like a surprise. Car insurance, renter's insurance, tools for your trade, back-to-school costs, birthdays and holidays all come one to four times a year. A sinking fund is money set aside a little each month for one of those bills.
What you need
- Last year's bank and card statements, or a year of bills
- A calendar for the coming year
- A savings account
Steps
- 1
List the irregular bills
Go through a year of statements and note each bill that came only a few times. For a home, that can include the homeowners or renters insurance, a property tax bill that isn't escrowed, and the yearly service on the furnace.
15 min
- 2
Put each one on the calendar
Lay out the irregular spending by month, total it for each month, and note which months bring those bills.
10 min
- 3
Work out each monthly amount
Divide each bill by the months until it's due. A yearly bill due in eight months is its amount divided by eight.
10 min
- 4
Add them up
The sum of the monthly amounts is what to set aside each month, across all the bills.
3 min
- 5
Make the transfer automatic
Set up a recurring transfer from checking to savings through your bank or credit union. You decide how much and how often.
5 min
- 6
Post the calendar where you'll see it
A calendar on the wall reminds you when each expense comes due. Each bill on it now has a monthly amount beside it.
2 min
Set up sinking funds
- List every bill that comes one to four times a year
- Set up a monthly transfer for each irregular bill
- Check the list against the coming year's calendar
Without a fund
When nothing is set aside, an irregular bill still gets paid some other way. That can mean skipping another bill, putting it on a credit card or borrowing from family or friends. It can also mean a payday loan, a pawn shop or a car title loan. A sinking fund pays the bill from money already saved instead.
One-time deposits
Money that arrives once can go in too. You might move $200 of a $2,000 tax refund into the fund the week it lands, then carry on with the monthly transfers. Add the monthly total to your budget as its own line, so it's planned like rent or a car payment.
When a bill comes due
Pay it from the savings, then reset that bill's monthly amount for the next cycle. A bill that went up gets a new, larger share.
For the house
Home repairs are irregular too, though they don't arrive on a schedule. How to estimate your home's upkeep costs sets a yearly figure you can divide the same way.
Watching the checking balance
Know your monthly income and expenses before setting up transfers, because a transfer your checking account can't cover may bring an overdraft fee. An automatic balance notification or a calendar reminder helps you keep an eye on it.
FAQ
What expenses need a sinking fund?
Expenses that come one to four times a year, such as car insurance, renter's insurance, back-to-school costs, birthdays and holidays.
How much should I put in each month?
Divide each bill by the months until it's due.
Sources
Checked October 20, 2026
- Consumer Financial Protection Bureau. Savings plan, Your Money, Your Goals module 2 tool 1 (2015)
- Consumer Financial Protection Bureau. Planning for the year (2021)
- Consumer Financial Protection Bureau. My new money goal, financial planning worksheet (2021)
- Consumer Financial Protection Bureau. An essential guide to building an emergency fund (2026)
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