Big yearly bills love to show up like a surprise—even when you know they’re coming. And a lot of people don’t have the buffer they’d like: a Bankrate survey found just 47% of Americans said they have enough liquidity or access to funds to cover an unexpected $1,000 emergency expense.[^bankrate]

That’s exactly why sinking funds are so powerful: they turn “ugh, not this month” into “already handled.”

What a “sinking fund” actually is (in plain English)

A sinking fund is money you set aside every month for a bill that isn’t monthly—think car insurance, holiday gifts, annual subscriptions, school uniforms, or pet checkups. YNAB describes it as setting aside money each month to prepare for non-monthly expenses.[^ynab-sinkingfund]

Instead of saving “whenever you remember,” you give each big, predictable expense its own mini-plan.

The tiny formula that makes this work

You don’t need fancy math. You need one line:

Monthly amount = (Total bill ÷ months until due)

Example:

  • Annual car insurance: £600
  • Due in: 10 months
  • Sinking fund transfer: £600 ÷ 10 = £60/month

That’s it. Once you set that transfer, the bill stops being scary.

Why this matters (3 quick stats)

  • “Sixty-three percent of adults said they would cover a hypothetical $400 emergency expense…”[^fed]
  • Bankrate’s most recent Emergency Savings Report (polled December 2025) says 47% have enough liquidity/access to cover a $1,000 emergency expense.[^bankrate]
  • The same survey found 30% would pay a $1,000+ emergency expense from savings (with others relying on income, debt, or other approaches).[^bankrate]

Sinking funds won’t solve every emergency—but they dramatically reduce the number of “emergencies” that were actually predictable.

What to look for in a sinking fund app

If you want an app to genuinely help with yearly bills, prioritize:

  • Buckets/envelopes/spaces (separate “pots” for each bill)
  • Targets (goal amount + due date)
  • Automation (scheduled transfers or planned spending)
  • Easy spending (so paying the bill is frictionless)
  • Shared options (if you manage household bills with someone)

5 sinking fund apps that make yearly bills easier

Below are five options that handle sinking funds in slightly different (but very usable) ways.

1) YNAB (You Need A Budget) — best for “every dollar has a job”

YNAB is built around proactive planning, so sinking funds feel natural: you create categories for future costs and feed them monthly. YNAB even uses a “car repairs” example—set aside money each month and watch the category balance rise, so new tires become planned instead of painful.[^ynab-sinkingfund]

How it feels for sinking funds

  • You create a category like “Car insurance (Oct)”
  • Set a target (amount + date)
  • Fund it monthly inside your budget

Pros

  • Strong targets make yearly bills hard to forget
  • Great visibility: you can see what’s funded vs. not
  • Works well for families juggling many categories

Cons

  • Subscription cost
  • Learning curve if you’ve never used a zero-based budgeting style

2) Goodbudget — best for envelope budgeting (especially households)

Goodbudget is the classic envelope budgeting idea, but digital. Their explanation is straightforward: you divide money into category “envelopes” and spend from the right envelope.[^goodbudget]

How it feels for sinking funds

  • Create envelopes like “Christmas,” “School trips,” “Insurance”
  • Fill them monthly
  • Spend from those envelopes when the bill hits

Pros

  • Envelope method is intuitive for sinking funds
  • Handy for shared household budgeting
  • Web + mobile access

Cons

  • Envelope budgeting may feel restrictive if you prefer a looser system
  • Not a bank account, so you’re budgeting money, not physically separating it at the bank

3) Starling Bank (UK) — best “pots-style” sinking funds inside your bank

Starling’s Spaces are designed to help you “set aside and organise your money in the app.”[^starling] That’s basically sinking funds, in banking form.

How it feels for sinking funds

  • Make a Space like “Car insurance”
  • Add a target amount
  • Move money in as you go, and pull it back out when you pay

Pros

  • Clear separation inside your banking app
  • Targets keep you focused
  • Simple setup flow (Spaces → name → target)[^starling]

Cons

  • UK-focused (great if you’re in the UK; irrelevant if you’re not)
  • Spaces are great for saving, but budgeting/reporting is lighter than dedicated budgeting apps

4) Ally Bank Spending Account (US) — best for simple “buckets” for bills

Ally’s Spending Account highlights “spending buckets,” which are basically built-in partitions for your money.[^ally]

How it feels for sinking funds

  • Set up a bucket like “Annual subscriptions”
  • Funnel money into it each month
  • Pay the bill without draining your everyday spending money

Pros

  • Buckets make it visually obvious what money is “reserved”
  • Useful if you want sinking funds without a full budgeting system
  • Great for people who mostly need organization, not analytics

Cons

  • US-focused
  • Bucket features depend on the account setup you use (so it’s not as flexible as a pure budgeting app)

5) Quicken Simplifi — best for planned spending + savings goals in one view

Simplifi’s pitch is a “Spending Plan” that starts with income, subtracts bills, and helps you set aside money for planned spending—plus it explicitly supports savings goals.[^simplifi]

How it feels for sinking funds

  • Add planned spending (like “birthday gifts” or “car maintenance”)
  • Build savings goals for bigger annual hits
  • Watch your month-by-month cash flow without guessing

Pros

  • Strong for people who want forecasting and cash-flow clarity
  • Combines planned spending + goals (good sinking-fund combo)
  • Useful if your annual bills vary and you want flexibility

Cons

  • Subscription cost
  • “Planning” style may feel less hands-on than envelope/bucket systems if you like rigid boundaries

A quick “pick the right one” guide

  • If you want the most control and don’t mind a learning curve: YNAB
  • If you love categories and “envelopes” make sense in your brain: Goodbudget
  • If you want sinking funds right inside your UK bank: Starling
  • If you’re in the US and want simple buckets inside your bank: Ally
  • If you want planning + projected cash flow with goals: Quicken Simplifi

Trends: where sinking fund apps are heading

A few shifts are making sinking funds easier (and more common):

  • Bank apps copying budgeting apps: more “spaces,” “buckets,” and goal features inside checking/savings
  • Automation everywhere: scheduled transfers, rules, and nudges so you don’t rely on willpower
  • More realistic budgeting: instead of pretending every month is “normal,” apps are building better tools for irregular expenses (the real reason budgets break)

Conclusion

Sinking fund apps don’t magically make bills cheaper—but they make them predictable. When you split annual costs into monthly chunks and keep the money clearly separated, your future self gets to pay the bill like it’s just another Tuesday.

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