# Sinking Fund

A sinking fund is money you save incrementally for a planned future expense — like a vacation, insurance premium, or holiday gifts — so the cost doesn't hit all at once.

## Why it matters

Irregular expenses are budget killers. A $1,200 annual insurance premium feels overwhelming in one month but manageable at $100/month saved ahead of time. Sinking funds turn lumpy, stressful expenses into predictable monthly line items.

Example

Planning a $2,400 vacation in 8 months? Set aside $300/month in a sinking fund so the money is ready when you book.

## How Ray helps

Ray can identify your recurring annual and semi-annual expenses from past transactions and suggest monthly sinking fund amounts. Ask to surface bills that caught you off guard last year.

Terminal

`$ ray "what large expenses should I be saving for?"`

## Related terms

[Budget](/content/learn/budget/index.html) — A budget is a plan for how you'll allocate your income across spending categories, savings, and debt payments over a set period — usually monthly.

[Emergency Fund](/content/learn/emergency-fund/index.html) — An emergency fund is cash set aside specifically for unexpected expenses like medical bills, car repairs, or job loss.

[Zero-Based Budget](/content/learn/zero-based-budget/index.html) — A zero-based budget assigns every dollar of income a specific job — spending, saving, or debt payment — until your income minus your allocated amounts equals exactly zero.

[Savings Rate](/content/learn/savings-rate/index.html) — Your savings rate is the percentage of your income that you save or invest rather than spend.

[Cash Flow](/content/learn/cash-flow/index.html) — Cash flow is the net amount of money moving in and out of your accounts over a period.

## Try Ray free

Open source, local-first, and takes five minutes to set up.

`$npm install -g ray-finance`  [View on GitHub](https://github.com/cdinnison/ray-finance)