Sinking fund
Money you set aside a little at a time for a known future cost, like car insurance, holidays or a new laptop.
A sinking fund turns a big, expected bill into small monthly amounts. You pick the cost, the due date and divide. When the bill arrives, the money is already there.
Sinking funds are different from an emergency fund. An emergency fund covers surprises. A sinking fund covers things you can see coming, so they stop feeling like emergencies. Many people keep sinking funds in a high-yield savings account.
Example
A $600 car insurance bill due in 6 months needs $600 ÷ 6 = $100 set aside each month.