The problem with yearly bills
Some of the most stressful bills are not the biggest monthly ones. They are the yearly ones: insurance, software plans, memberships, domain names, vehicle registration, holiday gifts. They arrive once, they are large, and they are easy to forget until the charge appears.
A month that looks fine for eleven months breaks in the twelfth.
The idea
A sinking fund spreads a known future cost across the months before it is due. Instead of finding $600 in one month, you set aside $50 a month for twelve months.