New or old, your car needs servicing while you try to get out of debt. From routine oil changes to emergency transmission repairs, cars always have some work to do. It’s Smart Repair München our unpreparedness to meet these maintenance needs that turns car ownership into a debt nightmare. Not being prepared for a car repair makes it an emergency, and how do most people pay for these emergencies? By putting them on a credit card, of course. Which can add up over time. Here’s how to budget for auto repairs while paying off debt .
1. Cars need routine maintenance
If you drive a car, you need to be aware that cars over time require routine maintenance. Even if you own a brand new car, there are routine maintenance requirements that need to be performed on a regular basis. Check your owner’s manual for the schedule, but usually it’s around 1000 miles, then 20,000 miles, 35,000 miles, 60,000 miles, 90,000 miles and so on. In addition, cars need to be changed about every 3000 to 5000 miles.
These routine maintenance intervals should not be emergencies. They are laid out very clearly for you by the car manufacturer. So you should have enough time to budget and prepare them.
2. Cars unexpectedly need repairs
Second, you need to understand that over time, cars require unexpected repairs. What we often call emergency repairs. Under the hood, cars are a symphony of many moving, mechanical parts. These parts wear out over time. Expect to repair the muffler, transmission, radiator, injectors and engine over time . Tires need to be replaced. Brake pads need to be replaced. So they really shouldn’t be unexpected. The only unpredictable bit will likely be how much a particular repair may cost.
3. Budget for it
So how do you prepare for a car repair? You budget, of course. Every month, or maybe every paycheck , you determine a fixed dollar amount that you want to put into your auto repair fund. $100 a month is a good goal. If you can’t afford that much right away, then make it as much as you can afford. $20 or $50 a month are also good goals. Any amount is better than nothing.
4. Auto Fund
Whatever amount of money you budget, put that money in a “car fund.” Nothing complicated. Set up a separate auto repair savings account with your bank if you like. Then you can simply transfer the money yourself online or have your company deposit the money directly into that account for you if they offer this service. If you’re good at tracking your money, you can even just keep it in a general savings account and then track how much of that money is set aside for auto repairs in a spreadsheet. Choose a method you like to store the money.
5. Plan a little more
Look at your routine maintenance schedules earlier in the year to see what scheduled maintenance may be required. In fact, you should be able to get a list of approximate prices from your dealer’s service department or your mechanic. Then plan a little extra each month so you can budget and cover those costs when the time comes.
6. Contingency Fund
Note that no mention has been made of dipping into your emergency funds up to this point. By now you should realize that your cars need repairs. And if you plan ahead for these all year long, then most scenarios shouldn’t really be an emergency. But only a temporary inconvenience. However, there will come a time when a car repair will be so extensive that you may not have all of the money in your car fund to pay for it. In Smart Repair München this case, you pay what you can from your car cash register. And then draw on your emergency fund to cover the rest.
By now you should be aware that car repairs, whether routine or unexpected, need to be done every year. By creating a car insurance fund and budgeting for it, you can easily cover 95% of all car repairs without them becoming emergencies. And you don’t have to pay them with credit cards. For any amount that you can’t cover with car insurance, contact your emergency fund to cover the rest. So start budgeting for car repairs, keep paying off debt and build wealth .