I’ve mentioned many times that in our family’s budget, I have budgeted an “auto fund” which is where we automatically transfer $75 a week to a savings account designated for all things car-related. So, if one of our cars was to break down and we needed to repair it, the money would come from this account. I would simply just transfer the money from our auto fund savings account to our checking account.
This account has saved our tails more times than I can count. It not only holds us accountable for keeping auto stuff in our budget by having it automatically withdrawn every week but it also allows us to not have to stress over major car stuff. Both of our cars are over 10 years old and have high mileage on them and as such they usually end up needing a few repairs every year. They also need things like tires, oil changes (**bonus tip, if you have an older vehicle make sure you up the weight of the oil you use. The thicker consistency will help lubricate your engine better and help it preform better with higher mileage.), brakes, and the list goes on.
If you need more convincing on building up your family’s auto fund account, here’s the story behind our $5,000 truck repair that really should have only costs us pennies….(you can read the full post here on Thrifty Little Mom or the spinet below)
Way back in 2009, my husband and I were newlyweds. We were still trying to figure out this whole managing money together thing. It was not easy and by the end of 2009, we had learned a very valuable lesson in managing money, to the tune of $5,000.
My husband was in his first year of owning his own business and using his truck as a workhorse. His truck was almost paid for and ran like a champion. Then one day, she did not run like a champion. It was a hot summer day when she started acting up.
My husband is a total handy man and will try and try to diagnose and fix a problem himself before paying someone else to do it for him. Therefore, my husband and his best friend sacrificed precious working hours to try to fix his truck.
Only, they could not figure out the problem. My husband had no choice but to bring her in to the shop to determine why she was running was bad. The shop told him it was the radiator. Once again, my husband was not about to pay to have them replace the radiator since it was going to be double what he could do it for. So he replaced it, only that did not solve the problem.
Back to the shop she went and another diagnosis telling my husband that it was the water pump. Once again, my husband replaced what they told him was wrong. This continued for a week until I finally looked at my husband and said, “We have paid $5,000 chasing a fire, which is the current value of your truck. If you spend one more dime fixing your truck and it does not fix it, we will have to sell it and get another truck. We cannot keep spending money like this because we do not have it.”
Read the full post here on Thrifty Little Mom
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Liz S says
Great post! Love the idea to have the withdrawals be automatic so that other emergencies (takeout for dinner, new purse, lol) don’t creep into my mind and keep me from making the transfer to savings that month. 🙂 I have some questions: Is this account used just for maintenance and repairs? Do you find that with 2 older vehicles needing work yearly as you mentioned, that this account sometimes gets almost drained? Or does this account have lots of excess (as you mentioned currently contributing 300/month) and therefore will have so much excess that it will provide your next vehicle in cash in full for whoever needs a new vehicle first? Or would a new-to-you vehicle come out of another account or an emergency fund?
Jessi Fearon says
We’ve been back and forth on how to handle getting another car if/when that time comes. Currently the money that we have planned for if we need a new-to-us car would come out of this account, but it is primarily used for car maintenance stuff.
Savannah @ The Budget Prepper says
Like you, we also have a “car repair” section in our monthly budget. However, we still keep everything in one account which can lead to some mishandled spending. Currently, we are experiencing with what categories to use the cash envelope system and which others we should create an entirely separate account. Trial and error!
I’m so lucky that my husband is an ASE certified auto technician and works at a small family owned shop. His boss lets him use the shop whenever we need to (for free) AND we get the parts at his dealer cost. It’s still expensive though! I have a newer car, while my husband’s truck is nearly 10 years old. As long as the vehicles are regularly serviced and preventive maintenance is performed, you can catch a lot of things before they get to be bigger (more costly) issues!
Jessi Fearon says
That is so awesome that your husband is so handy with cars! My mom always jokes that she should have just gone to school for auto tech so she wouldn’t have to pay someone to fix her car all the time. 😉
Natasha @ The Authentic Mama says
We have put in place an emergency fund by using Dave Ramsey’s advice. That will cover anything that we need to fix with our car. It is so important to have some kind of fund because cars fail and so do their parts!
Michelle Schroeder says
Having a car fund can be extremely beneficial. You just never know what may happen!
Brian says
Having an auto fund for car emergencies is an absolute must. Everyone needs a car and having one that doesn’t run won’t help anyone.
Heather says
Having a savings account dedicated to all sorts of potential disasters can really make a difference when something eventually goes wrong. Whether it’s your house, your car, or your own health, it’s better to be prepared, especially if your insurance won’t cover all the costs. Thanks for sharing!
Drew Brown says
I put a couple thousand on the side for my car fund. Once my transmission went out and I used some of my car fund to put down on a vehicle. Now looking back, I wish I would have used the funds to buy a cheaper car cash so I wouldn’t have to deal with higher monthly payments and and the expensive auto insurance costs for my financed vehicle.