It isn’t cheap to have a car. Take the car payment out of the equation entirely. Everything else simply adds up regardless of a car payment. The gas is its own frustrating expense. Vehicles can break down at any time. It’s all a bit too much.
Below is a step-by-step guide for managing car expenses over time. It begins by setting up the monthly costs and budgeting the potential problems and the expected maintenance.
Budget the Guaranteed Expenses
How much will it cost to just keep the car going where it needs to go? There are two main expenses that have to be applied. They can’t be avoided and are normally included in the main monthly budget. These are insurance and the gas.
Make sure these things are properly factored into the monthly budget. People miss these necessities. Leave a little buffer room.
Set Aside the Maintenance Fees
Maintenance costs always seem to sneak up on drivers, and it makes sense. These things are not part of the day-to-day expenses. But, remain diligent in setting aside a little extra in the bank towards a specific expected maintenance. For example, if the brakes are going and they need to be replaced by the summer, put aside $25 a month. By the time summer rolls around, the driver has $200 to put towards the project.
Set aside small portions for expected maintenance. When a need does come up (and it inevitability will), it won’t be a massive financial problem. Remember, these funds are dedicated towards car maintenance, such as an oil change or expected adjustment.
Any financial professional will suggest an emergency fund to account for what may happen in time: a car breakdown. Set aside a manageable emergency fund and prioritize it. Cancel Netflix for six months to reach the emergency goal. Eat cheap for the summer. Do what it takes to set aside that $1,000 for emergencies, and then add fun things back once the fund is reached.
Break car maintenance and management into these three areas to get a handle on the costs of owning a car. All it takes is diligence. Take care of the money part before the fun part.