A few months ago I hit a deer with my car. After a little internal-debate about whether to have the car repaired or trade it in for something newer, I decided to keep the car and have it repaired. I happy to report, the car has been repaired, and it looks great.
I have a high deductible – $1000 – and it felt a little strange writing a check for that much money for repairs on a nine year old car. Thankfully, I actually have a budget-category, labeled automobile repair, from which I withdrew the deductible payment.
It’s so important, when creating a budget, that I remember unplanned-for expenses. My wife and I own three automobiles, each with a $1000 deductible. Instead of relying on our emergency fund, which is really there to protect us should one of us lose our job, we prefer allocate funds, on a monthly basis, for the specific purpose of paying our deductibles. Each month $250 ($3000 / 12) is set aside, in my ING Direct Orange Savings Account. Since the accident occurred last year, I used money allocated in 2008 to pay for the repairs.