A few months ago I hit a deer with my car.Â 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.Â 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.Â 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.Â My wife and I own three automobiles, each with a $1000 deductible.Â 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.Â Each month $250 ($3000 / 12) is set aside, in my ING Direct Orange Savings Account.Â Since the accident occurred last year, I used money allocated in 2008 to pay for the repairs.
10 thoughts on “My Car Has Been Repaired”
I really like ING Direct’s checking and savings accounts. They cannot replace your current account, but it’s still a good deal. The yield higher interest than most banks. Back when the economy was good, I was making over 4% on my money. Most banks only give that for long term CDs.
I’ve also noticed that I don’t want to touch it as much as when it was in a savings account at my local bank. I can put the money in there and forget about it until it’s needed.
I also have a $1,000 deductable. Thankfully I haven’t hit any animals lately, but my emergency fund is high enough that I can cover that in an accident. I have an auto fund for maint, perhaps I should move another thousand in there like you’ve got. Be happy you have the money though. Most don’t and I goes on the card.
I have lower deductibles and recently looked into raising them to save on my premium. After looking at the results, I don’t have much monetary incentive to raise the premium. It would take a few years to recoup the cost IF something were to happen.
Very impressed with the auto expense money. What do you do with the remaining funds from 2008? Do they get rolled into another category, used for savings, or do you maybe give yourself a kickback for not having to use that money all the time? Taking 10% out to treat yourself would be a pretty good reward.
@thomas I like to keep $3000 in the auto repair column at all times… so, I’ll work through March and April to build it back to the $3k minimum… after that, I’ll use the $250 per month for some other purpose…
Kudos to you for being prepared. Emergency fund is a “must” for someone serious about getting out of the debt cycle.
I also checked on increasing my deductible to save on car insurance because of so many people mentioning it as a good way to save money. After checking I found out by raising it from $500 to $1000, I would only save around $13 a month. Not worth it in my opinion.
It’s great to read about another person who is out of debt and living the way we were intended to live, debt free. I see how you freed up your greatest wealth building tool, your income and fixing your car didn’t dent your life. Keep pushing forward.
There’s nothing better than having an Emergency Fund. You never know what unknown expense is lurking out there to destroy your financial position.
I don’t feel it necessary to “allocate” expenses for automobile repair. In my opinion this is why I have an emergency fund. If I had a repair I could not fit into my normal monthly budget it then becomes an emergency. (I must have transit to work, I need to work to make money) I would then dip into the funds that are being set aside for emergencies.
A lot of people do it your way. For me, on paper at least, I like to have things allocated. Of course, even if I didn’t have the $1000 allocated, on paper, but I had it in the bank, I’d still use the money. I guess it’s more an accounting / bookkeeping preference.
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