One weekend recently, I needed to take my car in for some repairs. I have an older car, 12-years old with almost 150,000 miles on it. It didn’t need a tremendous amount of work done, a couple of new front tires, oil change, and an oil gasket needed to be fixed. The gasket needed to be fixed because my car was due for emissions testing.
The testing is mandated by the state and my car wouldn’t pass with the check engine light on being caused by the gasket. I was guessing that all of the repairs could run about $500 or $600 dollars.
No worries I thought, that is what the car fund is for in my savings account. I, like I’m sure many of you, have my savings broken down into various categories. Right now, I have 13 categories. That’s probably more than most people need, but I keep track of everything in a spreadsheet. It doesn’t feel complicated to me, but I have also been managing it this way for years and practice makes perfect.
So, I dropped my car off Saturday morning and they gave me a loaner car, so that I wouldn’t have to wait around. My son and I went and ran our normal Saturday errands.
Later that afternoon, I got a call about my car. The repairs were done; cost was about $690, which was in-line with my initial rough estimate. I forgot how expensive tires can be for a car. The surprise was that my car needed more than just those repairs.
The catalytic converter on my car was shot and needed to be replaced. My first thought was, “Ouch, this is gonna hurt”. The part isn’t cheap, about $1,200 and the total repair cost is going to be around $1,400. Since, I plan on keeping my car until the doors fall off, I told the repair shop to go ahead and order the part.
Still OK, No Need to Panic
As recently as five years ago, I would have been freaking out trying to figure out how I was going to pay for all the repairs, the original ones and the expensive one. I was like most Americans, living paycheck-to-paycheck with little to no savings.
A series of car repairs like these would have destroyed my budget. I would most likely have had to put the repair costs on a credit card and then figure out a way to eventually pay that card off. Today’s situation is quite different. These repairs will come out of the car fund. They will not even dent my emergency fund.
Now, don’t get me wrong, my car fund is taking a big hit. I’m going to have to work to rebuild it. I have a set amount I contribute to it monthly and will likely add additional funds to it when I come across extra cash, such as a bonus. It is not a financial disaster. The repairs will be paid in full and without collecting any interest. That’s progress.
Without getting serious about my finances and living below my means, I would have been stuck in the same cycle I was five years ago. Back then, just as I felt I was getting my head above water, something unexpected would pop up and pull me back down. I would end up back in debt, trying to figure out how I would get out of debt again. A car repair like this would have been such an event. Now, my savings account gets dinged a little, but it’s not the end of the world.
By planning for the unexpected, I’m prepared for the surprises when they show up.