Sunday, February 11, 2007

Borrowing from the Economides to Fix My Used Car

Due to assorted repairs, our used minivan has recently put a $1,000 dint into our emergency fund. To save money, we'll eventually have to replace our car. But until then, I plan to tap into the car advice provided by The Economides, "America's Cheapest Family."

I read a money-saving column featuring the Economides in Bottom Line/Personal (www.bottomlineSecrets.com. The article featured great tips, but the car advice really hit home.

Here's the Economides Car strategy:

1. I should estimate our yearly car expenses: gas & maintenance.
2. Divide that expense into per-paycheck allotments. (A monthly figure would work best for me).
3. Set aside that fixed amount for car maintenance with each paycheck. (bi-weekly or monthly).
4. If I don't use the car fund during one month or paycheck period, rollover that amount --untouched!!!--until the next month. This accumulation of car maintenance funds will provide a cushion for inevitable repairs.

"This way it's never a financial strain when the car needs needs new brakes --we have the money saved to cover it." --The Economides as quoted in Bottom Line/Personal.


The Economides publish The HomeEconomiser Newsletter (www.homeeconomiser.com) and have recently publish a new book: America's Cheapest Family Gets You Right on the Money. (Random House)

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1 comment:

Tim said...

One thing to add to the car savings budget line. It should also include the amount of your deductible. If you didn't do it already, then you should also add your insurance premium into the auto budget line.

the emergency fund should be for your normal expenses in case of income disruptions. For emergencies like cars, house repair, medical, kids, etc, you should have seperate emergency fund lines for those. same thing, keep them untouched.