According to experts at Texas A&M University, the best way to create a budget is to base it on past spending habits. This means that when you are building car maintenance expenses into your budget, the best and most accurate way to do it is to base the amounts you use on similar expenses in the past. This helps to ensure that your budget is adequate for your needs.
Collect all of your car maintenance records for the last 12 months. Depending on how you pay for things, this can include your checkbook register, maintenance receipts or credit card statements. Maintenance includes repairs, oil changes, tires and other necessary work but does not include car payments or insurance.
Add all of the maintenance costs together to get the total amount you spent on maintenance over the last year. Divide by 12 to get your average monthly car maintenance expense. For example, if you spent $900 in the preceding 12 months, you should budget at least $75 a month for car maintenance.
Adjust your budget to take your car’s current condition into account. If you have an older car that is likely to need significant repairs in the coming year, increase your budgeted amount, since an older car is likely to need more work than a newer one. This means that if you spent $75 per month last year, consider budgeting as much as $125 a month for the coming year so that you don’t get caught short. On the other hand, if you spent a significant amount in the past 12 months and think your expenses will be less in the coming year, you can budget less. For example, if you replaced the engine or transmission, your costs might average out to $250 a month or more, but you probably don’t need to budget that much for the coming year. Experts recommend that you set aside at least $100 per month for car maintenance, and then adjust that to reflect the actual condition of your car.
Separate your car maintenance funds from your other money and only use this cash for the specified purpose. Typically, you should keep car maintenance funds in a savings account until you need them. It is important to add the budgeted amount every month, so that when your car needs maintenance you have the money available.
- If you are paid every week and want to know how much to budget on a weekly basis, divide the annual total by 52 instead of 12. Set that amount aside from each paycheck to ensure that you have an adequate car maintenance fund available when you need it.
- Don’t borrow from your car maintenance fund. Stick to your budget and set aside that amount each month to make sure your maintenance costs are covered.
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