My Car – A Love Story

My car recently passed 100,000 miles. Currently it is sitting at 100,225. Exciting, huh?

I get my oil changed every 5,000 miles. Why? Because that is what the owners manual recommends. So I go every 5,000. I don’t see any point in going every 3,000 if it isn’t recommended for my car.

It had been 5,000 miles and I needed to go – so I went. I also had noticed that my brakes had been squeaking the past few weeks, so I asked them to check that too.

As you can imagine, my brakes needed to be replaced, they actually are 95% worn – so they DEFINITELY need to be replaced. So that will cost me around $226 dollars – I have a $25 off coupon – so now I’m down to $201.

They also found that my thermostat is leaking. The mechanic said that this is a common problem with my type of car, and sure enough an internet search revealed that it is VERY common for my car. However, from the reviews I’ve read it tends to happen between 50-75,000 miles – so I considered myself very lucky that I got so far without having to replace my thermostat casing.

So I’m coughing up the $270(ish) to pay for this as well.

All told I’ll need a little less than $500 for everything.

And thus the question is posed: How to pay for it?!

I include $180 in my yearly fund for car repairs. However, I currently only have available to me $40 in my yearly savings because I paid for my ACS registration last month and Christmas this month with it. The working premise of my yearly savings is that I won’t have to pay for more than two “events” that I’m saving for in a given month. Oh well, no budget is perfect.

Here is the tentative plan:

Step 1: Put it on my Firestone card – I get a 5% discount for putting the balance on the Firestone card (don’t worry, there are more steps!)

Step 2: Pay off Firestone card with $40 from Yearly Fund and the remainder from my Emergency Fund before any interest collects on it – I’m talking about putting the money on the card the same day I get the total, so don’t fret – no more debt here!

Step 3: Replenish emergency fund with the remaining $140 I’ve budgeted for car expenses on January 1st

Step 4: Replenish rest of emergency fund with extra money I will get from substitute teaching this month – I picked up 4 hours last week and I have another 4 hours scheduled for this coming week. That will give me a total of $200 extra outside of my budgeted money. I’ll get this money in my December 31st paycheck from the community college.

Step 5: This is where I’m unclear as to what to do. All of the above measure will pay for $380 out of my $500 bill. So I have two options:

  1. Lower my debt repayment in Janaury by $120 to immediately replenish my E-fund to $1,200
  2. Keep my E-fund contribution at “normal” levels knowing that in will only take 2-3 months to get back up to $1,200 (I was planning on lowering my E-fund contributions in 2010 to help pay off my debt quicker)

So which option would you recommend? (I know what I’m leaning towards, but I’d love to see if the “general” personal finance community agrees with my hunch…)

P.S. – I’ve changed my blog format, so if you read this through an RSS I’d love for you to pop on over to the site and give me your comments, critiques and suggestions about the ‘new do’ !

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19 Responses to My Car – A Love Story

  1. TeacHer says:

    Oh, cars. Such a source of frustration, such a money-suck. My car is currently at about 65,000 miles, but I know I’m going to need a brake job, new tires, and a new exhaust system in the next year. Sigh.

    If I were you, I’d pick #2. You’ve mentioned before that your job is secure, so I think, as long as you can build your savings back up in a few months, you’re better off keeping on keeping on with the debt payoff.

    • SS4BC says:

      They are a money-suck indeed. And as far as I can tell, no matter how much you “budget” for repairs – the repairs always seem be be about $2-300 more than that – do you think they plan it that way? 😉

  2. Mine is at 190,000km. I hope it lasts another 190,000!! That’s about 118,000mi (I had to do the conversions) I love my car. We have a bit of a love story as well.

    For your situation I would go with option 2 as well. Keep that debt repayment going, that E-fund will replenish itself soon enough. You have a secure job, to me that makes the most sense.

  3. SP says:

    I vote for 2, though either option is fine. My car is just about to 100k as well!

  4. I’d go for #2. Then, once you’ve got your EF where you want it, I’d look at putting a but more into your car fund. Once you’ve passed the 100K point, you’re probably looking at more repairs and maintenance than in the past. (For instance, it’s recommended that the timing belt on my car be changed at 120K, and my mechanic estimates that it’s ~ an $800 job. Even though I’m only at 106K now, I need to begin saving for this if I don’t want to take it our of my EF.)

    What I do, actually, is have an EF and an overflow fund. On the months I don’t spend as much as I have budgeted, I sweep that money into my overflow fund. Then, on the months where a little thing like car registration pushes my over my budget, I can take from there. Sure, I could put it directly toward debt, but this way I save my EF for true emergencies, and I’m not tempted to raid it for “emergencies” like not having a new dress for a party or something. But you’ve got more willpower than me, so you probably never have any “emergencies” like that:)

    • SS4BC says:

      Haha you’re right – I rarely get struck with new dress emergencies! However, I do get car emergencies, and it is good to k now about the timing belt! Guess I better up my savings there… *sigh*

  5. TMcImmy says:

    I’d say car repairs are part of what your E-Fund is for.

    I also vote option 2.

  6. I agree with The Lost Goat. I vote for Option 2 and after it’s replenished, I’d start a car maintenace fund.

    • SS4BC says:

      Well technically I HAVE a car emergency fund – it just is only $180/year. =)

      I can only stretch my budget so far – and decided when I made my E-fund that it would also go to cover car “emergencies”. When I get out of debt I’ll set myself up a proper car fund, but until then the E-fund will have to cover the cost.

  7. I’m going to be excited when my car passes 100K, but since I’ve only been putting on ~8,000 miles per year, I think it’s going to take a while!

    I vote for option #2. You dipped into your E-fund for a car repair emergency, and the sole point of the E-fund is to not going into debt over emergencies. Pulling money away from debt repayment to pay this bill (or repay the EF) is only a bit better than getting into more debt to make the repair.

    • SS4BC says:

      Huh… only a bit better? That is a very interesting perspective!

      • Haha, I was trying to not be harsh (because it was a good question!). From a purely mathematical standpoint, not adding that $120 to your debt repayment is almost as bad as putting $120 onto the credit card. It IS better, but compared to putting the money into a savings account (1% interest), you’re saving huge% on interest cost for however long you have the loan.

        I’m not sure if I made it any clearer or if I have only opened my mouth again to stick the other foot in there.

      • SS4BC says:

        Ahhh I get it!

        Thanks for the more thorough explanation! You’re right, the cost of the loss of interest on the savings account is nothing compared to the interest on the debt during the same time. =)

  8. Revanche says:

    @paranoidasteroid: I’m sorry, but your comment made me laugh and think, “Room for two?”

    I get your interpretation, though. We don’t always weigh the behavioral v mathematical options quite in that way.

  9. Pingback: December Summary «

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