list of considerations for creating an auto fund in your budget

February is about finances at ListPlanIt.com.  Managing your family or business finances is very important part of planning.  There are no “fix it and forget it” solutions when it comes to staying on top of your money.  And while it may seem like there is not enough to go around, it is important to look hard at your actual expenses and the amount of money you actually spend.  It may take some creative maneuvering to keep you in the black, but it will be worth it when you see your money grow in your bank account.  You’ll feel more ready for the expected AND unexpected after just a few paychecks.

Today, we’re starting with a big one. . .auto expenses.  The goal here is to calculate how much to add to your auto fund each and every paycheck so you are prepared for both the daily and less frequent expenses you might experience with your auto(s).   Simply add together the totals of what you may spend in a year, then divide by one of the following:  52 if you are paid weekly, 26 if you are paid every 2 weeks, 24 if you are paid twice a month, or 12 if you are paid monthly.   Members to ListPlanIt can use our Auto Fund Worksheet (see our new video tutorial on Auto Fund Worksheet) to help calculate the amount you will need for your auto fund in Financial Planning.

list of considerations for creating an auto fund in your budget | ListPlanIt.com

  • Payments – Whether you are paying on the loan of your current automobile or setting money aside each paycheck to pay for your next vehicle, payments make up a good portion of this fund.  The budget for Payments is usually anywhere from $200 to $400 per vehicle per month.
  • Insurance – Depending on the age of the driver, your location, and the type of coverage, insurance can vary wildly  from budget to budget.  Some insurance carriers offer discounts to those who can pay up front for 6 to 12 months of insurance.  If that is the case for you, then consider paying your fund for the upcoming insurance payment and save money.
  • License/Registration – While this may not be a huge amount when you consider that you only pay once per year, it can still be a burden to someone who is unprepared for the costs.  Just by adding $5 or so to your auto fund every paycheck, you’ll be ready when it is time to renew.
  • Taxes – This expense completely depends upon your vehicle and the state you live in.  Consider the amount that you’ve paid in the past.  Or if you’ve just moved to your state, you may need to do a little research to know how much you will need to put into your auto fund for taxes each paycheck.
  • Maintenance – Oil changes, car washes, and tune-ups are all important for maintaining the health of your vehicle.  You want your car or truck to last for as long as possible.  To figure out how much it might cost for yearly maintenance, take a look through your bank statements and add up all of the maintenance costs for last year.  That should give you an idea of about how much you will need for this year’s budget.
  • Repairs – With all of the wear and tear on vehicles, they are bound to breakdown now and again.  Car repairs can put you in the hole fast.  And even with insurance, a car accident can end up costing a lot of money through deductibles and such.
  • Gas – As gas prices fluctuate, you can never be quite certain of the cost of gas.  Some pay periods may see heavy driving and others may find you staying close to home more often.  If you put the same amount in your auto fund for gas each paycheck, then the lean driving week will feed the heavy driving weeks and the heavy driving weeks won’t break the bank.

How do you prepare for ongoing and upcoming auto expenses?

ListPlanIt.com has everything you need to not only track what you spend, but budget your money so you are prepared for future purchases and expenses with registers, budgets, and worksheets in Financial Planning and in ListPlanIt’s Finance ePlanner.

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