The other day I was chatting with a friend who was in a panic regarding not having enough money for the new tires that they needed for their car. It got me thinking about the challenges we all face regarding irregular or periodic expenses. It can be a little overwhelming to try to figure out how much money you should be setting aside for things such as auto or home maintenance. While working with Money4Life Coaching Members I generally try to walk them through the standard expenses that everyone can expect. Let’s use Auto Maintenance as an example.
First, we have oil changes. On average you will typically need 4 oil changes per year, depending on your mileage and driving habits of course. The cost of an oil change can vary depending on your city/state, type of car, and your your mechanic. Let’s use a rough estimate of $50 per oil change. That would mean $200 per year, or $16.66 per month.
Second, we have miscellaneous things like windshield washer blades, windshield washer fluid, light bulbs, oil, perhaps a car wash here and there. Let’s assume $50 a year for these types of expenses and supplies. You could also look at this as $4.16 per month.
Tires would be another expense that in most cases you can plan ahead for. People replace their tires every 3 to 5 years typically, again depending on their driving habits, mileage, etc. Tires can vary a great deal in price, but for this example let’s use a rough estimate of $100 per tire. Let’s assume we replaced our tires 2 years ago and we want to get new tires in about 2 years. Four tires would cost $400 and if we had 2 years to set that money aside, we would want to set aside $16.66 per month, for 24 months.
With just these minimum typical expenses, we have easily come up with a budget of $37.48 per month for Auto Expenses, or $450 per year for the next 2 years.
You would of course also want to take into account the age of your car, and the mileage. For example, there are manufacturer recommendations for certain services to be performed at 50,000 miles, 100,000 miles, etc. Your mechanic should be able to provide you with a list of those services and their cost.
The same type of exercise can be done for home maintenance, holiday expenses, etc. As you use Mvelopes you will become more aware of where exactly your money is going and you will find it easier to estimate these types of expenses.
-Jennifer Hickman, Director, Money4Life Coaching