Took me 18 months to finally switch to a sinking fund for car repairs

My alternator died at a gas station in Spokane, the $640 tow and repair bill wiped out my whole emergency buffer, and now I put $75 a month into a separate envelope until I hit $1,500, has anyone else had better luck with a specific monthly amount?

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henry_moore5517d ago

Spokane eh, that 640 number makes my stomach drop just reading it. I got hit with a 1,100 dollar fuel pump on my old Ford in the middle of nowhere Nevada and that was two paychecks gone, so I get the sting. But here's my question, are you actually putting that 75 into a separate account that earns something, or is it just a labeled envelope at the same bank? Cause I did the envelope thing for a while and the money sat there doing nothing, and then I finally moved it to a high yield savings account and got like 20 bucks in interest, which aint much but it's something. More importantly though, what happens when the bill comes in at 1,600 bucks because you only saved 1,500, is the plan just to start over from scratch or do you keep a little extra buffer beyond that number? I always found that picking a number like 1,500 is good for the average breakdown, but the worst case scenarios always ran higher, so I started padding mine by a third just to sleep better at night.