While driving on the New Jersey Turnpike last week, a rock struck my windshield leaving a small crack. I knew it was going to have to be taken care of but no more so than today when I walked out to my car and saw how the crack had somehow, magically, spread overnight. But you know what? It’s OK. Why? Because I have a car maintenance/emergency fund.

After the debacle with the free car and the thousands of dollars of maintenance that went into keeping our 1994 Honda Accord on life support, my husband came up with the idea of having a separate emergency fund just for our cars. We were both tired of our regular EF being drained for car purposes and this seemed like the perfect solution. We agreed that $1000 seemed like a good amount and we’ve been contributing $100 per month to the fund. We’re currently around $600. This would be higher but some things have come up, like routine maintenance, brake replacement, and now, the crack in my windshield. And his windshield (let’s not go there). None of this things make me break into a a sweat because the money is there to fix them. Without the help of credit or having to compromise our budget.

This wasn’t always the case. There were times that a simple oil change induced anxiety attacks and frantic budget rearranging. Not anymore! Now, we can take a step back and breathe because we know the money is there. As our cars are later models (his is a 2007, mine is 2010), the problems that come with older cars aren’t necessarily present and the money lasts a lot longer. This is a great side effect because, just like with our regular emergency fund, when money gets taken out we have to make sure it gets replaced as soon as possible.

There have been many days in my life when I’ve wished I could go car-free. I find that cars are too expensive and generally a pain the ass. Unfortunately, I live in the suburbs with poor public transportation so I have to suck it up. Having the car fund has given me a little peace of mind with regard to all the upkeep, maintenance and problems that come with a car. If only I could just find a way to get it to clean itself…

Do you have an area in your life where you’ve created a separate maintenance and/or emergency fund? How much do you routinely keep in that fund?

Today was payday in my house. Actually, it was one of the 2 “extra” paychecks we get each fiscal year. No bills get paid out of these paychecks. We use 24 out of our 26 paychecks, plus the majority of our second income, to pay bills and pay off debt. We’ve decided, together, that for these 2 “extra” paychecks, we let ourselves have a little breathing room. For these paychecks, we spend the money on the absolute necessities like gas, food, savings, and daycare but also use it to give ourselves a little bonus.

For instance, we each get a small allowance out of every paycheck ($20 every 2 weeks). From our extra paychecks, we bump that up to $100. We will usually treat ourselves to a nice dinner. We may each buy one special item and then we kind of let the rest sit. But this summer’s extra paycheck bonus is filled with all kinds of good stuff:

• $300 for our vacation (accommodations are free and food is separate. This is just for activities)
• $100 to take our daughter to see the Laurie Berkner Band (of the children’s performers, she is probably the most tolerable)
• around $300 for my plane ticket to the Financial Blogger conference
• $150 for my husband’s yearly fishing trip

I will also be using some money to buy this:



It’s nice to have some extra income every once and awhile to spend on fun stuff rather than bills and debt. While we do a pretty good job budgeting money for smaller ticket fun stuff items, buying the bigger things guilt free is a good feeling.

Do you ever use extra income to splurge? What do you like to buy?