Don’t Let Yourself Slip into Debt

Written by Karen Bryan

Frosty carWhen we went to our car to return back home to Berwick upon Tweed, after redeeming my two night business card prize draw at Jurys Inn Edinburgh, the car wouldn’t start. Not really a surprise; it was a frosty morning, the car had been parked for a couple of days and it was the original eight year old battery.  I was glad that we were members of the RAC, included in our Marks & Spencer Premier Car Insurance.

A replacement battery cost £83. It crossed my mind that having a bill for £83 a couple of weeks before Christmas, could lead to a spiral of debt. The chances are you’ll need your car on the road, so will have to fork out a new battery. If you don’t have enough money set aside in your budget to cover sudden expenses, you could end up going overdrawn on your current account, exceeding your credit card limit or even thinking about a short term loan. All of these options will end up costing you money in fees, charges or interest.

I have a monthly budget for running our car which includes depreciation, fuel, insurance, breakdown cover, road tax, servicing and maintenance.  You can read the details in my article “How Much Does It Cost to Run a Car“.

Of course, you don’t know exactly what will go wrong with a car, so have to estimate average costs. Some years the car costs a lot more to maintain than others, but I leave any unspent money sitting in the car budget, to cover a more expensive year. If you haven’t budgeted enough to cover a sudden expense such as as new battery, then you will have to dip into your emergency fund.

As more and more families find their living expenses rising faster than their incomes, the more chance there is of slipping on financial banana skins.  That’s why I advocate making sure that you master your money by having a realistic budget and an emergency fund to avoid falling into debt.