Establish a Car Replacement Fund for the New Year


My father always told me that the only things in life I should borrow money for were a home, a home improvement, and my education.

Everything else should be paid for with cash.

“If you can’t afford to pay with cash, you can’t afford it,” he told me.

I think this is good advice for everyone, including family child care providers.

This means that child care providers should pay cash for their car.

Of course this is difficult for many to do. Most child care providers, like everyone else, put some money down and take out a loan to buy a car. As a result, you pay interest on your loan. Money you spend on interest could instead be used to meet other short or long-term financial goals.

Here’s a plan for how to establish a car replacement fund that will allow you to pay cash for your car.

This is the beginning of an article I’ve written for In it I describe the four steps to take to establish a car replacement fund. I’ve also included a handout with more details.

Read my full article. is a community for family child care providers and parents that offers a wide variety of resources including recipes, a blog, and a newsletter.  It serves as a clearinghouse for many online resources (children’s activities, training opportunities, equipment, and more). was created by Minute Menu (now KidKare) to offer free assistance that will help the family child care community grow.

Tom Copeland –

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money-management-smallFor more ideas about how to manage your money, see my book Family Child Care Money Management and Retirement Guide.

Categories: Money Management, Money Management & Retirement

4 replies

  1. Hi Tom, I claim mileage on taxes using Miles IQ. When I replace ties or do a repair, can I claim it on taxes? Thank you.

  2. If you claim miles you are using the standard mileage rate and can therefore not deduct tires, repairs or other car expenses except parking and car loan interest.

  3. I find so many of your articles to be unrealistic for the real world. I can’t even make my full house payment each month, but you suggest starting a car fund? I ran up so much debt trying to start my daycare that I will probably only get rid of it through bankruptcy. Maybe in a city or neighborhood where you can actually charge enough to cover care it would be possible. But when you have licensed providers willing to watch children for $3/hour or less, even making a living is out of the question.

    • It’s true that my advice about establishing a car replacement fund may not be realistic for all family child care providers. Obviously, making house payments and paying off debt are more important. I hope your financial situation improves and I wish you well.

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