Monday, October 1, 2007
$500 Per Month?
You can own an airplane on a budget
Contingencies, Taxes & Miscellaneous
As careful as we are, things break between annuals. It’s often cheaper to fix things as they come up, rather than to let them go and become bigger, more expensive problems. Tires go flat, cylinders lose compression, oil leaks pop up out of nowhere, and transponders and altimeters go on the fritz. If we’re really trying to do this right, with the most budgetary honesty and fewest fiscal surprises, we should budget about another $100 per month for “contingencies.” Put this money aside, literally, in your cookie jar or flight bag. That way, when something does break, hopefully you’ve got the green tucked away to pay for the repair so you can keep flying without worry or interruption.
Please note, as a matter of practicality, these numbers represent reasonably good estimates of actual airplane ownership costs, but they’re not meant to be all-inclusive or the last word on the subject. I also recommend that you become familiar with the various vendors for new and used parts, so that you can shop around as a wise consumer. Prices can vary considerably, from the big-name shops and suppliers to the salvage houses and mail-order vendors out of Trade-A-Plane or Plane & Pilot. Never sacrifice quality for price when it comes to aviation, just be an educated consumer.
Another possibility is swapping out some of your services and talents for tiedown, maintenance or even a fuel discount with your FBO. One of my clients is a well-respected attorney who handles all of his mechanic’s minor legal problems in exchange for free annual inspections and tiedown on his Mooney. Another client of mine is a CPA who volunteers basic accounting work to swap out for a discounted avgas price for his 172. Another client owns a great hamburger joint and his airplane guy never picks up a restaurant tab. Be creative and generous with your talents and see if it can truly help your FBO or mechanic, and everybody wins.
We haven’t addressed the cost of gasoline or engine reserves. These are the largest variable expenses because, technically, you incur these costs only when you fly, so they’re somewhat more easily budgeted or controlled. Gas expense is obvious. Engine reserves mean that you should sock away so much per hour, for every hour you fly, toward your engine overhaul, so that when your engine reaches TBO, the money is available for a new engine. It’s not mandatory or required, just helpful budgeting. Avgas is a huge variable expense that depends on location, time of the year and your schedule. If you’re super-busy, you’re not flying and not buying gas. If it’s too cold, too hot, too rainy or IFR, you’re not flying and spending money. There are so many variables to this element that we have left it for another discussion.
How are we doing? Pretty good I’d say. The calculator shows $465 per month for payment, insurance, maintenance and contingencies. We wisely have $35 per month for “other” items or a further reserve.
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