5 Tips for Building an Aircraft Maintenance Fund

by | Aug 8, 2017 | Aircraft Ownership, Money Tips | 0 comments

Aircraft owners should be building an aircraft maintenance fund to cover both routine and emergency expenses. Here are some helpful tips to get started!

A while back, I discussed how much money you should have in your emergency fund, and why they are so important for every household.

Aircraft owners should go one step further; an “Aircraft Maintenance Fund.”

If you are a proud airplane owner, you should be contributing to an aircraft maintenance fund on a regular basis.  This is nothing fancier than a regular savings account earmarked for maintenance costs.

This fund doesn’t just have to be for emergencies, but it should be large enough to cover unexpected expenses.

Even expected maintenance such as an engine overhaul on a simple Lycoming O-320 engine you might have on your Cessna 172, can cost upwards of $20,000.  Being prepared for these types of expenses can make airplane ownership much more enjoyable.

Here are some tips on how to build a solid stash.

Aircraft Maintenance Fund Tips

Open a Separate Savings Account

You will be a lot less likely to dip into your maintenance fund if that money is harder to get to.  Setting up a separate savings account for your fund is easy, and you might even earn a little extra on the side!

I suggest looking into an online bank for your savings account as they typically have a simple application process, minimal to no fees, and usually have much better interest rates than traditional, brick and mortar banks.

I have banked with Ally, Capital One 360, and Alliant Credit Union, all of which have their own pros and cons. Here are the current interest rates for those savings accounts (as of May 2018):

You still might want to keep it simple and stay with your current bank or credit union, but try to make sure you have a separate savings account just for the maintenance fund.  You will see a clear balance and it’s harder to spend from.

Speak to Your Mechanic

Having a trusted mechanic can be an invaluable resource when it comes to taking care of your airplane.  Not only will they keep it airworthy, they can be a wealth of knowledge on your specific airplane.

Every airplane model will have its own maintenance recommendations, so it’s important you stay familiar with what routine maintenance you should expect.

Your mechanic can give you an idea on what types of costs you should plan for.  From there, you can calculate how much is appropriate for your situation.

Besides your mechanic, airplane type associations such as the Piper Owners Society can help provide resources to owners looking to become more knowledgeable on their aircraft’s cost.

Charge Yourself a Rental Fee

Have you ever heard the saying “pay yourself first?” This is a similar strategy.

Once you have an idea of how much your airplane might cost you per year based on how often you fly (i.e., 200 hours a year), calculate how much your airplane costs to operate per hour.

A good practice is to charge yourself a rental fee for each hour of flight time.  If it costs you $100 per hour and you fly 2 hours, write yourself a check for $200 and deposit it into your maintenance fund account.

This requires a little more discipline, but it’s a great way of building up a fund so you aren’t caught off guard later.

For an extra challenge, try doubling your cost per hour as your rental “fee”!

Reduce Flight Hours and Pay Off Debt

If you are still burdened by credit card, student loan, or car payments, hopefully you didn’t just add an airplane payment to the mix.  If you can’t afford to pay yourself a rental fee for the hours you spend flying, you need to think about pausing your flight time for a bit.

Debt payments can account for a few hundred to even a few thousand dollars of spending per month for many Americans.  If you carry too much debt and can’t quickly save for emergencies, you are in a risky position.

Without savings, unplanned expenses can lead to even more debt.  It’s a tough position, but I’ve been there and have gotten out, so it’s possible!

By budgeting your monthly expenses, you will get a good idea of how you can redirect your income to build up a small savings fund before attacking your debt.

Once your income starts to free up after paying off your debt, that money can start building your emergency and maintenance funds.

Share the Load

Many airplane owners will share the costs of ownership with other friends or family.  Make sure they are pulling their weight.

Just like charging yourself a rental fee, you might try asking all the owners to make regular, monthly contributions to a maintenance fund.  This can ensure no one owner has to face an unexpected cost.

These partnerships can become complicated, so to make sure everyone is protected properly, I would recommend you talk to an attorney and/or a CPA who is familiar with various aircraft ownership scenarios.

Final Thoughts

Aircraft ownership can be a source of pride for many pilots, but the costs involved can cause a lot of heartburn.

I don’t think anyone actually enjoys spending thousands of dollars on maintenance, but the pain can be lessened by being prepared.

Spending $20,000 on an engine overhaul from your dedicated maintenance fund should feel a lot better than going into $20,000 of debt or pulling money out of a retirement or college saving fund to cover the cost.

 Have you been burned on maintenance costs? Has an emergency fund saved your butt?  Let me know in the comments below!

About the Author

After graduating from Purdue University in 2009 with a pilot’s license and a degree in Aviation, Dan Kellermeyer had over $100,000 in student loans and faced a virtually non-existent job market for new pilots. Today, Dan is free of consumer debt and is passionate about helping others finding the best way out of debt and planning for the future.



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