Now that you’re committed to owning this plane, you need to prepare to fund its care and operation. Even if you didn’t form an LLC to hold the plane, you should still treat it as a separate entity. That means a separate account to hold the plane’s maintenance reserve, and separate books to track the plane’s expenses. Here are some concrete steps I recommend taking:

• Open an account just for plane expenses. The most conservative choice is an FDIC-insured savings account. However, depending on your risk appetite you might prefer a brokerage account. If your engine is close to overhaul this account will hold more than $20,000. Given that a conservative portfolio should yield 1-2% more than a savings account and that money might be sitting tight for years, it’s worth considering.
• Immediately transfer enough money into the account to cover the time since the last engine’s overhaul, plus any expected upcoming expenses. For example, suppose you buy a non-ADS-B-compliant 172 in 2018 with ⁶⁰⁰⁄₂₀₀₀ hours since overhaul. The engine will be about $20,000 to overhaul, so you need to transfer $6,000 into the maintenance account. You know the transponder will need to be upgraded in a year, so that’s another $2,000. This means that before you even take possession your maintenance account should have at least $8,000 in it. Do not touch this money; it’s effectively already spent.
• Enroll in Shell AeroClass Rewards. You’ll earn a tiny refund at participating FBOs. It’s very small, but free money is free money.
• Create a spreadsheet to track your flights and expenses. This will make it easy to calculate how much should be in your reserve account, and whether your actual expenses line up with your projections.
• If you have a significant other, go over all the financial information again. Owning a plane is a large upfront and ongoing cost, and just like buying a house or car it should be thoroughly understood by all the family’s financial stakeholders.
• Schedule quarterly financial reviews. You should definitely update the plane’s books and transfer money into the maintenance account after each flight. However, every 3 months you should take the time to do a more careful review. Compare your actual expenditures to your expectations. If they match up, hooray! If your expenses are exceeding your projections, honestly assess the situation and consider your overall financial situation. If you miscalculated and can’t afford the plane, there is no shame in selling it and getting something more modest. There is, however, considerable shame in denying the problem until you’re deferring critical maintenance or risking major financial problems.