Purchasing your own car is a big milestone for anyone. If you already planning to buy one now, you must start saving for it, for the car down payment at least.
To keep you disciplined in saving, follow these steps that can aid you in saving for your dream car.
Calculate how much down payment you need
To be able to know how much you’ll be saving, calculate the down payment needed for your desired car.
For a brand new car, aim at least 20% of the total price of the vehicle. On the other hand, target 10% if you will buy used vehicles. If you can save more than this, the better. Remember, the more money you cancome up, the better deal you can get. You can be qualified for an auto loan as well.
Decide when do you need the car
Once you figured out how much you will be needing, decide when do you need the car.
Create a timeline for your goal. Doing this will let you see how much you need to save in the coming months to hit the desired amount of your down payment. Be realistic when creating a timeline. Consider how much you take home and the percentage you can allot for the car savings without comprising your monthly budget.
Remember, the sooner you need it, the faster you have to save to get your desired car.
Once you have identify how much you need and when you will be needing it, it’s time to start saving!
Determine how much you will be getting from your budget. You can use the 50-30-20 budget. 50% of the incomes goes to needs, 30% goes to wants, and 20% goes to savings.
Keep in mind that the down payment will be a part of your monthly budget until you get the vehicle. Once you purchased the car, this will be replaced by car maintenance expenses and insurance premium when you purchase a standard car insurance policy.
Set up a savings account
The next step is to create a separate savings account for your down payment. This way, you are not tempted to get money from your car savings.
You can link your savings account from your payroll account so you can automate the fund transfer once you have your income already. Doing this will refrain from forgetting to save a part of your money.
Limit unnecessary spending
Since you are saving for a big purchase, limit unnecessary spending and stick with your budget.
Avoid having lunch or dinner outside and buying expensive coffee at your favorite cafe. Instead, make a meal plan and cook your own food. Redirect the money towards your savings.
Have a side hustle
To add to your car savings, consider having a side hustle. A part-time is a good way to speed up your savings.
There are various online jobs available in the Internet. Just make sure that it’s legit andyour extra time permits before you commit.