Did you ever wonder how to save money for a car? This article will guide you through 4 simple and practical steps that will enable you to save money to buy your dream car.
4 Top Strategies on How to Save Money for a car
1. Setting a budget is the key
It is very important to calculate your budget if you are willing to buy a new car. Analyze your current income with your expenses and liabilities; understand and calculate how much room you have in your monthly budget that you can put into savings accounts. Once you know your monthly savings budget, you can determine the amount of money you require for the down payment. Once you get to know your budget, you have to expand it by increasing income and reducing expenses.
2. Fewer expenses = More savings
We often spend more than what we need which lessens our savings. Make a list of all the fixed and variable expenses that are incurred in a month. Differentiate your needs from your wants. Follow a budget control policy to reduce the spending on your wants as much as possible. Don’t spend any money to showoff the others. To achieve your goal of buying a car, make an effective spending plan, and challenge yourself by setting your spending budget around your needs. This in the short-term may cause sacrifice of cravings, but in the long-term, it’ll pay you a great reward as a result of goal accomplishment.
3. Side hustle is the way to move forward
Still thinking on how to save money for a car? Try side hustle. You can always save more if you earn more. When you earn more money, you are in a better position of achieving your financial goals. Limited wage or salary of 9-5 job is just not enough in modern times. If you are really passionate about your ambition with an iron will and sheer determination, pick up a side hustle and start going the extra mile.
Now where to start from? The opportunities of side hustle are now greater than ever. There are hundreds of freelance market places that exist today. You can join any freelance market place for free, and you can have the opportunity of increasing your income significantly.
4. A realistic timeline for down payment
The down payment is the first step in process of buying a car. This is the amount of money that you pay upfront while purchasing a car. This is the first milestone that you have to achieve and to achieve it successfully, you need to set a realistic timeline. It is also very important to remember that the more you pay upfront, the less money and interest you have to pay overtime. This requires an effective calculation for the down payment.
Seeking a practical example on how to save money for a car? Let me give an example to elaborate it further. You wish to buy a car that costs $20,000. The rule for a down payment is to save at least 20% of the total cost. 20% of $20,000 is $4,000. You are thus required to save a minimum of $4,000 for the down payment. After calculation, it is super important to decide when do you aim to buy the car. This decision shall base on the status of your current income and saving capacity. If you can save up to $400 a month, you can become able to make a down payment in 10 months. If you can save $200, you can make a down payment in 20 months, and so on. Always try to make a down payment as high as possible, it will help you a lot in the future.
Apply these proven tools and techniques to buy your dream new car!
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