Budgeting for a car can be a bit of an overwhelming task, but if done correctly, it can help you save money, and you’ll be able to pay for your car over time. In fact, with the recent economic downturn, many people are trying to come up with different ways to save money. According to the American saving statistics of 2020, the personal saving rate was at 33.7 percent. So if you want to buy a car, you need to be prepared and ensure you have enough money saved. Here are some helpful tips to help you save and pay for your car.
Put money into a savings account
Start saving up for your next car by putting money into a savings account. You can even earn a little interest in your savings, and the amount depends on which bank you choose and what type of savings account you get. Plan on having enough for the down payment and at least six months’ worth of monthly payments before heading to a car dealership. Paying just the down payment, in some cases, can be even more beneficial than purchasing the car outright. It will allow you to save up for insurance, repairs, and maintenance items that are associated with your vehicle, as well as give you time to decide if you actually want this particular car make or model.
Cut back on spending
Make a commitment to change your daily spending habits. Try to save at least $30 from your expenses each week in order to make a monthly car payment. If you can save $50 or more, then even better! Going “all in” and cutting back on all expenses, except for the amount that goes towards the car payment, will result in you saving enough money in a short period of time. However, you shouldn’t cut out other important expenses, such as your mortgage payment or groceries. You could end up beginning to fall behind on those obligations, causing you to fall into debt.
Think of ways to supplement your current income
You may need to work extra hours at your job, take on a second job, or consider selling something you own in order to afford a car. It doesn’t have to be too time consuming, nor does it have to be too complicated. Having a side job is the easiest way to earn extra cash, so be on the lookout for dog sitting jobs in your area, or go online and see what types of side hustles you can do during your free time. Selling pre-loved items is an even better way to get the funds that you need for your ride. It may be hard to part with certain items, but look on the bright side you will have your new car!
Budgeting for your new car can be challenging, but with a little time and effort, it can be very rewarding. You just have to make sure that you are always saving and spending only as much as you can. Also, consider looking into some car loans or car title loans to help you pay off your debts and cover your car payments.
