Saving money for a car clearly isn’t all fun & games. If that wasn’t correct, folks wouldn’t have such a hard time doing it. However, there’s no need to make a boogeyman out of the process. We’ve got some ideas to back that one up. In other words, we’ll show you how to save money for a car!
With just a handful of tips, you’ll be able to save some money for a new car in no time, even with a low income. You’ll just need some patience plus some good ol’ asceticism. We’re only kidding about the latter, there won’t be a need to starve yourself or something. The whole thing’s much easier than that!
If you’re choosing not to believe us, please do so only once you read this one! So, shall we begin?
Table of Contents
- 1 #1 Sell your old vehicle
- 2 #2 Spend your money carefully (en général)
- 3 #3 Create a dedicated car account
- 4 #4 Got spare cash? Add it to your dedicated car account
- 5 #5 Set a budget
- 6 #6 Set a budget using the 50/30/20 rule
- 7 #7 Find a side hustle
- 8 #8 Save some funds on gasoline
- 9 #9 Pay off your debt
- 10 #10 Follow your progress & set milestones
- 11 Final words on the subject
#1 Sell your old vehicle
Now, of course, whether you’ll strike gold here depends on your current car’s value. That number will tell us whether selling the old car will greatly reduce the cost of the new one. However, regardless of your old car’s value, it’s still nice to have some cash to put forward for your new vehicle. It might seem like a serious investment of effort, but it’s definitely worth it!
#2 Spend your money carefully (en général)
Once you’ve embarked on the journey of buying a new car, you need to cut unnecessary spending. For all we know, that could also be your spending blueprint for tomorrow. Since we live in a downright consumerist society, folks are prone to spend more than they earn. The issue affects most of us.
Let’s try not to get all pessimistic about the chances of you saving some money for your new car. The picture’s a lot brighter. You’ll just need some inner strength to overcome all the “wants” that might appear in the meantime. The new vehicle should be your main priority, so feel free to find ways to reduce other expenses.
All in all: all we’re saying is that you should spend money with some thought. Unnecessary spending won’t make you any closer to buying a new car. Speaking of which, here’s also how you’ll save money on clothes without much hassle.
#3 Create a dedicated car account
We’ll continue from where we’ve stopped and talk about a good way to cut unnecessary spending. That’s right, you’ll want to create a dedicated car account. This will help you avoid the temptation of wasting your savings on something else. So, yeah, make a separate savings fund for your car.
Also, our suggestion is that you should “make it automatic”. What does that mean? Here’s the thing:
- It means that a certain amount from your paycheck will find its way to your dedicated car account. Automatically.
You won’t even have the tiniest chance to spend the money on something that’s not a priority.
#4 Got spare cash? Add it to your dedicated car account
We’ll be quick here. You’ll want to contribute any spare cash you might receive as a result of this or that to your vehicle account. We’re talking about a potential bonus at work, a tax refund, or even some money you got for your b-day. Regardless of the source, add it to your dedicated car account.
#5 Set a budget
Knowing what you’re actually able to afford isn’t an easy thing. Especially if you haven’t considered the numbers yet, that is. Therefore, you should go over your monthly income. Don’t forget to consider your monthly financial obligations such as rent or mortgage. Oh, and who could forget utility bills?
Also, try to figure out how much you’re spending on groceries, dining out, or regular shopping. Calculate how much space you’ve got in your budget for a vehicle payment. By doing such a thing, you’ll have no trouble figuring out how much money you should save for a down payment. Additionally, you should spend no more than 15% of your monthly income on a car payment. See if that fits your budget!
Don’t know how to make a monthly budget? If so, here’s how you’ll make a monthly budget plan!
#6 Set a budget using the 50/30/20 rule
There’s a little something called the 50/30/20 rule. Needless to say, it helps folks follow their budget plans. Here’s what’s up:
- 50 means you should allocate half of your monthly income to needs.
- 30 means you should allocate 30% of your monthly income to the so-called wants.
- 20 means you should allocate 20% to savings and debt repayment.
Now, we know that folks of today have some issues differentiating between needs and wants. Also, when you’re buying a car – is that seen as fulfilling a need or a want? Here’s how you can look at the problem:
- You NEED to get to work. Even a used car can help you with that. However, you WANT a brand-new car, even though you can easily fulfill the need with a used one.
Also, you shouldn’t forget about the ongoing costs of buying a car. For instance, you’ll have to opt for car insurance. Choose an option that will save you the most money. Consider bundling your car policy with your homeowner’s policy.
#7 Find a side hustle
Another great way to save some money for a car is to find a side hustle. There are a number of cool side jobs you can find online to top your budget. For instance, have you ever considered answering paid online surveys? If you haven’t, we’ve got a suggestion to give.
If you love voicing your opinion on a number of topics, this one’s for you. The whole thing works in a pretty simple manner. First of all, you’ll sign up on one of the online survey platforms. Next up, you’ll need to fill out your profile as much as possible to get the best surveys. Once that’s done, check your inbox for survey invitations.
You’ll get invitations based on your qualifications and interests. Once you complete a survey, you’ll get points you can transform into cash. The cash you can use to build your car savings account, for instance. All in all: find a way to earn some good ol’ side money.
#8 Save some funds on gasoline
You can also look into other methods to cut the costs of everyday life in order to save some funds. Needless to say, as a car owner, you must be spending a lot on gasoline. What if we told you there’s a way to get gasoline money for free? That’s right, simply click on that link to find everything about it!
Save money for a car by cutting down on gasoline costs. Simple as that!
#9 Pay off your debt
Do you currently have a lot of debt? If that’s so, you might want to take care of that first. That’s because such an action will significantly improve your credit score. So, what can you do to get rid of debt in no time? Here are some tips!
Deal with the most expensive loan first
Guess this might be the most obvious way to begin dealing with your debt. That’s because your most expensive loan has the highest rate. Also, once you deal it with first, you’ll decrease the overall amount of interest you pay. Therefore, you’ll greatly reduce your overall debt.
Once that’s over, deal with the loans that have the next highest interest rate. You might’ve recognized this strategy – it’s the so-called avalanche method.
Or deal with the smallest loan first
There’s also the so-called snowball method. It’s like the avalanche, just the other way around. In other words, you’ll pay for the smallest one first, paving your way toward the largest.
Keep track of your bills
You want to stay on top of your debt, right? Right. Therefore, you should keep track of your bills. Use online reminders and schedule the amounts of money you want to pay. Also, schedule just when you want to pay them.
Speaking of a schedule, here’s how to deal with a flexible working schedule!
Pay more than once a month (if possible)
Here’s the last tip: pay your credit card bills more than the necessary once per month. This will help you stay in touch with just how much you owe. Also, you’ll most probably lower your balance/utilization ratio. We’re talking about the percentage of your total available credit that’s in use at a given moment. This ratio is one of the key elements used by reporting agencies to figure out your credit score.
#10 Follow your progress & set milestones
Without a clear overview of your progress, you’re going nowhere. In other words, you won’t be able to know where you’re at. That’s why you should set certain milestones to keep you moving in the right direction. Also, they’ll help you move at the right pace. One thing leads to another, as they say.
Final words on the subject
And that, folks, is how you save money for a car! Hopefully, you’ve enjoyed this one, and it helped in the process of saving funds for your new vehicle. By following the tips we’ve shown you, we’re sure you’ll have no issues with your savings. If you’re on the lookout for more useful tips on similar subjects, visit our blog page.