Saving to purchase your first car can be a difficult task to achieve. Saving tens of thousands of dollars is not easy at all. Follow these steps and you’ll be on your way to saving for your first set of wheels.
Set a Goal
First, you’ll need to set your goal. Do you want to buy a new or used car? Or do you want to finance or purchase your car? When financing a new car, you’ll need to put at least 20% down. Also, when purchasing a new car you’ll need to handle dealership fees, taxes, and even delivery fees.
There is nothing wrong with purchasing a used car. It will still be new-to-you. Check on Kelley Blue Book to see how much the car you have your eye on should be sold for.
Determine Your Budget
Figure out if you can afford monthly payments. Did you know that you can also finance used cars as well? When determining your budget, don’t forget to budget expenses for maintenance, gas, and insurance. Use calculators to determine how much you actually need to purchase your dream car.
Starting early will be the first step in your savings plan. Don’t buy a car before you can’t actually afford it. Determine if it’s a long-term savings plan or short term. Take in consideration that car prices do rise, about $500 each year. If you are creating a savings plan to purchase a car in the next two years, be sure to add an additional $1,000 to your savings needs. Don’t forget to include wiggle room in your savings plan as well. Your savings plan has everything to do with your spending habits. Instead of going out on the weekend, try staying in and save the money you would’ve spent that night.
Everyone struggles with saving money, it’s not an easy thing to do. By following these steps, the process of saving for a car will get easier to save!