Many people have realized that it takes a lot of time in saving for a car. Even if you have already saved a lot of money, you fall short of cash for a down payment at the time of buying your car.
Saving 10% of the value of your car is not as easy as it seems. You start saving based on the estimated price of the car you want to buy, but by the time you successfully manage to do it, the prices are gone up.
Although it is not as tough as arranging a mortgage deposit, it is not easy either. At one point in your life, you all decide to buy a car, and then you start saving money for it, but it seems like you need to put your back into it to have saved enough money at the time of buying your car.
Ways to save money for your car with ease
While you need money for your day-to-day expenses and set aside for emergency cushion, you need to be creative with money-saving methods for your car. Here are a couple of suggestions you can use. You can use all or a combination of them depending on your financial condition.
Set your car budget
Here the car budget means the amount you need as a down payment for your new car. When you decide on the type of car, research the market value to know how much money you will need.
The car prices may have gone up out of inflation by the time you buy it, which means you should have additional room in your budget to save for your car. The best approach is to find out what amounts to 15% of the value of the car.
If you save 15% of the current value of the car, you will be able to cover the raised cost. Now identify how many times you have to save for your car. According to a ground-rule of thumb, you need at least two years to do it. However, it can go up to three years, depending on your income.
Once you identify the time frame, you should spread the cost over that to get to know how much you need to stash away per month.
Stick to your saving plan
Making a plan is easy, but the execution is always difficult. Complications arise when you do not stick to your goals. The sluggish contribution will put it off, and your dream of buying the car will never come true.
When you have ups and downs, make sure that you adjust your saving plan accordingly. For instance, if you have lost your job, you will dip into an emergency cushion for your daily expenses, and you may have to take out instant doorstep loans.
At this moment, you may not be able to set aside your car’s down payment, but at the same time, make sure that you do not slip into these funds for your regular expenses.
As you land a new job, you should pace up your contribution to catch on the gap during unemployment.
Link your car savings account to your payment account so you can free yourself from transferring money every month. The auto debit mode can help you stick to your goal.
Use an app
You cannot overlook other expenses just because your priority is to arrange money for your car’s down payment. Of course, if you fail to keep up with your regular expenses, it will have an impact on your car saving goal.
This is why it is recommended to track your regular expenses. Manual budgeting can be tricky. Therefore you should use a budgeting app. These apps can help you track your regular expenses to ensure that you are not overspending.
All you need to do is set your spending limit to not compromise with your emergency cushion. The app will immediately notify you if you are very close to your spending limit. Since you have to manage your regular expenses along with car saving goals, you may have to be strict with your spending.
It is recommended to maintain a lean budget until you have come to fruition with your saving plan. This budget will allow for only essential expenses. You will have to cut back on discretionary expenses like dining out completely.
No matter how much money you earn, it can be challenging to set aside your car’s down payment. Financial ups and downs can take a toll on your mental and physical health. It can all of a sudden become all but impossible, but you do not have to give up in the middle.
Try to stay strong and be patient. You likely fall off the track, but try not to make the same mistake over and over.
The final word
It is not extremely easy to save for your car, but you can ease off the burden with the tips mentioned above. Try to make a saving plan and stick to it. You can come across some financial ups and downs but do not give up. Be persistent.
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