It sounds so simple, if you want to build up your savings, just spend less than you earn. But while a kid can do the math on paper, even 40-year-olds can have trouble putting that basic idea into practice. If you’re trying to save up a few thousands bucks for a new car – or a used car that’s at least new to you – it helps to have a plan that keeps you disciplined and on schedule if unexpected expenses pop up.
If you’re looking to purchase a vehicle, here’s how to get your finances in order.
Decide on your monthly car payment
You must know how much you want to spend monthly on your car. Remember to choose a reasonable monthly payment that you’re certain you can afford and pay on time. Once you identify your monthly car payment then you can begin to search for vehicles that would place you in that price range. If you want a good deal on your car, check out the internet or take a look in the latest car magazine for new or pre owned cars for sale in Cape Town.
Decide when you want to buy your new car
You need to have in mind a projected date in which you would like to purchase a new vehicle. This will help you organise and manage your money to prepare for your first car as well as down payment. Once you’ve decided to purchase your vehicle within a month or three, then you can begin to plan accordingly and challenge yourself to save not only your first monthly car payment, but also your down payment.
Open a separate savings account
Now that you know what you want your monthly car payments to be and you’ve done research to identify the price range and types of cars that’ll serve you best, it’s time to open a savings account to help you do just that. Every week you should allot a specific amount of money to your new savings account. This account will be exclusively used for your first monthly car payment and your own down payment. Do not use this account for any other reason.
Stay focused on your goal
You may have to buckle down for a month and eliminate eating out or some extracurricular activities, but the sooner you reach your goal, the better. Saving up for a car can be challenging and can appear to be a hassle if you don’t start with a plan. Knowing how much you want to spend and saving for your down payment are the two steps that bring most of the challenge.
Stay focused and remember why you’re saving up for a car in the first place. Once you learn how to save up for a car, the rest will come easily.
This article has been adapted for Money101 and was taken from: https://www.studentbrands.co.za/news/student-news/save-4-car/