Clever Tips To Help You Save Money For Your Dream Car
Buying your dream car, always comes with a price and it can be quite expensive for your budget, unless you win the lottery and have millions of cash, then buying it will be a piece of cake. But to buy a dream car will mean a long-term commitment to saving tons and tons of cash, and with all the bills and the responsibilities that you will have to pay, it might take you years to save up for that dream car. But wait! – This article might change the fate as we give you tips to help you save money for your dream car.
- Calculate your own payment. Choose a target amount to spend on your car and compare prices from every dealership and a few makes and models to find out if it is realistic. Once you figure out the price range for the car that you are sure you can afford, you can then proceed to calculate your down payment. Opt to place 20% down on a new vehicle while having a 10% down on a used on a second-hand vehicle which tends to be cheap cars. If you opt for a car loan, then you must shop for financing as you would for a car since pricing and terms vary among lenders.
- Set a budget for car-related expenses. You might want to consider following a 50/30/20 wherein 50% of your income will get allocated for your needs, 30% for your wants, while 20% goes to your savings and debt repayment. Deciding whether your car purchase falls under your needs or wants can be a bit tricky, but you must bear in mind that your car payments and other ongoing payment responsibilities, such as insurance, will have to become a part of your budget.
- Limit unnecessary spending. If you are planning to spend a huge amount of money, such as for an automobile, then you must start spending your money carefully elsewhere. Your money must then get redirected to your savings towards your new car fund.
- Set up a savings account. Now that you have already figured out how much you should save and how to save it, the next vital step you have to consider is to find a safe home for your savings. Opt to open another account for the sole purpose of saving for your car rather than dipping it to your current savings account so you will not get tempted to spend it on other purposes. Pro tip: if you still have a few more years of saving for a long-term goal which is buying a car, opt to put your savings in a high-interest account or certificate of deposit so it will grow.
Hopefully, these tips gave you an idea on how to save money for your dream car in clever ways. You might also consider picking up a side hustle for more source of income. When the time comes and you have saved enough to choose a car in an auto sale — there will surely be nothing else more worthy than the feeling of rewarding yourself after working hard.