How to Save Money for Your First Car
Buying your first car can be a very exciting experience. You are finally going to be independent and not have to rely on other people for rides. Buying a car is a bit of a challenge. Cars are not cheap by any means and people often have to save up for a long time to have enough money to afford a car. These are some tips on how to save money for your first car so you can be on the road in no time.
Set up a Goal
Come up with a number that you are willing to spend on the car. This number should be realistic since you are going to need a car that is reliable and safe. You also need to include the cost of tax, licensing, and registration for the car. If you are looking to purchase a car from a dealership you will need to put down 20 percent of the total price of the car as a down payment. If you are a young driver keep in mind you are going to need a co signer. Having a savings goal will help to keep you motivated and will help make sure that you are putting money aside for your purchase.
Take on Extra Work
In order to have money to put aside for the car you are going to have to work. Sometimes one job alone does not seem to generate enough money to cover expenses and for savings. In addition to working look for some freelance opportunities. Tutoring, website design, and writing services will allow you to make some extra income that can go towards the price of your car. These hours tend to be flexible and there is plenty of work. If you have a special skills or ability such as artistic abilities you can also sell your services online. People will pay good money for custom pictures and drawings.
Set a Budget
If you are like most people it seems that as soon as you get money it is gone. You are left wondering where did all of your money go. It is important to develop a budget so you can keep track of your spending habits. You can see where you are spending the most money and make adjustments. Instead of buying shirt for $50, you can get a nice one for $20 and put the rest of the money in a savings account. Instead of purchasing a fancy coffee every day, make coffee at home. At the end of the week put the difference in the bank. Before making a purchase especially a larger purchase think if you really need the item. Instead of making the purchase put the money in the bank and it can be used towards the cost of your first car. A budget will also help you reduce your impulse spending. If you think before making a purchase there is a good chance you will find that money is better used towards the price of your first car.
Get a High Interest Bank Account
When you open a savings account you may be disappointed with the interest rate you are getting for using the bank. It seems that interest rates have dropped to less than a percent on the total money in the bank account. Before putting money into a low interest savings account check out different banks and see which one offers the highest interest rates. Check out internet banks as well. These banks often offer a higher percentage rate on your money than traditional brick and mortar banks. You may also want to check out credit unions. If you are not a member of a credit union but know someone who is go with them and see if you are able to open an account. If it is going to take you an extended period of time to save the money that you need, you may want to consider opening a CD. This account offers a much higher interest rate than a savings account. You will have to keep your money in the CD for a specific period of time such as two years. If you withdraw the money early there will be a fee. This will depend on how soon you think you will have the money for your car.
According to car care ninja, when looking for your first car it is important to have something that is safe on the road. The car should be reliable and in good condition. As long as the car is safe you do not need to worry about the extra features. You are not going to need heated leather seats, fancy accessories, or other added features. While they may improve the appearance of the car they are going to cost extra money. When looking for your first car stick to the basic features. The car will cost less and you will be able to save up for it in a short period of time.
Get an App
It seems like you can do just about everything with your smartphones. There are a number of apps to help make life easier. There are even apps that can help you save money and keep track of your savings. The apps can show you how many weeks you will need to save to help meet your goals. They will also track your spending so you can save money. These apps are free to use. You can see your money growing and track how close you are to reaching your goal when saving for your first car. In addition to using these savings check out online banking as well. This way you will know how much money is in your account at any time.
These are some tips to help you save money to purchase your first car. A car is an expensive purchase and you are not going to have all that you need overnight. These tips will help you change your spending habits so you can build up enough money to purchase your first car.