Did you know that there are more than 37 million low-income households in the United States alone? If you don’t make a lot of money, saving money for a car can seem like an impossible task. However, if you have patience and a bit of ambition, you’ll find that you’ll be able to learn how to save up for a car in no time.
The trick is to figure out car budgeting. If you don’t have a significant income, you’ll have to find ways to cut costs in other parts of your life so, after a bit of time, you’ll have enough money to finally buy a car. Keep reading and learn more about how to do this as efficiently as possible.
Limit Your Unnecessary Spending
Many people don’t realize how much money they’re spending on unnecessary items and services. If you really want to buy a car, you’ll need to separate your wants from your needs. Needs are things that you cannot live without.
For example, you need to pay your rent; otherwise, you won’t have a roof to sleep under. You need to buy food. On the other hand, you don’t need to spend money to go to the movie theater, and you don’t need to spend money on a weekly manicure.
While you might really want to go to the movie theater or get a manicure, these things are not necessary, and you could save a lot of money by avoiding them. You might think that small costs like this would put any kind of dent in your budget, but you would be wrong. Small costs have the bad habit of piling up when you least expect them.
At a certain point, you will wonder why your budget isn’t as large as you thought it would be. The reason is that you’ve been spending money here and there on wants instead of needs. If you keep spending money in this way, you’ll never be able to save up for a car because you’re spending your money on other things.
The Details
To fix this problem, you’re going to have to be much stricter with how you use your money. You might be tempted to buy things that you want, such as some new headphones or a nice dessert, but by saving your money, you will find that your savings will pile up much faster than you thought.
Doing this can be difficult at first because it requires quite a bit of self-control. However, you’ll find that once you get into the habit of not buying things that you want, it will become like second nature for you. The trick is to not break down and start buying things that you want just as you’re savings are finally starting to come together.
This will require plenty of patience, but you will find that if you’re able to wait for your savings to pile up, the result will be worth it because, after all, you’ll have the chance to buy a new car.
Use the 50/30/20 Budgeting Rule
Even if you can only afford cheap cars, you are still going to have to save up a bit of money before you can buy one. When it comes to car budgeting or budgeting in general, the 50/30/20 rule is one of the best rules you can follow. What is it exactly, you might ask?
The 50/30/20 rule is a great way to organize your finances and save money if you aren’t sure where to start. As mentioned before, separating your wants from your needs is very important if you want to save money fast. However, if you’ve never tried doing that before, you might not know how much money you should be spending on your needs or wants and how much you should be saving.
The 50/30/20 rule means that you should direct around 50% of your monthly income (after taxes) towards things that you need, also known as your essentials. As mentioned before, your needs are things such as your rent and food. They are the most important things on your budgeting list since you can’t live without them.
Next, the 50/30/20 rule dictates that you can spend around 30% of your monthly income on things that you want. However, in the case of saving money for a car, you may need to alter this ratio a bit. By cutting down this percentage as much as possible, you will have a lot more money available to spend on your next car.
What You Need to Know
Finally, there is the 20% which is left for savings and paying off debts. If you are in debt, this is obviously very important. Paying off your debts before buying a car can be very helpful because then you won’t need to worry about paying your debts and the payments for your car at the same time. Instead, you’ll only need to worry about your car payments, and your finances will be much simpler.
If you want to save up for a car at a faster rate, feel free to switch around the 50/30/20 rule to how you see fit. For example, by reducing the 30% for wants, you can direct a large chunk of your income towards your savings. This is also true for your needs.
If you don’t spend a lot of money on rent or food, your needs might constitute less than 50% of your income. This will also give you more of an opportunity to save. The main trick is to spend as little as possible on things you don’t need.
Another trick is to spend as little as possible on things you do need. For example, when it comes to food, try to buy cheaper food varieties rather than the more expensive kind. You don’t have to eat cheap food permanently, of course, but just until you have enough money saved up to buy the car you want.
Then, you’ll be able to relax your finances a bit, and you can enjoy the new car that you worked so hard to earn.
Get a Side Job or Try Car Loans
If budgeting doesn’t seem to be working for you or if you just can’t make ends meet, getting a side job may be the answer. A part-time side job can fill some of your free time and direct it towards earning a bit of extra money. You might not think that a side job is worth the effort, but you will find that the bit of extra money you can earn can go a long way, especially over time and if you follow the budgeting tips mentioned before.
All you need to do is find an easy side job that doesn’t take up too much of your time or energy. By adding a few hours of work from your side job to the work you’re putting in with your main job, you will find that it will be much easier to save money and put it aside for later. It might be hard to adjust to the new schedule at first, but eventually, you will get used to it.
Then, once you finally save up enough money for your next car, you can decide whether you want to leave your side job or keep it to earn a bit of extra money for other things you might want in the future. There is also the case of cheap car loans.
Car Loans
Car loans can be very helpful when it comes to buying a car. If you find that budgeting isn’t working out as much as you thought it would and if you can’t get a side job, a car loan may be just the thing you need. But what about your credit score?
You might think that if you have a bad credit score that it will be impossible for you to ever get a car loan, even a cheap car loan, but this isn’t necessarily true. There are several auto financing companies that accept those with bad credit scores.
Once you get a car loan, you’ll start to save money for real. You’ll only have to pay a small amount every month if you get a loan with low-interest rates, and you’ll be able to enjoy your new car. What else could a person ask for?
How to Save Up for a Car Fast
Learning how to save up for a car isn’t as hard as you might expect. Budgeting is one of the most important things you can do. By limiting your wants, you can start saving up a lot of money.
Car loans can also be very helpful. If you’re interested in car loans, apply for one here.