How to Save Up for a Car at Any Budget

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Next to your house, buying a car is probably one of the most necessary and impactful purchases that you can make. After all, even if you live close to work, you still likely need to bring your kids to school, run errands, or travel for one reason or another. Although we all know that a car is important, some people feel that they can’t afford a vehicle due to their financial situation. However, where there is a will, there is a way.


Even if you live paycheck-to-paycheck and you believe that you don’t have an extra penny to spare, you can still find a way to save up for a car. It likely won’t happen overnight, but with smart choices and a desire to succeed, you will accomplish your goal. Let’s talk about the costs associated with buying a car and how to start saving today.

Understanding the Costs

Before you even think about going online and applying for a car loan, you need to understand what the vehicle-buying process entails and how your hard-earned money will be spent. Remember that you don’t have to pay for the whole vehicle up front; you’ll just need to figure out how you can afford the monthly payments. One way to make them more manageable is to provide a higher down payment upfront.


Typically, a good down payment will account for 10%-20% of the purchase price. If you make less money, then aim for closer to the 10% mark, which will still put a dent in your monthly payment. A down payment is especially important if your credit score is less than desirable because then you’ll have something that shows the dealership that you are serious about this purchase. Keep in mind that the sticker price may not include taxes and other miscellaneous expenses, so ask the salesperson about all potential costs so you can prepare your proper down payment.


Remember that there are also other costs associated with car ownership. For one, you will need to also pay for insurance. You can save money on your monthly payment by opting to have a higher premium, which is the cost you would have to pay if you were in an accident. You’ll also need to pay for periodic maintenance and fuel. If fuel costs are an issue, then you might consider purchasing an electric car. However, you will need to weigh the pros and cons of going electric because even though you’ll save money on gas, the car itself may be more expensive. 

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Create a Budget

While you are thinking about the considerations above, you should start saving money, and the first step is creating a budget. To paint the best picture of your current finances, you should first list all income streams that are currently fueling your lifestyle. Then, you need to list every expense that you pay every month. That includes everything from the utilities you use to power your home to the cost of food every week. Once you have accounted for everything, you need to look at how much money you have left at the end of the month. Is it enough for the down payment?


If you are still short on funds, then you need to start thinking about how you can cut out some of those expenses. Are you spending a lot on your daily Starbucks run? If so, then consider buying coffee at the grocery store and brewing your cup of joe at home. Do you have several streaming services while you’re also paying for cable? If so, consider cutting out what you watch the least. You can even save money on your electric bill by turning out the lights whenever you are not in the room.


The more you look at your life from the lens of saving money, the more unnecessary expenses you will start to discover. For instance, although your home may be your sanctuary, there are many ways that you can decorate on a budget to save money. Start by comparing prices before you buy furniture, so you get the best price. You can also buy multi-functional pieces like a bed with a storage compartment underneath or a bed that connects to a desk. That way, you can use the furniture you have for multiple purposes, and you don’t have to buy what you don’t need.

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Many More Ways to Save Money

While buying less and cutting expenses are always great ways to save money, there are many other tactics you could try so you can afford that ideal car. For instance, while putting your money in the bank and creating a car fund is a great idea, if you are using a traditional financial institution, you aren’t making your money work for you. Instead, you should look into a high-interest savings account that will reward you with a higher rate just by adding money and not taking it out. 


If you use cash for many of your purchases and you often come home at the end of the day with change in your pockets, don’t let it go to waste. Every cent counts when saving for a car, so take all of that loose change to the bank and put it in your account. You can transfer from your bank to your high-interest account once the money is in the system. Save even more money by avoiding online shopping and forcing yourself to go to the store if you think you really need something. The work required to get there may convince you that the purchase isn’t actually necessary.


In the case that you have tried everything, but you are not making the progress that you planned, then you may consider finding a side hustle to make the extra money necessary for the car. A side job could include anything from driving for a food delivery service a few hours a week to trying something like freelance writing or online tutoring. Whatever you choose, make sure that every dollar that you make there goes towards your car fund.


As you can see, while it may take some time and dedication, you can save enough to buy a vehicle. Just remember to stick to your goals and spend wisely, and you will get there sooner than you think.