Five Step Guide for Saving Up to Buy Your First Car
Saving for and buying your first car can be daunting, especially if it will be the most expensive purchase you've ever made. To make the larger goal of saving for a car more manageable, break it into the following steps. You'll be able to track your progress, and the smaller accomplishments you make along the way will motivate you to keep going.
- Open a savings account – If you have a checking account, open a savings account at the same bank. It'll make transferring funds into your savings account simple, and separating your finances into buckets will help prevent you from accidently spending your savings. You'll also be able to track your progress by simply glancing at your savings account balance whenever you log in to online banking.
- Establish a savings goal – Before you start saving, figure out how much you want to spend when buying your first car. Decide whether you'll be buying new or used, how much it will cost and whether you'll be paying the full amount or putting down a down payment.
- Make a budget – Once you know how much you need to save, create a budget by making a list of your monthly expenses. By comparing your monthly income to your expenses, you can figure out how much you can afford to save each month. Make sure to leave some breathing room in the budget for unexpected expenses, and be realistic about the amount you can put into savings.
- Save from each paycheck – Making progress toward your goals is most effective when you contribute to your savings from each paycheck before setting aside money for other expenses. If you miss a week or two, don't get discouraged. Accept that unexpected expenses might come up, and get back on track to contributing toward your goal.
- Put unexpected income into savings – Birthdays, holidays and tax season often come with unexpected income. It can be tempting to splurge and use that money on something frivolous, but putting those funds into savings means that you'll reach your goal of buying your first car weeks or even months sooner than you'd planned.
If you're a first time car buyer, it can be easy to forget about the other expenses that come with car ownership. Be sure to factor fuel, maintenance and auto insurance into your budget. To find the best rates, start shopping for affordable auto insurance online before you buy your vehicle, and ask your insurance agent about ways to save. You might be eligible for car insurance discounts for things like getting good grades and driving a safer vehicle, which can make budgeting for your new car a little easier.
The provided information and safety suggestions were obtained from sources believed to be reliable and is intended for informational purposes only. Titan and its affiliates assume no liability in connection with providing it or your use of it. Your circumstances may not warrant or require some or all of the safety suggestions, and there may be additional available safety procedures that are not referenced on this webpage.