Buying your first car is no small achievement. In fact, it’s a victory that most drivers should relish in with it often being your first major step into adulthood. In true candor, the likelihood of your first car being your “dream car” is very slim. However, there are effective ways to save money for your first car so that you’re not just settling. Perhaps you’ll find a car that meets both your needs and budget all in one.
Read on to unravel the easy ways to save for your first car. In addition, learn of simple ways to increase your monthly income until the time comes.
Ways to save for your first car
Obtaining a drivers license is like a rite of passage. Most first time drivers are eager to jump into their family hand-me-down car and enjoy the freedom of the road. But after awhile, every new driver starts dreaming of what their first car will be. For many, the quest to save for your first car is inevitable. It takes time, patience, and financial planning to get to that major step.
Typically speaking, it takes a 1-2 years to gather enough capital to invest properly in your first car. Here are 5 important tips to consider that will help get you there.
Open a fixed savings account
First things first, create a safe space for storing your funds. We recommend opening a fixed savings account with strict conditions on when or how you can access your savings. Why? You might ask. The purpose of a fixed savings account is so you don’t have easy access to the money at all times. This means when an upcoming vacation, birthday party, or social event takes precedence in your life, you won’t feel inclined to withdrawn from this account.
Avoid excessive credit spending
Credit cards are a catch-22 for first time car buyers. Although you need a high score to secure proper financing, most financial experts would encourage you to limit your credit card spending while saving. The more debt you accrue, the harder it will be to save money for your first car.
Familiarize yourself with the automotive industry
A lot of first time car buyers are unfamiliar with all the options on the market. From electric vehicles to compacts, some might argue there are too many choices. Before you jump the gun on a certain make or model, do the following research. Learn about fuel efficiency, interest rates, safety innovation, and car depreciation. All these factors play a major role in what type of car you should drive and buy.
Initiate a plan to save money for your first car
When you begin to plan for your first car, start small. Don’t obsess over having the most luxury make or model as your starting out in life. For example, if you’re a single person living on a fixed income, you’ll want a car that makes sense for your lifestyle. You don’t need to save for family-size SUV to start. Remember, this is just the first of many cars you’ll probably own throughout your lifetime. Configure an amount you feel comfortable saving each month, and hold yourself accountable from thereon out.
Consider gas and car insurance expenses
While saving enough money for your first car might seem like a task in itself, there are other costs to take into consideration. Owning a vehicle is much like buying a home or taking out a loan. It’s an investment that comes with accumulating costs. Before you sign the dotted line, research car insurance rates and even consider putting aside some funds for your future gas expenses.
Save money for your first car without the unnecessary stress
By planning ahead, you’ll make the right decisions when it comes time to save money for your first car. Sometimes life might get in the way and keep you farther from your target. It’s important in those moments to not let the setbacks deter you from the bigger picture.
Whether you have to get a part-time job, get creative on Etsy, or start selling old furniture on OfferUp, you’ll find a way to keep your savings increasing. Once you get behind the wheel of your first car, you’ll be thankful for all the steps you made ahead of time. No stress, just pure enjoyment for the road ahead.
How did you save money for your first car? Share your experience below.