How To Save Money For a Car

When you are purchasing a car, whether it be your first car or your tenth, it is much cheaper to not take out a loan. This may be obvious, but many people make the same mistake. By taking out a loan, you are backing yourself into a cage. It is very hard to get yourself out of this. You will be paying back that loan for years and years, no matter the size of it. Interest is charged on the loan, making it not worth it. Although a car loan is a quicker approach, paying for the car upfront is faster, cheaper, and all around a much more reasonable choice.

The best way to save money for a short investment like this is to pick a number. Pick an number anywhere from 8 to 15, and whenever you get a paycheck, take the percent number you picked and put that money away. Create a separate savings account for, not only this new car, but also for any luxury item you wish you had. It is always difficult to purchase a new television without knowing where the money will come from. If you have a separate bank account that you cannot access unless you are purchasing something like a television, you will have a much easier time getting through life. Because a car is a much smaller investment then a house or a college fund, it will not take long to save up the money. If you think about, you can most likely live off of anywhere from 92 to 85 percent of your paycheck. If it is tough for you to live off of that amount, you will have to make other cuts in your spending.

Saving money for a car can be as easy as you want or as hard as you want. Think about your life for a moment and consider how many times a week you purchase something that you do not actually need. I will name a couple:

• Starbucks Coffee
• Buying new books or products instead of used books online
• Paying to use an ATM
• Eating out instead of at home

• I would normally spend $30 more on Starbucks coffee then store bought coffee
• $50 more per month on purchases that I could have made used
• $18 on ATM charges - about $3 per ATM use
• $150 more on dining out purchases rather than eating in

If you work at home part time, like me, and you are making a little extra money, use it towards something that counts.

Personally, I use all of the money I make online to pay for simple things like gas and car repairs. I make anywhere from $50 to around $200 a month online on the side, depending on how much time I put into it, and easily pay off my gas purchases and have a lot of money left over. Gas these days are moving into the $4 range, and it is becoming harder to coop with the prices. It is very possible to put the money online towards a new car. If you are making $100 a month online on the side, you could pick a different percent of the money and put it in the new savings account you created.

Good Luck!