If you’re anything like me, you’ve been dreaming of that new car. And chances are, you’ve been talking yourself out of it. “It’s so expensive,” or “I don’t need it.” But just think: What if there were a way to save up for a new car without giving up any of your current expenses?
That would be pretty awesome, right? Well, there is such a thing! It’s called having an emergency fund (or savings account). If this sounds like something you could use in your life right now, then read on because I’m going to tell you how to build one that’ll help fund your next ride down the road toward freedom!
The best way to save for a new car is to set up a dedicated savings account.
The best way to save for a new car is to set up a dedicated savings account. It’s important that you don’t mix your car-related savings with other funds, such as an online checking account, since this can make it harder to track how much money has been spent on the vehicle and how much remains in the bank. You should also look for an account with high interest rates and low fees, so that your money grows faster than inflation and doesn’t get eaten away by fees. Examples of banks that meet these criteria include SoFi and Capital One.
Online banks are also great places to start looking; they often offer higher interest rates than traditional brick-and-mortar banks do, as well as more convenient access through mobile apps or websites that let customers manage their accounts from anywhere at any time. Some also provide debit cards with no annual fee attached–a feature which may come in handy if your car purchase involves traveling out of state!
Do not use your everyday checking account.
You don’t want your car savings account to be mixed in with all of your other accounts. This will make it easier for you to keep track of and also help prevent temptation when the money is in plain sight. You can set up an online bank account or use an old checking account that has been inactive for some time, which will allow you to easily transfer funds between banks if needed. Simply put, a checking and savings account should be two separate entities.
Make regular contributions to your account.
Make a commitment to save toward your car purchase by setting aside a certain amount of money each month. Set a goal for how much you want to save, and then stick to it. Start small–the amount in your account will grow over time as long as you keep contributing regularly. Make sure to set up automatic withdrawals from your paycheck or bank account into this savings account, so that it’s done without thinking about it every month (or week). You’ll get used to living on less money and realize that there are other things you could do with the extra cash once in a while.
Make saving part of your routine; use apps such as Mint that help track spending habits so they’re easy enough for anyone who doesn’t have an MBA degree in accounting!
Pay yourself first.
The best way to save money is by paying yourself first. This means that you set aside a portion of your paycheck before you pay any bills, even if it’s just $25 per week. The more you can put away each month, the better–but don’t feel like it has to be a huge amount; even small amounts can add up over time!
If you’re an hourly worker with a low salary, try saving 10% or 15% of your paycheck as soon as possible. If your salary is higher than average (or if your income fluctuates), then consider setting aside 20%, or another amount within your comfort level.
Automate the process by setting up automatic monthly transfers from your checking to savings accounts.
The best way to make sure you’re saving for a new car is by automating the process. Automating your savings can be done in two ways:
- Set up automatic monthly transfers from your checking account into a savings account. This ensures that you never miss a payment and lets you build up funds without thinking about it too much. It also helps prevent overspending on impulse purchases or unexpected bills–you’ll have no choice but to save every month! And if you ever need cash quickly, just cancel the transfer and use those funds yourself (but don’t do this too often).
- Use an online budgeting tool to track all of your assets and debts, including savings accounts. This way, when someone asks how much money they should put toward their down payment for that new car, the exact amount is already set aside and you won’t have to worry about getting the money.
Buying that new car
We hope you’ve found this article helpful, and can now set out on your journey to a new car with confidence. It’s important to remember that saving up for a new car is a long-term commitment, so don’t get discouraged if it seems like there’s no progress being made. You may not be able to afford that dream ride just yet–but by following these tips, you’ll be well on your way!