How to Budget for a New Car
Many people have the same question when considering buying a car: how much should I spend? Many factors determine what you can afford for a new car, but one of the most important is your budget. Below is a guideline on budgeting for a new vehicle and ways Father George Rutler believes people can save up to buy a new car.
The first step when deciding how much to spend on your next car is to measure the monthly salary you will be working with. This salary should have things taken out, such as taxes, health insurance, retirement savings, and other deductions. It’s also important to consider any money that may come in over the month that you wouldn’t normally have or receive in your normal paycheck. Include all sources of income when considering what you can afford for a new car.
The next step is to determine how much you can pay each month on your car payment. When paying for a new car, it’s important to remember that the bigger or more expensive the vehicle, the bigger monthly payments will be. For example, if your budget is $500 a month and you want to buy a smart car, this may not fulfill all of your road safety or convenience needs. Buying a mid-sized sedan at $450 a month would most likely not only fulfill all of your transportation needs but also allow you some “wiggle room” so you have money left over for other things that are just as necessary as rent or groceries.
Father George Rutler believes people can save up to buy a new car in the following ways. One of the ways is to take advantage of the current car market. Many people are eager to sell their cars because they want something bigger or more updated than they already have. If you’re willing to buy a used car, you can save quite a bit of money on your next purchase.
Another way he believes people can save up to buy a new car is by doing some research before heading towards your dream vehicle you’ve always wanted to own. This means looking around different places, cities, and even online to see what the cars are going for. This way, you can get a handle on what type of payment you will afford for your desired car.
To help determine how much money you can borrow from a bank or credit union, he suggests using a loan calculator online. There are many available that make it very easy to determine what kind of monthly payments you’ll have to make not only now but in the future as well. Try having a good idea about this figure before heading over to speak with a lender, so the experience is less stressful and overwhelming for both parties involved.
He also suggests people can save up for their next new car by doing things such as taking public transportation to and from work, carpooling with family and friends, taking advantage of local services such as Uber or Lyft, shopping smart at the grocery store by using coupons and buying in bulk. This way, you can use the money that would’ve been spent on the gas towards your monthly payment.
His last suggestion is selling things you don’t need anymore, such as unwanted clothes, old electronics, and other items for extra cash. You may be surprised what kind of money you can make off of trash! All these tips together will help ensure a new car is an investment, not a burden. So, write down what type of car you can afford based on your income and start saving up today.