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What are the Best Tips for Saving for a Car?

Article Details
  • Written By: Christina Edwards
  • Edited By: W. Everett
  • Last Modified Date: 21 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Owning a car is almost a necessity for many people who need to drive to get to work, school, and other places. Saving for a car can be a bit difficult, but with proper planning and discipline, this task can be accomplished. After making a budget, a certain amount of money can be set aside for the sole purpose of buying a car.

The first step in saving for a car is to make a budget. A person would need to list all sources of income, including wages or alimony. After all sources of income are listed, expenses can then be deducted from this final amount.

Expenses are often deducted monthly or weekly. They can include shelter costs, like rent, mortgage, or insurance. Utilities like electric, gas, garbage, and water should also be deducted. A person can then estimate the amount that his household will need to spend on other necessary expenses like food, child care, and personal hygiene products, and deduct those as well. When making a budget, some people also deduct a certain amount each month for unexpected or emergency expenses.

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After a budget has been made, a person can then decide how much he can afford to set aside each month when saving for a car. To avoid spending it on something else, this amount should be taken out of a person's monthly income as soon as it arrives. Although some people opt to save money in an actual piggy bank, a bank account may be a better option. Not only is there less chance that a person will spend money in a savings account, but many of these types of bank accounts also allow the holder to earn interest on the balance of the account.

If the amount of money spent each month does not allow a person to reserve much extra cash, there are a few things that can be done to cut down on spending. Cell phone users, for example, are often charged for services that they never use. By making a call to the phone company, these features can be dropped, resulting in less money being spent on the bill and more money put toward saving for a car. Luxury expenses, such as eating out, can also be eliminated.

Saving cash and change can also add up when a person is saving for a car. Many people who save all of the coins that they get each day find that this will often add up to substantial amount. Saving dollar bills can also add up.

Some individuals who work for tips also have another trick when saving for a car or other large expense. Since most bills have serial numbers, they will save the bills that begin with a certain letter or number. These bills are then put into a safe place.

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