Owning a car is extremely important, even a necessity in some parts of the country. If you have a car that’s nearing the end of its life, saving up for a new car down payment should be a financial priority. This can be an extremely task to fulfill at times, especially when salaries continue to be low while the cost of living continues to rise.
If you anticipate a need for a new car in the near future, use the following tips to start saving money:
Gradually Increase your Savings
Saving money is difficult, and statistics show that most Americans have less than $3,000 in their savings account.
Start saving for a new car down payment immediately. Begin with 5 percent of your earnings for the first two paychecks, and increase it to 10 percent thereafter. After a few months, depending on your salary, an accumulation of at least a couple thousand dollars is definitely possible. Continue to save 10 percent of your salary for at least six months and before you know it, you’ll have a down payment for a new car.
Borrow from your Retirement Account, if Necessary
Retirement is extremely important, but in order to fund your retirement, you’ll need to keep your job. Being able to commute to your job might be dependent on buying a reliable vehicle.
In cases like this, borrowing from your retirement account might be a practical idea. Once you’ve picked what type of car you want to buy, borrow 10 percent of the total purchase price for the vehicle from your retirement. As long as you don’t but a luxury vehicle, this won’t be a huge amount of money, and you should be able to make up for it by putting additional savings away.
Take out an Installment Loan
Take out an installment loan from a reputable company like MaxLend.com. Repayment of these types of loans are much easier than other loans, and the vast majority of consumers will qualify for them. While it will be difficult to cover an entire down payment, the installment loan will make it much easier to save up additional funds or will help in offsetting the amount you take from your retirement account.
A new car should be an essential part of your life. Don’t overspend on a luxury vehicle that comes with a hefty monthly payment, and try to find a car that is perfect for commuting to work.