How to Save For a Car With Low Income
How to Save For a Car With Low Income
Posted on August 23, 2022
It can be tough to save for a car with low income, especially when you’re still making payments on your existing one. Times are tight, work can be demanding with little extra incentive and money usually flows out just as quickly as it arrives.
We asked our car loan team for some practical tips on saving for a car loan down payment even when you don’t have much spare cash.
How to Save for a Car with Low Income
We appreciate that it isn’t easy saving money sometimes. There can be a lot going on. Lots of demands on your time and your money, but if you want a new car or to save for emergencies, saving is something that has to happen.
Create a budget
Our first step is to create a budget so you know exactly where you are. Use a free spreadsheet program or budgeting app, add your income and every outgoing you have.
Add a third column for all your debt, add the interest rate for each and order them with the most expensive at the top.
Hopefully, a budget will show you exactly how much you have left at the end of the month. If you fall short, it should show by how much so we can address that first.
Identify areas of savings
Listing your complete outgoings in your budget should identify areas where you could make savings without impacting the way you live too much.
Whether that’s subscriptions you don’t use, a cable contract you’re never home to enjoy, magazine subscriptions you never read, insurances you no longer require or something else.
Identify as many of these areas of savings as possible and cancel all the payments.
If this leaves you with a cash surplus, allocate it to savings.
Automate your savings
Automatic payments are what we recommend to avoid missing debt payments but they can also work for savings too.
Set up a savings account and allocate an amount to save each month. Set that up as an automatic payment to go out at the same time as your other bills.
You can start small to make sure you don’t break the bank and steadily increase the payment as you go.
Prioritize paying off expensive debt first
There’s a good reason why we asked you to order your debts in cost order. Because we want to pay off the most expensive first.
That way, you’re paying down the debts with the most interest first and will slowly be paying less interest and more of the actual debt. This will save you money over time.
Which you can also add to your savings.
Overtime and bonuses
If you have the opportunity to work overtime or get bonuses, allocate them to savings or at least, a portion of them to savings.
If you can work overtime, do it and put everything away. You will have a tangible, quantitative reason for working extra hours and will see your savings increase over time.
It doesn’t matter whether it’s $20 or $2,000 a month, as long as you save something!
We will use all our skill and experience to deliver the lowest possible Guelph auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.
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