The task of setting budgets
is not exactly the most exhilarating experience you will have in your
lifetime, especially if you’re in need of a new car. However, it can be
highly rewarding if done right. Adhering to a car budget now can save
you from a lot of unwanted money problems in the future. So let’s get
started! Here are 3 steps you need to know to make an effective budget
scheme for your next car purchase.
1) Evaluate your current and future expenses
Knowing what you can afford is the essence of creating a budget. To go beyond the allotted amount is to defeat the entire purpose of it. So in order for this not to happen, you must first do an in-depth study of your current finances. Though not easy, it’s certainly workable, even more so now with all the technology that has been made available to us.
If you choose to track your expenses manually, you can create a chart or spreadsheet on your computer where you can categorize your daily expenses, which would include food, rent, bill payments and so on. You will probably need to record a few months’ worth of expenses to create as accurate an estimate as possible.
Another way to do the tracking is through online bank records where banks would automatically create records of your expenses. Though convenient in the way that you can download a copy of your expenses at any given time, this process will most probably not be as organized as a spreadsheet would be. You can do your own categorizing to better organize your budget, but however you go about it, the main objective is to come up with as accurate a figure as possible.
2) Make a List
The next step is to make a list. Actually, you’re going to have to make two lists. The first list will be of cars that possess the necessary features that deliver the demands of your day-to-day activities. Expect the cars that would be included in this list are those that range from entry to mid-level. The other list will consist of the cars with features that you can live without but find really attractive. Most of the cars in this list will probably not fit your budget, but it doesn’t really hurt to know the advantages they have to offer. Besides, you might even get lucky and find one that fits your budget, right?
The purpose of creating these two lists is to determine which features are worth spending a little extra on, helping you become more ready once you actually enter the car dealership. Knowing beforehand the specific car you want and the extras (if any) to be included will give you an advantage over sales representatives. You are basically ridding them of the chance to sway you with offers of additional expenses that can ruin your budget.
3) Stick to your budget and buy that car
Now that you know your financial status and have a list of what you really want, it is finally time to get out there and actually buy that car! The last step in the processes of creating the budget for your car purchase is to actually STICK to it. It seems simple enough, yet it is potentially the hardest to succeed at. There is one trick, however, that always works. It’s to just keep saying NO. Additional features? NO. Leather seats? Tempting, but NO. No, no and no!
At the end of the day, when the dust settles and you drive away your new car without spending a single cent over your budget, you can confidently say that have won the war and are experiencing one of the most rewarding feelings in life!
1) Evaluate your current and future expenses
Knowing what you can afford is the essence of creating a budget. To go beyond the allotted amount is to defeat the entire purpose of it. So in order for this not to happen, you must first do an in-depth study of your current finances. Though not easy, it’s certainly workable, even more so now with all the technology that has been made available to us.
- Track your expenses
If you choose to track your expenses manually, you can create a chart or spreadsheet on your computer where you can categorize your daily expenses, which would include food, rent, bill payments and so on. You will probably need to record a few months’ worth of expenses to create as accurate an estimate as possible.
Another way to do the tracking is through online bank records where banks would automatically create records of your expenses. Though convenient in the way that you can download a copy of your expenses at any given time, this process will most probably not be as organized as a spreadsheet would be. You can do your own categorizing to better organize your budget, but however you go about it, the main objective is to come up with as accurate a figure as possible.
- Future expenses
- Petrol
- Maintenance
- Insurance
2) Make a List
The next step is to make a list. Actually, you’re going to have to make two lists. The first list will be of cars that possess the necessary features that deliver the demands of your day-to-day activities. Expect the cars that would be included in this list are those that range from entry to mid-level. The other list will consist of the cars with features that you can live without but find really attractive. Most of the cars in this list will probably not fit your budget, but it doesn’t really hurt to know the advantages they have to offer. Besides, you might even get lucky and find one that fits your budget, right?
The purpose of creating these two lists is to determine which features are worth spending a little extra on, helping you become more ready once you actually enter the car dealership. Knowing beforehand the specific car you want and the extras (if any) to be included will give you an advantage over sales representatives. You are basically ridding them of the chance to sway you with offers of additional expenses that can ruin your budget.
3) Stick to your budget and buy that car
Now that you know your financial status and have a list of what you really want, it is finally time to get out there and actually buy that car! The last step in the processes of creating the budget for your car purchase is to actually STICK to it. It seems simple enough, yet it is potentially the hardest to succeed at. There is one trick, however, that always works. It’s to just keep saying NO. Additional features? NO. Leather seats? Tempting, but NO. No, no and no!
At the end of the day, when the dust settles and you drive away your new car without spending a single cent over your budget, you can confidently say that have won the war and are experiencing one of the most rewarding feelings in life!
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