Because finance is such an involved subject, as soon as you say words like ‘budget’ people’s eye will glaze over. Either because it’s not interesting or because it seems to complicated. It doesn’t have to be either of those, as our Cambridge car loan team explains out to easily budget for a car loan.
Top budgeting tips for car loans
Budgeting is at the core of all of our financial wellbeing. Whether that’s on a personal or national level, living within our means is how we stay in the black.
It’s a simple thing to do as the following tips to easily budget for a car loan will demonstrate.
Use a free spreadsheet program
Google Sheets is free, simple to use and available to anyone with a Gmail or Google account. You could use a budgeting app if you prefer but a spreadsheet will do.
All you need to do is set up a budget spreadsheet and add 3 columns. One for income, one for outgoings and one for existing debts.
Complete each column as accurately as possible and including every single outgoing or source of income. Subtract the total of the outgoings column from your income column and that’s how much you have left each month.
Finally, order any debts in order of interest rate, high to low. That way you can see what your most expensive debt is.
Set realistic goals
Most of us are goal oriented to one degree or another. That could be saving up enough for a down payment or reducing outgoings to give you a surplus each month so you could afford a car loan.
Whatever your goal, make sure it’s ambitious but realistic and achievable. We want you to succeed after all!
Order priorities as needs or wants
We will often recommend creating a needs and wants list when researching for cars but you can do it with other expenses too.
Want to buy something expensive? Is it a need or a want? Could you live without it? Could buying that item make life easier or less expensive?
Consider more than just the knee-jerk reaction of wanting to buy something. Often, when you consider it further, it’s an impulse rather than a genuine need.
Set up automatic savings
Savings are the one thing we all know we need but not enough of us have. Once your budget is in place and you have an idea of your income and outgoings, now it’s time to change that.
Open a savings account and set up an automatic payment for an affordable amount each month. Have the money leave your account the day after you get paid so it doesn’t get spent. This allows you to save up money to easily budget for a car loan.
Use savings buckets
Most of us have competing priorities for our money so why not use savings buckets to manage them all?
Whether you use an account that supports buckets or track savings another way, divide savings up into their respective priorities means you can save for more than one thing at a time.
Don’t be afraid to adjust
If this is your first budget, be aware that you might not get it right first time. Give it a couple of months and revisit. If everything is going okay, leave it in place. If something needs to change, don’t be afraid to change it.
Budgets are plans but they have to be flexible. Never be afraid to adapt to a situation and work the problem!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!