If you’re tired of driving that clunker or “sensible” car you were talked into, upgrading to a dream car like a new Porsche might seem too far-fetched. You want to be responsible with your money, and unlike a house, most cars don’t appreciate in value.
However, consider the fact that Americans are commuting longer than ever. In some parts of the country, commutes are at least 30 minutes long and sometimes much longer. A lot of people are picking up car sharing side hustles, and if that’s you, you want to make as much as you can touting that “luxury” perk.
You don’t have to validate your reasons for wanting your dream car. But you do need to get smart about saving for it. There are a few ways to put aside some extra cash for a down payment (or the entire price!) while also staying wise about your next moves.
Here are five ways to save while simultaneously not over-spending on that next ride.
- Auto-save on every paycheck. If your work offers an option to put part of your paycheck into a savings account automatically, take advantage of it. However, don’t just settle for any savings account. Some high-yield accounts offer up to 2.3 percent in interest and require no minimum or charge a fee. If funds are being automatically put into an account for your car, you won’t even feel like you’re saving. This is a good approach for saving for other items, too, from vacations to down payments for a home.
- Give yourself a cash allowance every week. Do you actually know how much you spend per week on items like gas, coffee, food, and entertainment? You know you should, but budgeting those small, daily items can be a pain and easy to overlook. You likely reach for your credit card more often than you should. To help save money, give yourself a cash allowance for these items every week. It’s harder to spend cash, and you’ll be able to budget as you go (i.e., do you really want that coffee, or do you need that $5 for your gas budget?). You can also put aside a set amount of cash from every paycheck for the down payment on your car.
- If you have side hustles, dedicate one of them strictly for saving for a car. Millennials especially are skilled at the side hustle. However, if you have one (or even more), one of them can be just for saving for a car. Have a separate account or place to put these funds, and commit yourself to not touching it—no matter what. At the same time, feel free to shop online for that dream car. Consider going for a used option, which can save you big bucks since you’re not paying a premium just to drive it off the lot.
- Actually create that budget and use it. Whether you use an Excel spreadsheet or an app like Mint, creating a budget, using it, and revisiting it regularly to tweak it is a must if you want to get in control of your finances. Make sure you have a column specifically for saving for your car. You’ll also be able to see where you’re overspending, where you could be more frugal, and where you might want to ditch some expenses entirely. It will force you to get creative about making the most of your money.
- Check out one-day gigs. If you want to save for your dream car faster, one of the best ways to do it is to increase your income. You might not have the capacity to hold down a part-time gig entirely, but there are many options for one-day gigs that pay. Craigslist and other sites are full of these opportunities, and if you practice a little common sense along the way (avoid those “hot modeling” gigs), you’ll be able to save up a lot faster than you think. However, you might want to plan your purchase around the seasons. Summer months are often when dealerships skyrocket prices knowing that everyone wants a new car, and end of the month, as well as December, is when they get more motivated about clearing out their inventory.
Saving doesn’t need to be a responsibility to dread. In fact, it can help provide you with financial security faster—and that’s peace of mind you can’t buy.