You graduated college! Yippie! Or you’re just in the market for a new car because your clunker is on it is way O-U-T. That’s great too, there’s just one thing looming in front of you. WHERE DO YOU START? The first and most important thing is to figure out your BUDGET. Don’t freak out, I’ll help you break down what a budget is and how to find yours so we can get to onto the next step of owning your dream car.
What is a budget?
A budget is how much money you have to spend during a period of time.
How do I figure out my budget?
Well let’s break it down into 4 easy steps.
1) How often do you get paid and how much?
You’ll want to use your net pay per paycheck. If it’s hourly, do the lowest net you’ll make each month, including deductions for benefits: For example, we will do $1,000 bi-weekly or $2,000 a month.
2) What type of bills do you have to pay monthly?
Make a list of all things you need to pay each month.
We can use my budget, I rent a 3 bedroom apartment and have 2 other roommates.
– Rent: $450
– Car insurance: $94
– The Gym : $20
– Electricity: $30 (fluctuates about 5-10%, depending on season)
– Cable/Wifi: $35
– Phone: $60
– Credit card: $30
– Netflix: $9
3) what else do you need to budget for monthly?
4) What’s the total?
That’s a grand total of $1,199 per month. AH! Seems terrifying. But wait,
We make $2,000 a month (at our lowest). You can also spend more or less in each area, or not at all in some of the areas or spend less or pick up some overtime and get some extra dough!
But as of now, our total is $2,000(net income)-$1,208(bills)= $792 left
You can take your budget and fine tune it to your needs. You can choose what kind of car payment you want to make: A safe place to be? $200-$250 a month max.
The savings will help you be able to put down a down payment- unless you have a trade in or gift from your parents.
I hope this helps you get your budget under control and get you well on your way to having a nice new car!