Simple tips for saving money for a Car
You would come across most financial articles which discourage you from buying a car. They may advise you to buy only when you can pay for the same in cash. However, you must realize that for most Canadians a car has become a necessity. Unless you live downtown in one of the major cities you would require a car for commuting to work, and for almost anything. Let us see the basic tips while you buy a car.
Consider other expenses while owning a car
Sometimes you may forget that along with the cost of the car, there are certain other necessary expenses. These are the cost of gas, insurance etc. These are costs which might be overlooked at the time of purchase, but they add to your costs of owning your car.
Know How much to save for it
Once you have decided that you need to own a car, the next thing you need to do determine how much you need to save to own it. Instead for going for a very extravagant car, it is best to begin with a small car that’s good on gas. This will ensure that you need to save the minimum amount to save for owing the car. Thereafter decide on the budget and the amount per month you would need to spend to stay comfortable with. You could take the help of a loan calculator to determine the EMI which would be applicable.
Choose a high-Interest Savings Bank Account
Once you start to save you need to save in a savings bank account that provides you with a higher interest rate. For saving now in a Savings account there are certain accounts wherein you could avail an interest which is as high as 2.50 %. There are on the other hand certain banks which pay a very low rate of interest in their Savings Bank Account. So you need to consider the same wisely after going through all the information carefully. A TFSA is a great option that offers tax savings at the same time. You also need to take a close look on interest rates offered in the TFSA Savings Accounts as well.
Once you get your new car, it may be a good time to again to start saving up for the next one.
