Could you Save for a Car in One Year?
Buying a car is a big deal, no matter who you are. They are much more expensive than buying a book or a pair of jeans. Many people finance a car or lease a car instead of buying it with cash. It might seem impossible to be able to buy a car in cash if it costs $20,000 or more.
If you want to avoid this high purchase, you could buy a used car. These are usually cheaper and can be as low as a couple thousand dollars. You could buy a junk car for a few hundred dollars and fix it up.
When you buy a new car, there are a few advantages. If you pay in cash, you can save a lot. If you buy a $75,000 car in cash, you would save a lot if you didn't finance it over a few years. Most people can't even afford to finance a $75,000 car. If you wanted to buy a car that cost $18,000, could save for it in a year?
A lot will have to do with what you make. If you make less than $30,000 a year you probably won't be able to save for it in a year unless you didn't have to pay for any of your living expenses or almost anything at all.
If you live with your parents or somehow get out of paying for a place to live and food, you could save a lot more, but using the money you save to buy a brand new car probably wouldn't be very respectful to those you are taking advantage of. You should probably put it towards an education or a home of your own.
Let's look at a scenario where saving $18,000 in one year would be possible. You live alone in an apartment with rent costing $700. You skimp on everything you can including no cable or internet, you only eat Ramen noodles, you never go out, and you save every penny you can get your hands on.
You make a healthy $35,000 a year paying about 20% in taxes making your after tax income about $28,000 a year. If after rent of $8,400 a year can survive on $1,600, then sure, you can afford an $18,000 car?
Sure, if you could live that way, you could save $18,000 in a year, but it would be extremely hard. If you make a lot more money with that, you could save that amount and not live so bad. For those who don't make a lot of money, take a few more years to save.
If you want to avoid this high purchase, you could buy a used car. These are usually cheaper and can be as low as a couple thousand dollars. You could buy a junk car for a few hundred dollars and fix it up.
When you buy a new car, there are a few advantages. If you pay in cash, you can save a lot. If you buy a $75,000 car in cash, you would save a lot if you didn't finance it over a few years. Most people can't even afford to finance a $75,000 car. If you wanted to buy a car that cost $18,000, could save for it in a year?
A lot will have to do with what you make. If you make less than $30,000 a year you probably won't be able to save for it in a year unless you didn't have to pay for any of your living expenses or almost anything at all.
If you live with your parents or somehow get out of paying for a place to live and food, you could save a lot more, but using the money you save to buy a brand new car probably wouldn't be very respectful to those you are taking advantage of. You should probably put it towards an education or a home of your own.
Let's look at a scenario where saving $18,000 in one year would be possible. You live alone in an apartment with rent costing $700. You skimp on everything you can including no cable or internet, you only eat Ramen noodles, you never go out, and you save every penny you can get your hands on.
You make a healthy $35,000 a year paying about 20% in taxes making your after tax income about $28,000 a year. If after rent of $8,400 a year can survive on $1,600, then sure, you can afford an $18,000 car?
Sure, if you could live that way, you could save $18,000 in a year, but it would be extremely hard. If you make a lot more money with that, you could save that amount and not live so bad. For those who don't make a lot of money, take a few more years to save.
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