Last updated on May 22nd, 2019 at 05:14 am
A car loan is an easy way to finance a new vehicle without having to deal with a massive upfront payment. Whether you’re upgrading or buying from scratch, a new car will provide plenty of space, comfort and enjoyment for the whole family.
Smart Budget for Car Loan
However, paying off a loan can put some stress on your household budget. But if you’re able to plan ahead and make some sacrifices along the way, you’ll have no problem financing your dream car.
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Track Your Monthly Expenses
As a busy mum, you already have a lot of expenses to manage on a monthly basis. Mortgage payments, bills, groceries, subscription services, personal and medical bills, and one-off expenses for special events like birthdays, Christmas or Easter.
Use an online budget planner to calculate your monthly household expenses and car loan payments. Then compare it with your earnings to see how financially stable you are each month. With this information, you see a much bigger picture of where your money is going and how you can cut down on costs.
Cut Down On Luxuries
There are many lifestyle adjustments you can make to reduce your living costs.
For example, do you buy lunch on a near-daily basis? Try preparing your own lunch at home. Can you live without cable or online streaming services for a while? Cut them out too. Other tips to save on spending include:
- Buy cheaper home-brand products from the store
- Search online and in the local paper for coupons
- Buy essentials in bulk when they’re on sale
- Prepare a shopping list before you go to the store – then stick with it!
Keep in mind, these cuts are only temporary. While it can be difficult to part with your own personal luxuries, you’ll be able to pay off your car loan comfortably and in less time too.
Plan for Running Costs
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When paying off your car loan, you need to take into account not only your loan payments, but the additional running costs to keep your car on the road.
Things like insurance, petrol, servicing, roadside assistance and registration, are all costs you should consider when planning your budget. If you already own a car and planning on upgrading, keep in mind that a newer car will probably cost more to insure.
Set Up Automatic Payments
Want to avoid the hassle of remembering to pay your car loan each month? An automatic payment system is the easiest way to pay off your loan.
Simply tell your loan provider which bank account to deduct your monthly installment payments from, and they’ll take care of the rest for you. With an automated debit system, you won’t have to worry about missing an installment payment and having to pay late fees ever again. However, be smart and make sure you have the funds to cover the payment in your account. You don’t want to make matters worse by ending up in chexsystems.
Pay Off Your Loan with Ease
The added expense of paying off a car loan doesn’t have to drag your budget down. With a clear focus on your spending habits, cutting down temporarily on certain luxuries, and anticipating the running costs of your car – you’ll be able to pay off your new car without any hassles.