If every bill you receive gives you anxiety, you don’t quite know where all your money goes and you just can’t seem to get ahead, then you’re living paycheck to paycheck. If it’s time for a new car, whether you need to upgrade, buy your first or your current ride is out of action, here’s how to buy a car while living paycheck to paycheck.
Stop Living Paycheck to Paycheck
Easier said than done but there are a couple of things you can start doing now to stop living paycheck to paycheck.
Track your spending and budget accordingly
Thankfully, for many, much of your paycheck to paycheck living could simply be coming from the fact that you’re not tracking your spending accurately. Open your online banking accounts and take a look at your spending over the last few months. Categorise your expenses and create a realistic budget.
Create a savings plan
Now that you’re tracking your expenses you can create a savings plan. You’ll want to make this process as automatic as possible. Take out your savings as soon as your paycheck arrives. This way you won’t be tempted to purchase things you don’t need and simply save what you have left over from each pay. You already know that doesn’t work.
How much do You Really Need?
Now that you have a savings plan and budget in place, you can figure out how much you have to spend on a car. Once you’ve figured out what you can afford to spend, it’s time to figure out what type of car fits your budget. Of course, you’ll need to factor in your lifestyle and what kind of car you need, but you’ll also need to factor in your budget. To stick to your budget, consider buying a used car as you’ll get a lot more car for your buck.
Find a Loan
If buying a used car isn’t your first choice, or you need a new car now, before you’ve had enough time to save, you’ll need to get a loan. You’ll also need to carefully consider whether you can afford to get a loan. While many people assume that they can’t afford not to get a loan, if you’re unable to meet the repayments over the life of the loan, you could end up in legal trouble and your credit rating may be affected. Make sure you shop around for a loan and do your research first to get the best deal. Doing your research now could save you big time over the life of the loan.
Get a Guarantor
If you’re struggling to find a loan that suits your budget or your chosen credit provider thinks you may be unable to repay a loan, they will ask you for a guarantee. This means, you’ll need to find a friend or family member to sign a guarantee on your behalf. They’ll be in charge of repaying the loan if you fail to make the repayments. They’ll also be responsible for paying any fees, charges or interest. You should ensure you make every effort to obtain a loan without needing a guarantor first, so make sure to shop around.