How to Save Up Money for Your First Car as a College Student

How to Save Up Money for Your First Car as a College Student
  • Opening Intro -

    College represents various things to various people, but one of the most prevalent things that college will mean to
    students is their foray into adulthood.

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Most people attend college right after they graduate from high school, and that means that campus life will be the first time that they will experience independence. This can be a stumbling block for many, as it necessitates a level of skill that many aren’t equipped to deal with.

Here’s what you need to know in order to handle your money in order to purchase your first car.

Credit

Credit will form the foundation of financing, and financing is essential for things like buying a house or a car. This means that keeping your credit score within the acceptable range is essential, but this can be difficult when you’re first learning financial independence.

You’ll likely need to show your credit score when you’re shopping for a car through auto financing. To get your first car during your time at university, staying on top of other expenses like tuition, rent, or a cell phone bill is key.

However, improving a bad credit score is certainly possible.

A common tactic for improving one’s credit is to get a credit card. Poor management of a credit card can ruin your credit, but strategic use can actually benefit your credit score immensely.

This principle is simple. Paying bills on time is the primary means of increasing your credit, and credit cards give you control over the cost of its associated payments.

Using the credit card only when you can cover the cost means that you effectively have a bill that you can always afford on time and without sacrificing too much.

Debt forgiveness is also an option, although this option depends on getting the blessing of the creditors attached to that debt.

In light of recent events, the requirements for this have become temporarily more lenient, so outstanding debts aren’t quite as crippling as they might be otherwise.

Savings

A savings account is a vital tool in the quest to take control of your finances. There are a few reasons for this. A savings account will be the first place you can turn in the event of emergency situations.

When you’re otherwise out of money, anything in your savings can make a huge difference when the unexpected happens. More importantly, a savings account does what the name implies by helping you save money over time.

This is approached from two different angles, first of which is simply providing you with a dedicated space for the purpose of accruing money. Savings accounts are separated from checking accounts, and this divide makes it just inconvenient enough to spend your money that you’re more likely not to feel tempted. This alone can make a big difference.

A savings account typically increases in value passively over time in the form of interest. Interest is periodically added to your savings, and the amount added is based on your existing balance.

In other words, the more money you have, the more you’ll get as an added bonus. Interest rates vary from bank to bank, and finding the highest rate can be even more beneficial.

Budgeting

It can be hard to find enough extra money to put into your savings, but it’s easier than you think. By calculating your current spending, you can then create a budget with the goal of reigning in your spending habits in order to make the most of the money at your disposal.

other valuable tips:

College is often a time for partying, but taking this too far can cost you a lot more money than you realize, so start keeping track of the money you spend on recreation. Likewise, convenient food options tend to be a devil’s bargain. Cooking your own meals and avoiding name brand products are both great ways to save money on keeping yourself fed, and these actions are also much healthier.

Saving money in college can be difficult. Most college students have little to no prior experience with money, and that makes the experience feel like being thrown into the deep end. However, these tips will help you stay afloat by making more informed financial decisions that will stick with you.

Image Credit: save up money for your first car by envato.com

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