How to save for your first car
Four ways to make your money work for you.
Buying a car is the number one goal for a lot of people but it can sometimes feel out of reach.
After all, it’s hard to save money when you have a casual job and your hours change every week.
RACQ’s Education Team found 48% of Queensland high school students were planning to save the entire amount needed to buy their first car and 32% were planning on splitting the cost with their family*.
Whether you’re planning to save by yourself or get your parents to chip in, here’s some ways to make your money work for you.
These tips can also help you with other big expenses like going on a holiday with friends or moving out of home.
Pay yourself first
Most of us know having savings is a good idea but only about 50%* save money regularly.
RACQ Manager Education Rhonda McKenzie said changing how you think about savings could help you to reach your goal sooner.
“Putting money aside for savings can sometimes feel restrictive, especially if it means you’re missing out on doing something with friends,” Rhonda said.
“Adding a set amount to your savings each time you get paid is paying yourself first.
“Think about the freedom that will come from having your own car and what it will be like to go on road trips and adventures with friends – by paying yourself first, you’re one step closer to making that dream a reality.”
Protect your savings
If you find yourself dipping into your savings for things that aren’t related to your goal, you’re not alone.
Almost 60% of the young people surveyed ended up using some of their savings to buy something else* but there are a few things you can do to protect your savings.
“Try making your savings harder to access,” Rhonda said.
“That could mean putting your savings in a different bank to your usual one and leaving the debit card at home.
“Don’t download the bank app for your savings account so you’re not tempted to transfer money while you’re out.”
Change how you see your money
What’s the first thing you’d do if you got some bonus money from working an extra shift, your tax return or birthday money?
It can be tempting to treat ourselves when we have a bit of extra money but consider putting some, or all, of it into your savings. Adding a bit extra when possible could help you to reach your savings goal weeks or months earlier than expected.
Track your spending
Technology, like tap-and-go and digital payments, makes our lives easier but it can also mean we spend more than planned.
“This unconscious spending sucks our savings dry and prevents us from saving,” Rhonda said.
“Lots of little purchases can really add up so consider making a list of all your financial commitments, such as your phone bill, food, sport costs, and taking a look at where your money is actually spent.
“By seeing where our money really goes, we can get an honest understanding of our spending habits and find ways to divert a bit of that money to savings.”
If you find you often regret your purchases, click here for some ways to help.
Source: RACQ Cash IQ Data 2020
The information in this article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in the document is general advice and does not take into account any person's particular investment objectives, financial situation or needs. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives, financial situations and needs.