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Saving to Buy a Car: How to Accumulate Disposable Income

Posted July 7, 2013 by Laura Louise Cole to Frugality 2 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

The current pensions crisis has emerged as a global epidemic, and one which continues to impact on numerous factions of contemporary society. The UK and the U.S. have been particularly badly hit, with an estimated 15% of British pensioners accumulating just £8 of disposable income each week after paying for everyday living costs. When you consider that this is less than the average 11 year old earns in pocket money each week, you begin to get a clearer understanding of the issues facing those who have completed their professional working lives.

Even more worryingly, however, the failure to save is also becoming more pronounced among younger social demographics. Rising inflation and a falling average wage is commonplace in both America and the UK, while the creation of part time, low paid jobs is sustaining the economy while causing the ranks of the rising poor and underemployed to swell considerably. This is set to have a huge impact on the global economy, and undermine any potential for long term growth.

How to Save and Fund a big Ticket Purchase in the Current Economy

While new car sales are currently booming in the U.S. and UK, for example, this is unlikely to be maintained unless the economic climate improves considerably. If you are looking to fund a big ticket purchase such as a car, you will need to adopt a frugal approach to living and strive to accumulate disposable income over a concerted period of time. Keep the following points in mind: -

Focus on Minimizing the Cost of Everyday Living: While the cost of individual food items and other weekly necessities may be minimal, when purchased in bulk they can represent a significant annual cost. It is therefore important to minimize these costs, as this will boost your weekly levels of disposable income and create a foundation for long term savings. As a starting point, you should consider using online coupon codes and real time price comparison tools to reduce the cost of grocery shopping, while reducing your energy consumption can also deliver regular financial savings.

Create a Detailed and Precise Budget: When it comes to buying a car or saving towards an alternative big ticket purchase, it is important that you create a detailed and precise budget. After all, a large individual expenditure can significantly disrupt your spending patterns, and it therefore needs to be managed extremely carefully. Deducting your regular fiscal outgoings from an established monthly salary, a budget can determine your levels of disposable capital and help you to plan how this should be invested. When you create your budget, it is important to work in pence rather than pounds and adopt a precise approach to managing your finances.

Identify the Most Affordable Purchasing Option: Even with an established budget in mind, it is important to identify the most affordable car and financing package available. This will help to minimize the cost of ownership over time, as you factor in additional factors such as insurance, maintenance and taxation. Your first responsibility is to select the most suitable financing option, while you should also use a reputable car loan calculator to gain a greater understanding of your future liability. When it comes to executing the purchase itself, do not be afraid to negotiate with lenders and use alternative offers as leverage to lower costs.


About Laura Louise Cole: This article was written by Laura, who is a financial expert with experience of the UK and U.S. markets. To understand the full cost of financing your vehicle purchase, visit  carloancalculator.org today.

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