{"id":2591,"date":"2022-01-19T22:43:51","date_gmt":"2022-01-20T04:43:51","guid":{"rendered":"https:\/\/going-places.thegeneral.com\/how-to-budget-for-a-car\/"},"modified":"2025-08-27T12:49:36","modified_gmt":"2025-08-27T17:49:36","slug":"how-to-budget-for-a-car","status":"publish","type":"post","link":"https:\/\/www.thegeneral.com\/going-places\/blog\/car-and-driving-basics\/how-to-budget-for-a-car\/","title":{"rendered":"How to Budget for a Car"},"content":{"rendered":"\n<p><span data-contrast=\"none\">While\u00a0putting money aside for a car can\u00a0feel\u00a0unnerving,\u00a0saving a little bit here and there can help make the process\u00a0go smoothly.\u00a0<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/buying-a-car-during-tax-season\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Buying a car<\/span><\/a><span data-contrast=\"none\">\u00a0is a worthy investment, and if you plan\u00a0on financing\u00a0a vehicle, it helps to save extra cash to put towards a larger down payment.\u00a0Finding a budgeting system\u00a0that\u2019s\u00a0right for you\u00a0is\u00a0a great way\u00a0to keep\u00a0track of your funds\u00a0and start saving.\u00a0Keep reading to learn how to save for a car by\u00a0creating a budget and doing your research.\u00a0\u00a0\u00a0<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-make-a-budget\"><b><span data-contrast=\"none\">How to Make a Budget<\/span><\/b><\/h2>\n\n\n\n<p><span data-contrast=\"none\">A budget is a&nbsp;financial plan that tracks how you spend and save money.&nbsp;Budgeting takes a little extra work and commitment, but it can&nbsp;reduce stress and make you more aware of your spending habits.&nbsp;Finding a budgeting&nbsp;plan&nbsp;that\u2019s&nbsp;right for you&nbsp;is the first step towards&nbsp;saving for a car.&nbsp;&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-different-budgeting-plans\"><b><span data-contrast=\"none\">Different Budgeting Plans<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">There are many different schools of thought when it comes to budgeting,&nbsp;so explore all your options&nbsp;and see what sticks.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-50-30-20-budgeting-system\"><b><span data-contrast=\"none\">The 50\/30\/20 Budgeting System<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">One&nbsp;of the most popular&nbsp;budgeting&nbsp;methods&nbsp;is the&nbsp;50\/30\/20&nbsp;method.&nbsp;This method promotes spending 50% of your income on things you need, 30% on things you want, and putting 20% into savings. Necessities are things you&nbsp;require&nbsp;to live and work, while&nbsp;\u201cwants\u201d are&nbsp;indulgences that&nbsp;improve&nbsp;your quality of&nbsp;life.&nbsp;While using this&nbsp;budget, if your needs exceed 50% of your income, you might need to dip into the&nbsp;\u201cwants\u201d&nbsp;category&nbsp;temporarily. The&nbsp;remaining 20% of your income&nbsp;can go&nbsp;into your savings account (for a&nbsp;<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/buying-a-new-car\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">new car<\/span><\/a><span data-contrast=\"none\">) or be put towards debts. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-envelope-budgeting-system\"><b><span data-contrast=\"none\">The Envelope Budgeting System<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">This system makes it easy to cut down on superfluous spending without creating a plan for every dollar you earn. To try it, set a spending limit for your monthly expenses and fill designated envelopes with the allotted amounts in cash. For example, estimate your monthly grocery budget and put the cash amount into an appropriately labeled envelope. Take money out of the envelope before you hit the store, and once the envelope is empty, try not to spend any more on groceries during that month. The tactile sensation of cash gives you a better idea of how much you\u2019re saving, as opposed to using something less tangible like a credit card.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-pay-yourself-first-budgeting-system\"><b><span data-contrast=\"none\">The Pay Yourself First Budgeting System<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">If your primary financial goal is to save enough money for a car, then this budgeting system may be a good fit for you. The pay yourself first plan, also known as&nbsp;the&nbsp;\u201creverse\u201d budget, prioritizes savings over current expenses. To try this system,&nbsp;designate&nbsp;a&nbsp;monthly amount to be deducted from your paycheck and put straight into your savings account.&nbsp;Spend the&nbsp;rest of your income&nbsp;on&nbsp;monthly&nbsp;expenses&nbsp;and&nbsp;additional&nbsp;purchases.&nbsp;This budgeting system&nbsp;works&nbsp;for&nbsp;people who&nbsp;prioritize&nbsp;one area of their finances instead of budgeting for every expense.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-zero-based-budgeting-system\"><b><span data-contrast=\"none\">The Zero-Based Budgeting System<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">This&nbsp;budget&nbsp;is perfect&nbsp;for&nbsp;meticulous planners who want to account for every dollar they make.&nbsp;With this system, spend or save all the money in your monthly paycheck mindfully until there are zero dollars left. This involves logging every expense using pen and paper or a budgeting app, such as YNAB or&nbsp;EveryDollar. Pay for necessities, like bills and groceries,&nbsp;then&nbsp;set&nbsp;money aside&nbsp;for future purchases or savings.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-save-for-a-car\"><b><span data-contrast=\"none\">How to Save for a Car<\/span><\/b><\/h2>\n\n\n\n<p><span data-contrast=\"none\">Now that&nbsp;you\u2019ve&nbsp;decided on a budgeting system,&nbsp;it\u2019s&nbsp;time to start putting money aside for&nbsp;your&nbsp;car.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-calculate-your-down-payment\"><b><span data-contrast=\"none\">Calculate Your Down Payment<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">Decide how much you want to put towards your future down payment. Paying a larger down payment upfront will lower your auto loan and subsequent monthly payments. Fewer monthly payments mean fewer interest payments and more savings over time.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-contrast=\"none\">Explore different&nbsp;vehicles&nbsp;you\u2019re&nbsp;interested in&nbsp;with&nbsp;financing options that meet your monthly budget. Compare different models to see if your down payment budget is realistic. Once&nbsp;you\u2019ve&nbsp;established&nbsp;a price range,&nbsp;you\u2019re&nbsp;ready to calculate your down payment. Aim for a 20% down payment on a new&nbsp;car&nbsp;and a 10% down on a&nbsp;<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/buying-a-used-car\/\"><span data-contrast=\"none\">used&nbsp;car<\/span><\/a><span data-contrast=\"none\">.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-create-a-budget\"><b><span data-contrast=\"none\">Create a Budget<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">Choose a budgeting plan and try to stick to it, even if it means saving more and spending less.&nbsp;Don\u2019t&nbsp;forget to budget for things like&nbsp;<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/different-types-of-gas\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">fuel<\/span><\/a><span data-contrast=\"none\">, car payments,<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/car-insurance-policy-guide\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">&nbsp;insurance<\/span><\/a><span data-contrast=\"none\">, and maintenance costs. Experts suggest that the sum of your car-related expenses&nbsp;shouldn\u2019t&nbsp;exceed 20% of your total income.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-start-putting-money-aside\"><b><span data-contrast=\"none\">Start Putting Money Aside<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">Creating&nbsp;a specific car-savings fund&nbsp;makes it easier to track your&nbsp;progress towards your down payment, and it makes it harder to dip into those savings for unrelated purchases. You can automate&nbsp;your&nbsp;savings&nbsp;so a&nbsp;portion&nbsp;of your paycheck is&nbsp;allocated&nbsp;to your account every month.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-sell-or-trade-your-car\"><b><span data-contrast=\"none\">Sell or Trade Your Car<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">If&nbsp;you\u2019re&nbsp;saving to replace your vehicle,&nbsp;now&nbsp;is&nbsp;a great time&nbsp;to sell or trade&nbsp;it in&nbsp;and put the&nbsp;money towards your new car.&nbsp;Estimating&nbsp;your car\u2019s value using online appraisal tools&nbsp;will give you&nbsp;an idea of how much&nbsp;savings&nbsp;you\u2019ll&nbsp;have after the sale.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-shop-around-for-affordable-insurance\"><b><span data-contrast=\"none\">Shop Around for Affordable Insurance<\/span><\/b><\/h3>\n\n\n\n<p><span data-contrast=\"none\">If&nbsp;you\u2019re&nbsp;looking&nbsp;for an affordable policy for your new vehicle, The General has a policy for you.&nbsp;We\u2019ve&nbsp;specialized in&nbsp;<\/span><a href=\"https:\/\/www.thegeneral.com\/quote\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">affordable&nbsp;car insurance<\/span><\/a><span data-contrast=\"none\">&nbsp;for over 60 years, and we&nbsp;recognize that drivers with&nbsp;imperfect credit and driving records&nbsp;still deserve quality coverage they can afford. Read some of our&nbsp;<\/span><a href=\"https:\/\/www.trustpilot.com\/review\/thegeneral.com\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">five-star reviews<\/span><\/a><span data-contrast=\"none\">&nbsp;to see how we put our customers first or read more about&nbsp;finance&nbsp;on our&nbsp;<\/span><a href=\"https:\/\/www.thegeneral.com\/blog\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">blog<\/span><\/a><span data-contrast=\"none\">.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">&nbsp;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn how to budget for a car with this in-depth article from The General. Learning how to save for a car can make the car-buying process a lot smoother.<\/p>\n","protected":false},"author":7,"featured_media":2592,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[55],"tags":[],"class_list":["post-2591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-car-and-driving-basics"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to Budget for a Car | The General<\/title>\n<meta name=\"description\" content=\"Learn how to budget for a car with this in-depth article from The General. 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