I know a lot of you have been wondering… How long it will take to save for some freaking wheels in 2024!!
In 2023, the average down payment on a new car was nearly $7,000, and on a used car was around $4,100. So we’re going to use these numbers as guidance.
But bestie, you can OF COURSE save more than this. Did you know, that the more money you put down upfront the less your monthly payment will be?
That’s a bonus 👍 for your monthly budget.
HERE’S THE BREAKDOWN
Using a $70,000 salary
(which would be $55,000 in take-home pay after taxes)
For this example, we are going to assume that your bi-weekly paycheck consists of $2,100.
Or 50% of your paycheck will go to necessary expenses, like housing, food, transportation, insurance, utility bills, etc.
20%, or less, is what you’ll use for fun, non-essential spending – like shopping, subscriptions, and dining out.
Another 20% should be stashed away for a rainy day. I know, I know, you want to get that car ASAP! But gf, what are you gonna do when you need new tires or your spark plugs go out! Use 20% of your paycheck to save for emergencies to prevent more credit card debt in the future.
And finally…
or 10% of your paycheck, or $420 a month, is the amount you’ll use to fuel your “Buy a Car” savings goal.
If you were to start saving for the downpayment today, it would take you:
🚙 10 months for a used car ($4,100 down payment)
🚗 17 months for a new car ($7,000 down payment)
Now… I know what you’re thinking. Saving for that many months will feel like this:
So you need to hide the money from yourself!
Prevent yourself from dipping into this fund and de-railing your progress by opening a high-yield savings account to deposit the money into.
HERE’S THE THING:
When I first started my financial journey, I WASN’T EVEN CLOSE to these ratios. You don’t get to 50/20/20/10 overnight… it takes MONTHS of consistency to reach that level of discipline with your finances.
But even if you aren’t within these ratios, you can finally feel RELIEF that you know:
A) How long it will take you to achieve this goal, and
B) How much money you “should” be saving each month
My life is so much better when I live within my means and put money toward my future self every. damn. month!
As I was working towards the 50/20/20/10 ratios in my own finances, I also built The Money Organizer which has become my best-selling Google Sheets budgeting template.
What makes it so special is that you input your income/ spending and it shows you how close you are to the 50/20/20/10 ratios. No literally- it will do the math for you & makes organizing your money really easy.
So if you need some extra help, I recommend using my Money Organizer to figure out your ratios for you so that you mark your calendars for when you plan on buying that car!
