How to Set a new Car Budget that Fits your Lifestyle
Setting a budget for your new car is no different than any other household expense. It should be within reason, in relation to your income, and your other normal expenses. It should also be determined by the size of the family and other priorities.It’s wonderful to daydream about that perfect car that you always wanted, and may actually be tempted to buy. However, if the monthly car payment exceeds all your other bills, and pretty much leaves you without funds at the end of the month, it may be time to reconsider. Having that perfect dream car and not having enough money to buy gas for it, somewhat defeats the purpose.Of course, if you are single, and your expenses are minimal, you may still have the option of indulging yourself a little. Even so, the normal rule of thumb is that the car payment should ideally not exceed 15% of your net monthly income. Other expenses and emergencies may crop up, and too many people have found themselves financially trapped by the very vehicle that they thought would make them the most happy.If you are buying a family car, extra caution is needed and more factors apply. Obviously, first, you are going to be choosing a vehicle for the whole family, and since families are expensive, you are going to need to factor in car payments along with utilities, insurances, groceries, and rent or mortgage. This is not the time to look for that dream car with the high monthly payments, even if you can somehow just find enough money to get away with it.The type of car you choose and how much you ultimately spend may also depend on your lifestyle, driving habits, and how many miles you travel on a weekly basis. Hybrids may be more expensive than some other choices, however, if you can afford it, you may see a fair amount of savings on fuel, and possibly a tax rebate. Electric cars, for singles, and those that have short distances to drive, may fit well into your budget as well.Whether it’s a house, a boat, or a car, no monthly payment should be included in the budget that takes precedent over everything else in your life. Loans that control where you go and what you do, quickly become burdens. In the long run, a vehicle is a tool that gets you from one place to another. While it is important to choose the best one for your needs, it is always a good idea to keep it a manageable part of your budget.
