Car Expenses
Most people are in a situation where they need to own a car. People
have become so accustomed to this that they donít even think about
the expenses that come with owning a car. When you take a loan for
a car you should plan on having that car longer then the loan term.
With that said, you also need to plan on paying for maintenance for
the car, even years in advance.

I want to tell you how you can keep yourself out of debt with cars.
This is really something that should start on the first day you own
any car. Open a savings account for car maintenance. This is not
about the car payment, but about future money you will have to
spend on the car. I call it a car repair fund. You should immediately
start putting money in this account every pay check. You will need
tires, breaks, and oil changes in the future, and who knows what
else. If you canít afford much, just start with five dollars per pay
check but this account serves another purpose as well. If you do pay
your car off, then take that whole payment and start putting it into
this account. This will become your down payment for your next car.
If you have any repairs made to your car, withdraw money from this
account to cover the repairs. Aside from your car payment, just to
drive and maintain a car is extremely expensive, but even so,
making repairs to a car that is paid off is usually much cheaper than
making a car payment. Be very mindful when you finance a car. You
should always get at least two years of paid off service from any car
you buy otherwise you are flushing a lot of money away that you
could use in other areas of your life. If you learn to limit your
surprises by being prepared, your life will be a lot less stressful.
How stressful is it when you find out you have a six hundred dollar
car repair bill? One other benefit you will get by doing this is that
you will keep up with your car maintenance better, and in most
cases you will have a car that lasts longer and is more enjoyable to
drive.

When buying a car, the loan term and payment should be your
determining factor for if you can afford to buy any car. Maybe you
can afford that payment right now, but with a long loan term; four
or five years later when you need a new car again, you will be losing
from the very start and this cycle will only get worse over time.
(P.S. The three thousand dollars you are getting offered for your
trade in was already built into the cost of the new car you are
buying. Donít fall for that, always get a price before you let them
know about your trade, also donít negotiate the payment, negotiate
the price of the car.)

Bottom line is; Cars can drain an unbelievable amount of money
from your monthly income, and if youíre not careful with financing
you will be up to your eyeballs in debt. Also keep in mind that when
you set up funds for a specific purpose, you need to keep your eyes
off of that money until you need it. So put this money in a place
where you will not be looking at it, and it will be there when you
need it the most.

A car is usually the first large expense someone has in life, so it is
probably the best example to show someone how to create targeted
savings funds. Some other great examples to use this method is a
Christmas fund, tuition fund, or vacation/amusement fund. Stop
going into credit card debt every year for these things, and just
build them into your budget. Your main savings account might grow
at a slower pace, but you will soon realize that you rarely will need
to touch your savings and in the long run you will save more money.