For many young students and graduates their first introduction to adulting starts when they make a decision to buy their first car. This can be a daunting experience as car ownership involves many additional expenses such as fuel, insurance and maintenance which can all impact monthly budgets and cash flow.
Becoming independently mobile can be an exciting prospect, but buying a car is also a long-term commitment so it’s important to understand the economics involved. These tips from WesBank will help navigate the decision-making and buying process and ensure that students and graduates are better equipped in their financial journey:
Track your income and expenses: This means understanding exactly how much you make versus how much you spend. Draw up a detailed budget including income and expenses to determine what you can realistically afford to spend on a car. As difficult as it may be, stick to your budget.
Spend less than you make every month: A budget is important as it helps to ensure that you spend less than what you make each month. If you do not track your spending, it can be easy to overspend and ultimately end up in a debt situation that’s difficult to overcome.
Minimise on lifestyle inflation: Being young often means high pressure to go out and socialise, or buy the most expensive items of clothing and gadgets, instead of saving towards bigger purchases, like a personal vehicle, a house, or for emergencies. It’s important to be aware of your entertainment needs, and identify other less expensive