Gap Years: Why You Should Try To Save For Your First Car
A gap year is a year-long break that high school graduate students take before they proceed to post-secondary education. With the increasing amount of student loan debt, more students are taking gap years more than ever.
There are many benefits to taking one. It gives you time to evaluate what you really want to do, what school you want to go to, whether you really need a four-year college degree or want to take vocational education.
In addition, having a gap year means you can take jobs that allow you to earn some income --Income that you can use to pay for experiences or things needed to facilitate your exploration. For some, this thing can be a car. Most high school graduates see owning a car as a rite of passage into young adulthood.
It doesn’t have to be the most expensive car in the market. Anything under $10,000 is good enough. Heck, some even get away with paying only $1,000 for a used car. If this is one of your goals during your gap year, keep reading. We’ll share with you the steps you can take to achieve just that.
1. Open a savings account
If you already have one, great. But if you don’t, open one right now. This is where you’ll be putting away money you earn to save up for that car. You may need your parents’ or guardian’s help to open an account.
Opt for accounts that don’t have a minimum balance requirement or a monthly fee. Banks can be sneaky and charge you a fee even if you go under a penny below their balance requirement. Every single dollar counts so make sure you pick wisely. There are also online savings accounts you can look into. They typically have higher interest rates which can help you save up faster.
2. Set a goal
How much will your desired car cost? This is the amount you’ll need to save up. If you just want to find a used car in your area, you may not need to save up as much.
However, if you’re looking into getting a brand new one, expect to pay more. Of course, certain factors will affect how you’ll be able to afford the car.
You may need to get multiple jobs, start a side business, or ask for your parent’s help. Whatever it may be, it’s good to be realistic about your goal so you don’t end up feeling disappointed with what you get.
3. Start saving
Any money you have, start putting that in your savings account. The great thing about banks nowadays is that you can automate certain transactions.
Let’s say you’re earning an income every month. You can link your direct deposit account to your savings account so that it automatically transfers a certain amount every month. Put away whatever you can and you may be able to buy that car sooner than you think.
This is the most important step in saving for a car. Remember, the money you earn will not just go towards your savings. You need to think of other expenses too.
Maybe you’ll want to hang out with your friends during weekends. That’s going to cost you.
Planning a trip abroad? Those flights aren’t going to pay for themselves. Want to go shopping? Maybe consider thrifting. It’s much cheaper.
These are expenses you need to account for. Learn how to prioritize your spending. Focus on your goal and cut down on other unnecessary expenses. When you do, you’ll get that car even before the gap year ends.
Saving up for a car during your gap year can be a worthwhile goal. Aside from the convenience of owning a car, the process of acquiring one teaches you how to manage and discipline yourself --skills that are very valuable in the real world.
What car model are you thinking of saving up for your gap year? Share your thoughts in the comments below.