HOW TO SAVE FOR YOUR FIRST CAR
How much should you spend on a new set of wheels? Before you start kicking tires, it’s important to set a budget, shop around, and work out the best
financing option.
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Keeping track of your spending keeps you on track. It's that simple.
Setting up and using a budget involves six basic steps:
A budget is personal. There is no single format that suits all circumstances. Nevertheless, every good budget has certain basic features that make it work:
How you actually set up your budget is a matter of personal choice and preference. To help you with the format, we suggest using the model “Budgeting Basics: The Workbook” available from your credit union.
When you sit down to draw up a budget and over the months as you record new entries, keep in mind three rules or requirements necessary to the success of your budget:
Consider including the following items in your budget:
Once your budget is complete, you can calculate the difference between your expenses and income – the amount of discretionary income you have left. Discretionary income represents the bottom line in more than a physical sense. It is, in effect, a measure of the success of your budget. The whole point of budgeting is to control your spending so that you keep back an increasing proportion of your income for your personal financial goals.
It is important to note how realistic your budget is and how successful you have been in keeping to it over the course of the year. Record the difference between your budget estimates and your actual spending. A consistently wide gap between the two figures could indicate your original estimates were too high or low, or that you are overspending. A budget review will be helpful to you in planning a new budget for the next 12 months. You should also review the monthly expense record and, if you have overspent, identify the items that threw you off budget. Be patient. It will take a little time to get used to controlling your spending. But working with a budget can become an easy, automatic habit.
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Your Neighbourhood Credit Union (YNCU) is a licensed credit union operating in, and under the laws of, the province of Ontario. The Financial Services Regulatory Authority of Ontario (FSRAO) provides insurance coverage for our member's deposits.