The initial cost of a car plus its ongoing maintenance can dry up your bank accounts real quick. As a result, most people end up defaulting on their car lease while others manage to hang on to it for years but without any retirement nest saved up in the end. Keeping your toys shouldn’t mean sacrificing a comfortable retirement lifestyle. Here are five things you can do to stockpile some money for those rainy days while paying off your car expenses.
Maintain it Yourself
Or at least learn the bulk of the parts and systems you can safely maintain yourself. For example, your car needs a filter change every year or every 12,000 miles, whichever comes first. Most car owners pay a mechanic to change the air filter, which is a fairly simple process that can be done at home in less than 15 minutes.
Another part you can change yourself is the windshield wiper. Again, a vast majority of car owners are lured in to deals offered by local auto parts stores which tout a free installation included when you buy one of their stocked wiper blades, which coincidentally is also the most expensive brands on the market.
Last but not least is the regular oil change. Car professionals suggest giving your car an oil change every 3,000 miles. But with more advanced car systems and better quality components being introduced to the automotive industry, it’s safe to change your car’s oil after twice that mileage. Be sure to practice proper safety measures when getting under your car’s hood to change its oil. For instance, never change it when the car’s engine is still hot.
Offer Your Services
If you have free time during the day, whether you’re a student or a part-time employee, it makes strategic sense to offer your car and driving services to earn extra cash. Carpooling is perhaps one of the simplest ways to lower your gas consumption. If you have friends or coworkers riding the same route or going to the same place, offer to carpool them in exchange for splitting the weekly or monthly gas bill.
Working as an Uber or Lyft driver is also a good way to save money while keeping your car. Though it will cause your car’s mileage to quickly jump up, you get to drive it to new places, meet new people, and make some money in the process. Aside from the income you get from this side gig, many private car rental companies now offer many perks for its drivers, such as discounts on phone bills, roadside assistant services, and prescription refills.
Finance it the Right Way
One of the many advantages of financing large purchases is that it spreads the financial impact throughout a longer time frame, making the expense more bearable and avoiding the need to make drastic lifestyle changes. If possible, try to pay your car loan earlier than the original date.
If you have the money to do so, you should pay off monthly payments every other week. For example, if you have a 5-year loan worth $20,000, you will pocket only around $80 from interest savings, but then you repay the loan in four and a half years instead of a full five years. That six months worth of financial savings can be used to build wealth through investments or just to finance another big purchase.
Another technique to consider is rounding up your payments. Rather than just paying the recommended monthly amount, round it up to the nearest $100 or $50. You won’t feel the financial impact of paying more towards your car loan, but it will definitely achieve the goal of repaying the loan faster.
Keeping those liabilities seem financially unwise. But with proper planning and smart money management practices, you can enjoy your toys while keeping a decent amount of money saved up for emergencies and future financial needs.