Financial planning to buy a car: how to do it?

Learn how to plan your finances to buy a car!

Financial planning to buy a car requires effort, dedication and goal setting!

Without self-control, new costs will arise, and this increases the difficulty in saving.

To help you, we will show you the step-by-step financial planning process for buying a car. 

However, remember that in addition to the vehicle, you will need to think about expenses such as gasoline, taxes, insurance, among others.

Are you interested in learning more about this topic? Keep reading!

What is financial planning?

Financial planning is the organization of personal finances.

It is in this plan that you will list your main income and expenses, as well as your goals, whether they are short-term or long-term. or long term.

However, one of the main pillars of this tool is discipline.

In other words, there is no point in putting together a plan and not applying the strategies, or following them for just a week or a month.

If you are saving to buy a car or high-value asset, planning becomes even more essential.

After all, this tool will help you create strategies to increase your earnings, save and invest.

How to create a financial plan to buy a car

As you can see, financial planning is an essential tool for organizing your savings.

But how to create one plan to buy your first car? What really needs to be done?

That's what you're going to find out now! Check it out:

1. Know all your expenses and income

This is the first step to creating a financial plan. 

Whether in a finance app, an Excel spreadsheet or in a financial notebook, writing down all your expenses and income is an essential step.

Without knowing how much you can actually spend or save, it becomes much more difficult to get organized.

All expenses and income, no matter how small, should be listed. This way, you will know exactly where your money is going.

After finishing this part, you can think of other strategies to save money and, thus, buy your dream car!

2. Organize your finances

Once you have recorded all the money coming in and going out of your account, identify some cuts you can make to your budget.

Ideally, you should include an amount in your plan to invest in your car. Set this money aside in an application dedicated to this purpose.

In the first stage of planning, you will understand exactly what your main monthly expenses are.

See if there is a possibility of eliminating some of them.

Of course, there are expenses that cannot be eliminated. However, since we are talking about a big goal, it is essential that you identify non-essential expenses that can delay your dream of buying a car.

3. Understand your financial profile

Each person has a different financial profile.

It is made up of our aversion to financial loss, our investments and debts.

Obviously, no one wants to lose money. However, some people are willing to take more risks than others, as long as there is a good chance of winning.

Understanding your financial profile will also help you create the best strategy.

4. Eliminate 100% of debts

Purchasing a car involves many costs, some of which are quite expensive.

Therefore, if you are in debt, it is best to resolve this problem before making the purchase.

Compound interest can increase your debt in a short period of time, which will disrupt your financial organization.

However, do not settle all your debts without first attempting to negotiate.

There is a chance that you may be able to pay off your debts at a good discount, so try to negotiate first.

This way, you can organize and plan better, as well as, of course, have more peace of mind in your day-to-day life.

5. Make an emergency fund

An emergency fund is essential for anyone.

In case you don't know, the reserve, or emergency fund, is exactly what the name suggests: money that should be used during financial unforeseen events.

Ideally, you should have a reserve that can cover your monthly expenses for at least six months.

With the reservation, you will be able to carry out your financial plans with much more peace of mind.

6. Evaluate the need to purchase a vehicle

As we said, in addition to buying the car, you will have to bear several other expenses.

For this reason, it is essential to plan as much as possible before purchasing a vehicle.

Think about whether it is really necessary, whether it will help you to be more practical in your day-to-day life, or whether it will only be used when traveling and on weekends.

Assess whether you can afford all the expenses involved and whether the car will not be just another monthly expense, without much use in your day-to-day life.

Obviously, for many people, a car is essential, whether because they live far from work, take their children to school, work as a ride-sharing driver, among others.

If you identify with one of these cases, consider buying a used vehicle.

This way, you achieve your goal and your needs while saving money.

7. Don't leave all your money in savings

Saving is essential for anyone thinking about buying their first car.

But to achieve this goal a little faster, think about the possibility of making financial investments that are as safe as savings, but offer a higher return.

A good example is digital banks, which yield 100% of the CDI. There is also the possibility of investing in Treasury Direct bonds or other fixed income investments, such as CDB, LCI and LCA.

Conclusion

We hope that with these tips, you can organize yourself better, so that you can create a financial plan to buy a car.

But don't forget that to be effective in planning, you need to have focus, discipline and motivation!