35 Ways to Save For a Car or Another Major Purchase

Saving to buy a car is a major undertaking but success is perfectly possible with a bit of planning and effort. Three strategies can be used to build up a car fund: saving regularly and as soon as you receive your paycheck, spending less and putting the savings in the car fund, and earning more.

Before you start your savings plan, you need to decide what car you are aiming to buy. To help you reach a decision, think about the price and features of the car that you like, but also think about the potential costs involved after you have bought the car. For example, how much will the car insurance cost? How much gas does the car use? Does the car have a reputation for reliability and low repair costs?

Once you have a car in mind you can decide how much you will need to save each month or each pay period.

1. Decide on the amount that you will place in your car fund from each paycheck and the amount that you will place in your emergency fund. Even while saving for a car you need to keep building up an emergency fund. Your don’t want to spend all your savings on a car and then be faced with an emergency which you can’t pay for.

2. Your bank may offer the option to automatically transfer money from your checking account to your savings account at regular intervals. If this option isn’t available, transfer money into your car account and your emergency fund as soon as you deposit your paycheck in the bank.

3. Try to set up separate savings accounts for your car fund and your emergency fund. If you have only one savings account, set up a table with pen and paper, a worksheet in a spreadsheet program or use budgeting software to separate your savings into different “virtual” accounts.

4. At the end of every day, empty all the change except for a dollar (or other predetermined amount) out of your wallet.

5. Buy coin collectors at a dollar store and fill them with coins from your wallet. As soon as the coin collectors are full deposit the money in your car account.

6. Never think that it’s not worth saving a few pennies! Pennies saved regularly will add up to make dollars.

7. Find extra money to add to your car account by spending less. Put the money that you would usually spend into your car account.

8. Stop bad habits like smoking and buying junk food to save money and your health.

9. Make your meals at home instead of eating in restaurants or buying prepared meals.

10. Buy nutritious but cheaper food. For example, have more beans for protein instead of meat.

11. Don’t buy designer coffee. Make coffee and tea at home, and buy plain varieties, which are cheaper than flavored kinds.

12. Take advantage of coupons to buy cheaper groceries, cosmetics and toiletries. Make sure that when you use a coupon it’s to buy something that you would have bought anyway, and that you’re not buying the item just because you have a coupon for it!

13. Use the savings cards or point cards that are offered by some stores, as long as the cards are free. As with coupons, make sure that you don’t buy something that you don’t really need just because a card saves you money on the item.

14. Save flyers from community newspapers and buy items that that you need when they are on sale.

15. Buy drug store brands of medications like vitamin supplements and anti-histamines. If you read the ingredients carefully, you’ll often find that the cheaper drug store brand product has exactly the same ingredients in exactly the same concentrations as the more expensive brand name product.

16. Experimenting with the latest cosmetics can be very expensive. Stick with one set of cosmetics that you like.

17. If you have access to the Internet, do you really need newspaper or magazine subscriptions? Many newspapers and magazines have websites that show the latest news and information. Some public libraries subscribe to a website that puts newspapers from around the world on the Internet on the same day that they’re published. You can read these newspapers from the comfort of your own home if you are a member of the library. Visit your local libraries in person – they may have printed copies of your favorite magazines.

18. Take advantage of your local public library for free education and entertainment. Newspapers, magazines, books, CDs, DVDs and Internet access are available.

19. If you travel by public transit, buy passes or fare saver tickets to save money.

20. Don’t buy an expensive cell phone plan, or don’t renew your contract if you already have one. Instead, choose a cheaper plan or use your phone on a prepaid plan.

21. Think about whether you still need a landline for phone calls if you have a cell phone.

22. Use free options like Skype for some or all of your long-distance communications.

23. Use freeware or open source programs on your computer instead of buying expensive software.

24. Downgrade your cable television package, especially if it includes many stations that don’t interest you, or cancel your cable plan.

25. Cancel your gym membership and choose less expensive ways to exercise.

26. Reduce energy costs in your home by turning off lights that aren’t needed, using energy-efficient light bulbs, using cold water in clothes washing machines and turning down the thermostat at night and when you will be away from your home for a long time (unless you have pets that need to be kept warm).

27. Save and file all receipts carefully for your tax return. Read your tax information booklet carefully to ensure that you get all the tax refund that you are entitled to.

28. Hold a yard sale and sell anything that you don’t use or don’t need.

29. If you have space in your home, consider taking in a boarder.

30. If you have the time, get a part-time job such as babysitting or newspaper delivery. If you have a special skill, you may be able to teach evening classes, offer academic tutoring services or teach a musical instrument.

31. Don’t forget to recycle bottles, cans and juice boxes to get your deposit returned.

32. Post a photo of your future car in a prominent place, or post inspirational quotes about saving where you will frequently see them.

33. Consider making saving and frugal living part of a new lifestyle.

34. Find less expensive but still satisfying purchases and activities to replace your old habits so that you don’t feel deprived, or your new lifestyle is unlikely to be successful in the long term.

35. If the thought of permanently eliminating designer coffee or another treat from your life makes you miserable, then don’t do it. Instead, limit your luxury coffee or treat to once a week (or once a month for more expensive purchases) and make it a special event. Enjoy the ambiance of your favorite coffee shop, socialize with friends, and go for a walk in a pleasant and interesting area afterwards.

Why go back to your former, more expensive lifestyle now that you’re used to saving? You can continue to save for another major purchase, for a vacation, or to add to your emergency or retirement funds, for example. A frugal lifestyle can still be satisfying if it's well planned!