A few weeks ago, I mentioned that one of our potential savings goals was to purchase a second car. Then when I posted my 2013 goals the other day, I let you all know that our main goal for the year was to pay cash for an almost new second car over the bathroom makeover.
An almost new car (hopefully small SUV) is going to cost us ton of money to pay cash for. So how in the world am I going to be able to save that much money in such a short time? Well, I’m not certain that I will, but I’ll definitely give it a go.
I did pretty good with my plan to save a lot of money, so I’m fairly confident I can save a substantial amount with my Second Car Save-a-rama. Yeah, I know I’m a dork, but it sounds more fun than saving for a car. Don’t you think?
I’m shooting for $13,000.00, whether or not I will get that close is still a mystery. I expect that between that and the free car (mentioned below), I will have enough for a new-ish small SUV. We’ll see, but I’m crossing my fingers.
Time Frame 2 Save
My stepdad is supposed to be retiring late this year, so that would mean that my parents would both move back to Washington. Which would leave them with an extra car, that they so graciously offered to me.
I know what you’re thinking…if your parents are giving you a free car, why are you going to buy one. Yes, I would be wondering the same thing. Don’t get me wrong, I very much appreciate them giving me a free car, but I want something newer and bigger.
Their car has 100,000+++ miles on it (triple + isn’t a typo, there’s a ton of miles) and seems to need repairs constantly. In our financial situation, we can’t afford to keep pouring money into a car that’s wasting out of life. Plus it seems smarter to get what I can for it while it still runs.
I’m also looking for something that will be better on my back and from experience, that would be something higher off the ground (ie: small SUV, regular SUV or a truck).
So I asked my mom if they would mind if I used the car as a trade-in (or even sell it) to help me get a newer one. She said that she didn’t mind, but I would need to check with her husband. I haven’t talked to him about it yet.
I’m almost certain that he would be fine with it so long as I had saved up the money to pay cash for the new car. He’s really into making wise financial decisions and wouldn’t encourage me to make stupid mistakes. If I had wanted to trade it in and then get a big car loan, he wouldn’t probably tell me to stop being a dumb*ss and use the car until I have more money saved (probably at least half or more).
So far, my mom is guessing that around the end of October, they’ll drive the car back to Washington. I’m hoping to have enough money saved by the end of October to get our second car. Yes, I know that’s less than 10 months away…but I have a plan.
What We Have Saved So Far
I’m using our Car Expenses Fund for our second car savings. We already had a little over $1,000 in it, that we saved in case we need to fix our current car or other car related stuff that we couldn’t afford from our paycheck.
I also have some other money set aside for a personal savings goal (no, it’s not for a boob job), leftover luxury spending money and a little bit of money that I made last year from blogging. I’m still debating whether or not I should just add all this to the second car savings or not…I probably will. But I’m not counting this until I actually add it.
We put the Christmas money ($300.00) we got from my parents in here too, instead of just buying more presents like we would normally do. Plus there is also the Christmas money ($50.00) from my grandma. I’m so happy that we saved the money this year, it’s a huge help toward our goals.
But wait…there’s more. My honey’s company actually gave him a nice little bonus this year for stepping up and taking over while his boss was (and still is) unable to work. They were really happy with him and sent him a handwritten card too (yes I save this stuff like a child’s report card). I’m so proud of him. After taxes and such were taken out, we had $461.94 to add to our second car savings.
Prior Car Expenses Savings: $1,054.63 (as of Jan. 1 2013)
Christmas Money Parents: $300.00
Christmas Money Grandma: $50.00
Bonus Check: $461.94
Total Saved So Far: $1,866.57
Still Need: $11,133.43
Okay, let’s get down to business now. How in the world am I going to be able to pay cash for a second car?
My parents told us that they were going to give us the last installment of our housewarming gift sometime in January. That is going to go straight into savings for our second car and will be $1,000.00.
Still Need: $10,133.43
Yeah, I know a lot of people don’t think it’s wise to have more money taken out of your paycheck than necessary, but we still do it. So whatever we get back from our taxes this year is going to be a nice addition. All of it. I’m expecting about $2,000, but it could be more or less.
This year we’re going to pay a professional to do our taxes to make sure that we get back as much as possible. I’ve been using Turbo Tax online and still totally love it because it’s so easy, but since we bought a house this year, I made money online and my husband got a couple of raises—it’s for the best.
Also, I really think that something weird is going on with the Oregon taxes; we don’t even live there…we shouldn’t be paying “that much” in taxes. Maybe the tax person can wave a magic wand and get that all sorted out too.
Still Need: $9,133.43
I recently made some changes and additions to our daily transfers that I have set up. One of those is to save $2.00 every weekday for our second car. So, if we just assume each month only has 4 weeks, that gives us 20 days of transfers. 20 days x $2.00 a day = $40.00 each month & $400.00 total by the end of October.
Still Need: $8,733.43
Anything we have leftover when payday comes is going to be added straight toward the second car. It’s not always a lot, but it adds up over time. I’m a big fan of starting each pay period with a fresh canvas anyway, so it’s not really much of a transition.
I’m still expecting this to be at least $250.00 over 10 months of bi-weekly paychecks, that’s 21 paychecks. As long as there are about 12 dollars in leftovers each paycheck, we’re good.
If we end up averaging $20.00 in leftovers each check, that would be around $420.00, $30.00 each check would be $630, $40 be 840, 50 be $1,050. You get the idea. Crazy how quick the little bits can add up, huh?
Still Need: $8,313.43 (using $20 average)
Optimally, we would save 100% over our root income each paycheck. Instead, I’ll shoot for 50% because there are other expenses coming up this year and who knows what else will pop up. Our current root income is $1,350.00 per paycheck. I’m not sure if there will be any upcoming opportunities for overtime or not, so this might not even matter.
Let’s just assume that on average, we’ll only be able to save $15.00 over our root income each check, that still equals $315 over the course of 21 paychecks. It’s the equivalent of working 2 extra days, which is sometimes very likely to happen.
Still Need: $7,998.43
The Extra Paychecks:
Getting paid biweekly sure rocks when you get that extra check twice a year. This year, the 3 paycheck months for us are May and November. Since we’re planning to get our second car around October/November, there might only be one extra paycheck before then. Although, depending on when the car comes, when we sell or trade it in and when we find the right car…we just might be able to take advantage of November’s extra paycheck. We’ll have to wait and see though.
Since there are still 2 weeks worth of regular expenses, we can’t save the whole paycheck. But we can save the mortgage and bill money—around $800.00. So this will end up being either $800 or $1,600 depending on the time.
Still Need: $7,198.43 (for 1 extra check)
Still Need: $6,398.43 (for both extra checks)
I will continue to use coupons on the things we normally purchase. Sometimes I slack on doing this, but I will make a concentrated effort to remember.
I’ve also starting using a new app on my iPad called ibotta, it’s similar to coupons, except you get the cash via PayPal instead of saving at the store. But you can still use coupons for the item at the store, double win.
All you do is choose which items you plan (or think you might) buy, complete crazy-quick activities for the item, buy it at the store and go home and scan your receipt and the bar code. I love this because I don’t have to have my iPad with me at the store (I only have wifi).
If you sign up on your tablet or smartphone through my refer a friend link, you will earn a $5 bonus *promotion ends this Thursday night at midnight* after you complete your first offer (and I get a dollar for referring you). Okay, now I just need
13,000 12,999 12,998 of you to sign up. Go ahead. 😉
So by using the coupons, I should be able to reduce the amount we spend on groceries and other products, which would leave us with more money to save. With ibotta, I can just throw that money into the savings account. Easy peasy.
Odd jobs here and there, raiding my piggy bank, selling stuff we don’t use, housecleaning if my mom ever needs me again, surveys, paid emails, swagbucks, cash crate, my points…anything I can come up with and have time for. Sure some of the things only earn gift cards, but I can still use them to save money by getting them for the stores we normally shop at for groceries and whatnot.
Have you ever saved up the money to pay cash for a car?
What did (or would) you do?