The family plan to buy a car in a years’ time, and Kai wants to be involved in the planning process for this big purchase, including comparing wants versus needs. They currently have $7,500 saved up for the car and will spend the next year putting aside $600 per month. They hope to have enough money for the purchase price, including one-off costs, and one years’ worth of ongoing expenses.
Using the savings goal calculator, put in the total cost of a brand new car using the figures from the last task (purchase costs and running costs for the year).
Enter the starting figure of $7,500 in already saved and savings of $600 per month. Do the same calculations using the total costs for the used car and compare the results.
How long does it take to save for each car? What happens to the time frame if you increase or decrease the goal amounts and savings per month? Is it achievable for Kai’s family to reach their goal? Are there cheaper options out there for new cars?
Planning your lifestyle around a budget is a common thing that many people do, so that they can afford to splurge on things they want or save for big ticket items they need. Using a budget planner is a useful way to do this, and you can check out this simple budget template or this monthly budget template and have a go at creating a budget that tracks your income and your spending habits.
Are there big ticket things that people in your family are saving up for? Perhaps a family car? If so, how do they plan to reach their savings goals? Do they use a budget?