It’s no secret that owning and maintaining a car is a big commitment, especially financially. You must consider the costs of refueling, car insurance costs and maintenance fees.
Many people absolutely need a car for their work or a variety of other reasons when public transportation is not an option for them. However, many people do not realize exactly what they are getting into.
Many people can not afford their own car or at least they do not realize it. They can pay the initial costs of the vehicle, but then they can have a rude awakening when the time comes for an unexpected repair.
80% of car owners endure repairs that cost $ 500 or more. Meanwhile, 40% of American adults do not have the funds available for an emergency of $ 400 or more, which means that any unexpected cost of more than $ 400 must be charged to a credit card.
That’s a pretty considerable number of people who can be construed as people who do not realize the magnitude of the costs associated with owning a car. Or, in other words, a high percentage of Americans underestimate the cost.
Now, returning to 40% of American adults who have to charge unexpected costs to a credit card … Why is this so bad? Honestly, it’s not so bad … if the credit card holder can pay the Bill at the end of the month.
However, many people face the problem of not being able to pay the bill. This means that you must pay interest while you can not pay the results, that means you will end up paying much more for the repair than you needed. In addition, you run the risk of incurring credit card debt and risk damaging your credit score.
So, how to avoid this snowball effect? The key is to create an emergency savings account that experts recommend accumulating approximately 3 to 6 months of living expenses. This may sound like a lot, but it will really pile up if, up, some vehicles may end up needing repairs before others, so you’ll want the excess funds before you burn them.
Financial experts are also educating your budget and finding small areas to cut to make this amount of savings happen. You may have to cut some luxuries out of your routine or even look for a secondary job to have money that is not enough. Already assigned to go to another part of your budget. Save as much money as possible, that also means gifts.
Therefore, do not allow your personal vehicle to indebt you. You can always prevent it from being proactive by taking the right steps to save money that you can use when you really need it. Remember to be aware of how much. Generally, auto repair really costs and you will surely be prepared to handle most of the costs associated with the vehicle.