Buying your first car can be a daunting task but now that you’re an adult and understand your pay cheque, you probably want to buy yourself a car. Hopefully you planned your budget accordingly! Buying a car is often one of the first big purchases people make. Lots of high school students save up a few grand and buy an old clunker to escape whenever they want.
Don’t write off buying used because you “can” afford new
I don’t know your financial situation but if you’re still in school or freshly out of school, or still have student loans you might want to go the used car route. Used cars don’t get enough credit as a possible money saving device. Used cars allow you to avoid immediately losing 11% of the purchase price after driving it off the lot. This basically means if you buy a car with a 10% or less down payment, you immediately own no equity. It’s basically like throwing away 10% of the purchase price. Here’s an infographic from Edmunds.com(They’re car people)
How to be an adult part 2: Simple Budgeting Guidelines
Now that you understand how your pay cheques work let’s talk about budgeting that money.
What is a budget?
So what exactly is a budget? Well according to the smart people over at Merriam Webster(the dictionary people) Budget as a noun is defined as:
a : a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them
b : a plan for the coordination of resources and expenditures
c : the amount of money that is available for, required for, or assigned to a particular purpose
And as a Verb:
1a : to put or allow for in a budget
b : to require to adhere to a budget
2a : to allocate funds for in a budget <budget a new hospital>
b : to plan or provide for the use of in detail <budgeting manpower>
So basically, for our purposes of personal finance a budget is the plan you give yourself on how you’re going to allocate your money. It doesn’t have to be spending, if you’re budgeting your pay cheque it should certainly have savings in it. Also you may want to include something towards an emergency fund.
How does one go about making a budget?
How To Be A Successful Adult: Understanding Your Paycheck
This seems like a topic that shouldn’t be needed. Your paycheck is quite simply your pay for performing your job at your place of employment. You have a total at the bottom that tells you how much money you’re getting. What’s so hard about that? Well I consistently see people who have received paychecks for decades tell people incorrectly how taxes work and many other mistakes. On top of that there’s sometimes dozens of additional lines that add and subtract money. There could be anything like health benefits, dental, life insurance, pension, GRRSP, union dues, tool allowance, and a hell of a lot more. Read more