Tips to stay on top of your car loan repayments
At Dubbo City Toyota, we understand that trying to stay on top of your overall finances can be a feat in itself. So, we've put together Toyota's best tips for managing your budget so that paying back your car loan zooms by.
How to manage your budget while managing car loan repayments.
First things first: the bigger picture. Paying back your car loan is just one part of your overall financial health. Your loan isn't just a way to pay off your car - it's also an important part of your financial plan. Motivating yourself to do something becomes easier when you know why you are doing it.
TIP #1
Look at your big-picture budget
Knowing what your longer-term financial goals are and how your car loan fits within them helps you stay disciplined and focused! Write down your financial goals and what you need to save to achieve them. It's not just about paying off your car loan. They can be anything - a home, a holiday, maybe even that next car!
Setting goals requires planning. As the old saying goes: if you fail to plan, you plan to fail! Making a clear plan for how you manage your repayments in the context of your wider financial plan will ensure that you don't run into issues later. Create a spreadsheet with all the money you have coming in and going out (be honest with your expenses here - you don't want surprises down the track). That way you can plug in your repayments and see how it impacts your other expenses and overall financial position.
TIP #2
Rainy day planning
It's helpful to put a little extra aside for your loan each month, just in case something happens along the way that may affect your income or ability to repay. You may never need it. But if you don't, then it's a bit of extra cash to spoil yourself with!
When it comes to budgeting, it all depends on whether you are making payments weekly, fortnightly or monthly. Different payment schedules will mean different times and amounts for your repayments; and with a loan with a fixed rate, you can set exactly how much you pay for your loan and when. If you haven't already, check out the My Finance portal - it will give you details on your loan repayments and help you stay on track.
TIP #3
Do your maths before driving in
It's also important to be careful of taking on more debt. Borrowing money can be a great way to fast-track your finances, however, like anything in life, there's too much of a good thing.
Borrowing money to make responsible investments like a home, a piece of equipment for business, or a car to get you from a-to-b can be a great use for debt. Borrowing money to buy more 'stuff' is often not. Be sure to really understand the debt you have and your ability to comfortably pay it off before considering taking on any new financial commitments. By keeping your overall financial health in check, it'll make it easier to stay on top of your car loan and achieve those other big financial goals you may have in the future.
Of course, your financial situation will change over time but by keeping a close eye on your handy spreadsheet and your regular financial commitments, you should be able to pay off your car loan no matter what bumps in the road come your way.
