For many young students and graduates their first introduction to adulting starts when they make a decision to buy their first car. This can be a daunting experience as car ownership involves many additional expenses such as fuel, insurance and maintenance which can all impact monthly budgets and cash flow.
Becoming independently mobile can be an exciting prospect, but buying a car is also a long term commitment so it’s important to understand the economics involved.
These tips from WesBank will help navigate the decision making and buying process and ensure that students and graduates are better equipped in their financial journey:
• Track your income and expenses:
This means understanding exactly how much you make versus how much you spend. Draw up a detailed budget including income and expenses to determine what you can realistically afford to spend on a car. As difficult as it may be, stick to your budget.
Purchasing a vehicle can be stressful for students and graduates, especially because they do not always have a credit history.
• Spend less than you make every month:
A budget is important as it helps to ensure that you spend less than what you make each month. If you do not track your spending, it can be easy to overspend and ultimately end up in a debt situation that’s difficult to overcome.
• Minimise on lifestyle inflation:
Being young often means high pressure to go out and socialise, or buy the most expensive items of clothing and gadgets, instead of sav- ing towards bigger purchases, like a personal vehicle, a house, or saving for emergencies. It’s important to be aware of your entertainment needs, and identify other less expensive means of entertainment. Binge spending once in a while is okay, budget permitting, but be careful not to overdo it through lifestyle pressures. The money that you’re spending on unnecessary items, such as excessive entertainment, is money that you could be using towards something that will make a real difference to your life.
• Start saving early:
One of the most common mistakes any working individual makes is thinking they will only start saving once they start earning a certain amount. Saving is one important financial discipline that should not be put off. Even if you start with a small amount, saving is a lifelong decision which impacts how early you can retire as well as having a go-to ‘piggy bank’ in case of a financially demanding emergency.
Purchasing a vehicle can be stressful for students and graduates, especially because they do not always have a credit history.
For those looking to buy their first car, the WesBank Graduate Finance offering provides graduates with competitive interest rates and credit history is not essential. The entire application process can be accessed and completed online.
Wesbank Graduate Finance is designed for graduates who:
- Have a University degree, three-year diploma or NQF 6 qualification
- Have graduated within the past three years from date of application
- Are under the age of 31
- Can provide proof of employment
- Hold a valid driver’s license
- Are South African citizens
