Luxury cars are the type of things that most people can only dream about. Often, it’s just not practical to own one, and even if it is, the price tag can often put many people off.
Now I’m not going to sit here and tell you that I think spending money on a luxury car is a good idea. Everyone knows that 99.9% of cars are depreciating assets, however, if you are that keen on a luxury car, like say a Jaguar, then the cost or asset depreciation isn’t something that’s likely going to bother you. Perhaps owning a flashy car has been something you’ve always wanted to do, or it’s something on your bucket list – I don’t know, but I do know how to save money, so let’s dive into that so you can start saving up for that big purchase.
First things first – you need to consult with your budget. This is the main thing that’s going to determine if and when you will be able to afford the car of your dreams. Normally I recommend to people that they contribute a bare minimum of 5% of their total income into savings, however, if you are serious about owning a high end car, you’re going to need to know how much it costs, otherwise you may find that 5% isn’t going to allow you to purchase the car in your lifetime.
Don’t be disheartened though, you may just need to do things a bit differently. As an example, rather than putting 5% of your money into savings, add the 5% to your investment portfolio (How to Invest Money). This is obviously going to be a higher risk play, but it can also yield much higher rewards – it all comes down to your level of risk tolerance.
Once you work through the sums, you may still find that your investment portfolio isn’t going to get you there in the time frame you want. In that case you will have to revisit your investment choices. Generally, higher risk investments will return higher amounts, but they are also more likely to fail.
There are also other things you can try to do. Some of them include:
- Buying cheaper food
- Eating out less (or not at all)
- Packing your own lunch for work
- Buying things second hand rather than new
I’ve written an entire website listing lots of ways to save money here if you need more ideas.
In the end it is your decision on how you want to spend your money, however, you will need to understand that saving for a luxury car won’t be easy and that cars are often a poor investment choice. But if it’s something you really want to do, then you need to be serious about how you budget and invest your money.