Cars

How to Pay for a New Car

If we want to buy a car, whether new or second hand, we will know that we will have to pay out a lot of money. We will tend to pay as much as we can afford because cars will be more reliable if we pay more for them in most cases. This will not always be true, but generally it will be. This means that we might be thinking about options for paying for a car when we know that we need one. There will be various options and it is good to consider them all and then choose the one that will be the best for you.

Borrow from dealer

Borrowing from a dealer tends to be the default method that many people use to buy a car, if they buy one from a dealer. It is convenient as you can organise the finance while you are buying the car. You may even be offered a discount if you use their finance and it could be interest free. It is worth making sure that you compare it to your other options though. Car dealership finance might be dearer than borrowing from a bank. Even if it is interest free, if you miss a repayment the costs could be very high or you could find that the cars from that dealership are more expensive than those from dealerships that do not offer interest free credit. So be very careful with your choice and make sure that you are not paying more than necessary.

Bank loan

A bank loan can be a cheaper way to borrow but it will depend on which bank you use. It can be worth getting a loan if it means that you can afford a car which will give you better value for money. However, it is not always that easy to calculate whether it will be, especially if you know little about cars and do not know how to choose one that is good value. Do make sure that the loan you take out has a competitive rate though and that you can afford the repayments. If you cannot repay it, then you will be charged even more money for it and it will certainly not be good value for money. It can be better to pay a bit more but spread the repayments over a longer time, rather than risk not being able to repay larger amounts.

Other borrowing

There are other ways to borrow money as well and it can be worth considering these. If you buy a cheaper car then you might consider using a credit card or overdraft, for example. It is worth comparing different methods of borrowing though as you will find that some can be significantly dearer than others. Do not just compare the interest rates but try to calculate how much you will have to pay in total and compare that amount as that will give you a figure that is easier to compare.

Savings

If you have savings then it can be better to use these to pay for the vehicle than borrowing the money. Although you will miss out on the interest that you would otherwise get on your savings, it is normally the case that the cost of a loan will be higher than the interest that you get paid on savings. This means that it can be much better financially to spend your savings rather than borrow money for a car. It can be difficult to part with your money like this though. We become attached to our savings, perhaps planning on what we will spend it on in the future or remembering how much hard work we put into saving it. We may even be saving up for something specific and not want to spend the money on anything else.

Save up

Saving up specifically for a car can be a better approach to get around the attachment that you might have for other savings. You will have to start this well in advance of buying a car though and so you will need to be well organised with it – perhaps even starting as soon as you buy a car so that by the time you need a new one you will have enough saved up. It is worth calculating how much you think you are likely to need to buy a new car and then how soon you might need a new one. Then you will be able to calculate how much you will need to put aside each month.

It is good to be aware of all of the options available to you so that you make the best financial decision. Which will be best will depend on you and your situation as well as how much you need to pay out for the car.

Money

What Age Should I Teach my Children About Money?

It is really important to make sure that your children have a good financial education. This will enable them to be able to manage their money sensibly when they are older. Managing money is so important because it can help you to be able to afford what you need and want, will mean you do not get into uncontrollable debt and you live within your means. In order to be able to do this we all need to know how. There is limited teaching in school about this sort of thing and so it is really handy if parents can reinforce this teaching as well. But knowing when to start can be tricky.

Infants

Infants have a limited understanding of maths and therefore they cannot be expected to understand money in too much depth. However, they will be able to understand some concepts. For example, as they start to learn to count, they will be capable of counting coins. If you start with coins that are worth just one such as pennies or pound coins that will be easy. They should learn in school about the different value of coins and you can help them with this as well. You can even start to show them how you pay for things with coins in shops and get change. This is again something that they will learn in school, but actually seeing the real coins and doing it for themselves can really help them see the practical application.

Juniors

As they get older they may start to want pocket money or get money for their birthdays. This will be an opportunity to talk to them about saving money. It is great to tell them why it is advantageous to save money for the future, but also to show them how to save up for more expensive items that they might want. It can also be a time when you can start showing them the prices of things that you buy. So when you are in shops with them, show them how much things cost. Also, it can be good to start talking about household expenses as well.

Teenagers

Things can get trickier with teenagers. They will probably expect pocket money and want lots of expensive things because their friends have them. They will not think about the cost to you and may not be interested in talking about finance with you. However, do try to get in when you can with some information for them. Keep showing them prices, discussing household finances and encouraging them to save. If they are looking to go to university, then outlining the costs of this to them can be very useful as it will allow them to understand the importance of saving. They will be old enough to understand about loans as well. It will be important to talk to them about student loans, but also about overdrafts, credit cards and loans because they will be exposed to these and able to use them as soon as they are eighteen and they therefore need to know about the advantages and disadvantages.

Older

It is easy to think that once our children reach adulthood there will be no more for them to learn, but this is not correct. We are always learning and there will always be wisdom that parents can pass on to their children. The approach may need to be a bit different but hopefully they will feel that they can talk to you about money, because you have always been open with them about it as they grew up. It can be a worry for parents if they feel that their children are struggling and if they can help it can feel good.

It is not always easy to discuss money with your children. This is especially true if you feel that you are not good with money and you want to hide that form them. Try not to do this though, but explain to them why they should strive to be in control of their money and not let it control them. Point them towards lessons you have learned and changes that you wish you could make in your spending habits which you hope that they will be able to do. Just because you might not be in control of your money it does not mean that you do not have useful things to pass on to your children about how they should be with their money. Be confident that you will be able to help them but also look for help. There are useful resources online as well as books that you might be able to use to help you to teach them. Do not rely on school to do it all as there is not enough time in the curriculum to cover more than the basics.