October 17, 2019 - Sean Hendrickson
Have you ever wanted something, but your current financial situation didn’t allow for you to purchase it? I know I have! When I decided to purchase my first car I had no idea what I was getting myself into. There is a lot to know when purchasing a vehicle and although I did not know everything I knew I needed to find something within my budget. I started out my search by looking into what model and type of car I wanted so I could get an idea of what it was going to cost me. I spent a few weeks researching and decided my first car was going to be a Honda Civic with low miles which would cost me roughly $3,000.
At the time, I had about $1,000 in my account. In order to create a reasonable goal, I used the S.M.A.R.T goal approach. The acronym stands for Specific, Measurable, Action, Realistic, and Timely. The goal I wrote down was to save over $2,000 during the course of 1 year by putting away $350 during the summer months and $100 each month during the school year. I wanted to specifically save $2,000. I could measure my progress over the course of the year by seeing how much I had in my savings account. I would actively deposit money into a savings account each month. This goal seemed realistic since I was working overtime during the summer months and working any hours I could during the school semester. I gave myself a time frame of roughly 1 year to save $2,000.
I wrote my goal down on a piece of paper, made reminders in my phone, and made sure I would see my goal at least once a day. I held myself accountable by constantly reminding myself what I was working so hard for. I also talked to my friends and family about my goal. This made me want to reach my goal even more since people close to me would know what I was striving for. I figured out during the summer months I could actually save close to $400 each month. This news was exciting to me because it meant I could reach my goal a month quicker! I found little ways to save a few bucks by adhering to my budget and cutting out little purchases I didn’t need. One way I saved was by cutting out soft drinks when I went out. That way, I could still enjoy going out with my friends while also saving some money.
After 11 months of constantly reminding myself of my goal, I had over $3,000 in my savings account! I began looking for Honda Civics in my price range and researching car ownership. I talked with family members and friends about their experiences while car shopping and found out what to look for when I go test drive and buy a car. After three or four weeks of searching I finally found a blue Honda Civic and it was love at first sight. I named him Mr. Blue Sky and my favorite thing about him was he was below my price range! I took my dad with me to take a look at the car and test drive it. I was skeptical as to why it was a low price and found out there was a small sensor on the car that had broken. My dad and I decided this would be an easy and cheap fix. I ended up paying $2,850 after sales tax and then repaired the sensor myself. I was so excited!
All my hard work and determination finally paid off. Not only did I have a car, but I also got the pride of purchasing it with my own money as opposed to taking out a loan and paying interest. Below are some of the main takeaways I found from going through this process.
Do some research first, know what you are buying. Do you need it? What factors are going to play into the price of the good? For example, I found purchasing a used car is much cheaper than a new car. When purchasing a car, I also had to think about insurance, sales tax, and putting extra money in my emergency fund in case of maintenance.
Write down a goal using the S.M.A.R.T framework. Be Specific, make sure your goal is Measurable, what Action needs to take place, is this Realistic, and what is your timeframe.
Write down your goal so you can be reminded constantly. Talking about your goal to friends and family can also help you stay accountable.
After a little bit of time passes, review your goal and see if any changes could be made. You may be doing better than you had previously expected.
Also, know that emergencies do happen and you may need the money for rent or another necessary purchase. Just remember to revise your goal afterwards.
Always be researching, you may find that there have been some changes since you last checked. Try to become as knowledgeable on the topic as possible.
After you make your purchase, reflect on the process and the success of your hard work.
Lastly, feel good about what you’ve accomplished!!! It’s not easy to accomplish big financial goals, take some time to enjoy what you’ve purchased before you move on to your next goal.
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