Start saving early

Na 75.21 amount needed to save for a car
Last week we looked at goal setting with regards to a young man wanting to buy a car with an agreed insurance value of $1583.00 when he reached 18 years old.
We also looked at the costs associated with buying a car, such as the licensing fee, warrants, maintenance costs and insurance to decide on an amount which was needed to save (the goal).
Have a look at the tables below to show how much is needed to save each week depending on the type of insurance chosen and the age when saving was started.
I found this a very interesting exercise as I discovered the cost of insuring this same car with finance was $294.75 more per year than to insure it if no finance was required. The cost was also $97.26 per annum less if an alarm was fitted.
Cost of car, licensing, warrants, repairs Comprehensive Insurance
$3893.75

Cost of car, licensing, warrants, repairs Comprehensive Insurance			$3893.75
AGE NOW	GOAL AGE	YEARS TO SAVE	$ PER WEEK
12	18	6	12.48
13	18	5	14.97
14	18	4	18.72
15	18	3	24.95
16	18	2	37.44
17	18	1	74.88

Cost of car, licensing, warrants, repairs Third party, Fire and Theft Insurance			$2842.16
AGE NOW	GOAL AGE	YEARS TO SAVE	$ PER WEEK
12	18	6	9.10
13	18	5	10.93
14	18	4	13.66
15	18	3	18.22
16	18	2	27.32
17	18	1	54.65

 

 

 

 

 

 

 

 

 

Cost of car, licensing, warrants, repairs, Third party Insurance			$2519.73
AGE NOW	GOAL AGE	YEARS TO SAVE	$ PER WEEK
12	18	6	8.07
13	18	5	9.69
14	18	4	12.11
15	18	3	16.15
16	18	2	24.23
17	18	1	48.45

The point of this exercise is to show if saving is started early to buy a car then the amount required to save each week is considerably less. Setting goals from an early age can give your child a head start when it comes to saving for those big ticket items (Such as the car or deposit for a house).
Sylvia’s book, Parents: How to stop your kids from going broke is available from www.silbo.co.nz, Paper Plus Stores, and Christian Bookshops. She is also available to speak with community groups and give tips on how to raise financially savvy kids. Sylvia’s next series of workshops is at Katikati community centre starting 18th February.