Besides a house, one of the biggest expenses people face nowadays is buying a car. Owning a four-wheeled vehicle not only boosts your social status in front of your neighbors or coworkers, but it also offers many functional benefits. For example, you can go anywhere without worrying about rain or heat, carry more people, and haul more stuff too.

However, because of its high cost, buying a car can be quite a challenge, especially if it’s your first time. But that doesn’t mean you can’t buy one. Here are some tips on saving for your first car, especially for those buying for the first time.

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1. Decide on the type of car you want

The first step to saving for a car is deciding on the type of car you want. Every car has different specifications. Some are small but fuel-efficient, while others are big but consume more fuel.

So, figure out the specifications of the car you want. For instance, it could be affordable, fuel-efficient, seats five people, could be new or second-hand, and if second-hand, no older than a certain age.

To make it easier, you can create a two-column table. On the left, list the car brands, and at the top, write your criteria. Fill each table cell with a score and then add up the totals. Here's an example:

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To assess the car’s quality based on these criteria, you can read online reviews, ask people who own the car, or try a ride in an online taxi that uses that particular car.

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2. Determine the car’s price and payment method

Once you know which car you want to buy, it's time to research the price. You can do this online through platforms that sell new and used cars like OLX, Carro, or by asking nearby car dealerships. The car’s price will affect how much you need to save and your chosen payment method.

There are two payment methods for a new car: cash or credit. The advantage of paying in cash is that you won’t have to worry about future car installments. The downside is that you’ll need to save a significant amount. If you choose credit, you’ll have to think about monthly car payments, but the upside is you only need to save for the down payment (DP).

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3. Set aside, don’t just save what's left

The third tip for saving for a car is to set aside a portion of your income specifically for this purpose, once you know what car you want and its price. This will help you stay consistent and disciplined in saving.

To figure out how much you need to save each month, you can fill out an Excel document, like the one content creator Felicia Putri Tjiasaka put together:

Monthly Savings Amount

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4. Invest your savings

Want to reach your savings goal faster and avoid inflation? If so, consider investing your money instead of just keeping it in your bank account. You could invest in deposits, mutual funds, bonds, or stocks.

However, remember that saving for a car through investment carries its own risks. For example, if you invest in stocks, be prepared for the possibility that stock prices might drop. If you go with deposits, you’ll have to pay a 20% tax on the interest, among other things. That’s why it’s important to do your research before choosing the right investment tool.

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5. Cut down on expenses

One way to save for a car faster is to reduce your expenses. For instance, if you usually spend IDR 100,000 a week on going out, cut it down to IDR 50,000 and save the remaining IDR 50,000 in your car savings account.

There are many ways to reduce expenses, including paying bills with a credit card. This way, you can accumulate points or miles, which can then be redeemed for various perks, such as merchant discounts, waived annual fees, and more. This method can help you save money as long as you pay your credit card bill on time, so you won’t have to pay any interest. The good news is, if you use an Honest credit card, not only are you free from interest, but you also won’t be charged any fees if you pay off your bill on time. So it’s completely free!

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6. Find additional income

The sixth tip for buying your first car is to look for extra income or passive earnings. There are plenty of ways to generate extra income.

For instance, you could create content on social media, sell vector images on microstock websites, etc. If you buy your car with credit, you could use it to start an online taxi or delivery service. Some of the income from these jobs can be set aside to pay off your car loan.

Being able to buy a car on your own is definitely a source of pride, given the large expense and the process involved. But that doesn’t mean Gen-Z can’t do it. With good financial planning, whatever you desire or need can be achieved.