Want to learn how to build wealth WITHOUT a car payment slowing you down?
If you’re reading this article… chances are you already know how important it is to live within your means. Making a little extra money on the side is great… but if your car payment is bigger than your paycheck then what’s the point?
Here’s the problem:
Your side hustle income can ONLY take you so far if you’ve got monthly bills eating away at it. And when it comes to rookie mistakes… financing a car is at the top of the list.
The good news? There are beginner budgeting tips that can help you avoid car debt and build wealth at the same time.
Ready to learn how?
What you’ll learn:
- Why Taking on Car Debt Will Ruin Your Wealth
- Easy Budgeting Tips for Side Hustlers
- How To Purchase A Car without Going Into Debt
- Increase Your Side Hustle Income While Expenses Remain Flat
Why Taking on Car Debt Will Ruin Your Wealth
Cars are expensive. As a matter of fact, they’re one of the most expensive purchases you can make next to a home.
Current data from Experian shows that the average auto loan balance in the United States climbed to $24,297 in 2024. Yikes!
But wait… there’s more!
New monthly auto loan payments are also rising as interest rates soar. As of March 2024, Americans are paying an average of $748 towards their monthly vehicle payment.
Let that sink in…
If you’re freelancing and earning extra money from a side hustle… chances are you’re not bringing in $748 per month.
Following the Dave Ramsey car baby steps for beginner budgeting is all about avoiding debt. Car payments are typically the first type of debt you should avoid.
Here’s why:
A vehicle is an investment that loses value the second you drive it off the dealership lot. If you borrow money to purchase a car, you’re going to pay interest on top of that.
It doesn’t take a finance degree to understand how bad of an idea this is.
Easy Budgeting Tips for Side Hustlers
If you want to start making money on the side… It all starts with your ability to manage your money.
One of the biggest beginner budgeting tips you should follow is tracking your expenses. This one cannot be stressed enough!
As the saying goes… you have to know where you’re bleeding money before you can stop the bleeding.
The worst place for this bleeding to happen is with car payments.
Follow these easy budgeting tips as a beginner:
- Track your expenses! Every cent that comes in and goes out of your bank account should be tracked with a budgeting app or spreadsheet.
- Keep side hustle money separate. Make sure you open a separate bank account for your side hustle earnings. That way you can physically see your progress every month.
- Create a car savings fund. Rather than financing a brand new set of wheels, start putting away extra cash each month until you have enough to buy a used vehicle outright.
Bankrate’s side hustle survey revealed that 27% of American households had a side hustle income in 2025. That number comes out to roughly 70 million people.
The average side hustle income amounted to $885 per month.
Imagine if those 70 million Americans were all following these simple beginner budgeting tips. There would be so much less debt!
Saving up for a car instead of taking on debt may seem like a no-brainer to you. But you’d be surprised how many people immediately jump into car payments without saving first.
How To Purchase A Car without Going Into Debt
Purchasing a vehicle 100% up front is possible.
In fact, it’s one of the best beginner budgeting tips you can learn.
Here’s what you need to do:
Set a realistic budget for your next vehicle. Try not to get greedy here. Think about what you NEED versus what you WANT. If you’re looking to start side hustling… chances are you don’t need a brand new car. Shoot for a used vehicle that won’t break the bank.
Break your car budget down into monthly savings goals. If you want to buy a $6,000 car… and you can save $500 per month then your timeline will be 12 months. Does it take a while? Maybe. But it’s a lot better than shelling out $748 per month for years on end.
If you can save at least 30% of your side hustle income each month… you should have a decent amount to put down towards your next vehicle.
Keep whatever car you currently own running. Too many people buy something new as soon as they can afford it. If you’re going to avoid car payments you have to learn to take care of the car you have.
Increase Your Side Hustle Income While Expenses Remain Flat
You’ve got your budget handled. You’re tracking your expenses like a budgeting pro. Now it’s time to start increasing your side hustle income.
Saving up for a car won’t happen overnight. You have to continually focus on making more money while keeping your expenses as low as possible.
Here are some beginner budgeting tips to help you boost income:
- Invest in yourself. Anytime you earn extra money, think about how you can use it to make MORE money. This could be through equipment, software, advertising, etc.
- Don’t rely on a single income. Your full-time job is great but it’s not always going to be enough. Try starting multiple streams of income so that you have options if something were to fall through.
- Set your savings on autopilot. Have a certain percentage of your paycheck automatically transferred to your savings as soon as you get paid. That way you’re not tempted to spend it!
If your side hustle income increases while your expenses remain flat… you’ll be setting yourself up for success.
Keep these beginner budgeting tips in mind as you build your side hustle empire.
There’s nothing wrong with starting small. As long as you’re taking steps towards your financial goals you’re headed in the right direction.
The Bottom Line
Beginner budgeting tips to avoid car debt when side hustling is possible.
Sure you could take out a loan to buy a car tomorrow. But you’re throwing away SO much money in interest by financing a vehicle.
Take control of your money. Live BELOW your means. Save up for a car and pay for it in full.
You don’t NEED a new car. You NEED financial freedom.
Once you pay off your vehicle outright you won’t have a monthly car payment hanging over your head. That kind of freedom will open up a whole new world of possibilities when building wealth through side hustling.
