Financial Advice

[Circle9]

Not to be cruel or anything, but this is a good wake-up call for you. You know what you need to do, sell the car, pay off your debts, and live frugally until times get better. I don't know what mods you have on your car, but you should sell them as well.

My credit card companies have never made a single dime off me, I pay the full amount each month. I too, have been affected by the economic downfall, I make about 25% less than I did as of 6 months ago. But since I based all my purchases off of 60% of my income, I am safe and still retain the ability to build up reserves.

I have often pondered getting an older Miata and building it, I love my MS3, but I think I could easily love a built/boosted Miata just as much, if not more!

 

[jred321]

what was the point of asking for advice if you already knew what you were going to do and were not going to listen to anything people said? were you just seeking validation?


a car is a large luxury item. as a student you are not in a position to afford a large luxury item. if you got through college without any student loan debt then that's awesome and a great start. however if instead of student loan debt you have CC debt that's even worse because the interest rate is going to be much higher on your CC debt than it would have been if you were to simply take some student loans

 

[robin2660]

your goal should be to get yourself debt free. at such a young age you should not have any debt.

Tell that to someone who wholly puts themselves through college (without a silver spoon). You WILL have a lot of loan debt unless your major is Business or something else that doesn't require lots of book time, so you can work a lot.

 

[jred321]

Tell that to someone who wholly puts themselves through college (without a silver spoon). You WILL have a lot of loan debt unless your major is Business or something else that doesn't require lots of book time, so you can work a lot.

the only things worth paying interest on are student loans and house payments. the only reason interest is acceptable there is because both should make you more money in the long term than you pay in interest. every other interest payment is just throwing money away

as i said - student loans are OK. they suck and should be avoided if possible but they're not bad. they have a lower interest rate and are scheduled so they are paid off in 15 years if you make minimum payments. credit card debt, either as a student or otherwise, is unacceptable. i wholly put myself through college as a computer science major at a private school and know what student loans are like. after ~3 years of payments i've gone from $60k to around $17k, $14k of which is at 1.875% interest so i'm making minimum payments on. i have never had a credit card balance last for more than a month and am now looking to buy my first condo or house and even in this time when it is tough to get a mortgage i should have no trouble getting a loan. have i done everything right along the way? no. but i'm trying to share what i've learned to make things easier for others

 

[Circle9]

Ok, if you're going to have debt for college he shouldn't be spending $400 a month on a nicer car.

He knows he should sell the car, and I think he should stop procrastinating and waiting for someone to tickle his ears with the promise of an easier solution. The OP needs to start a poll as to what people think he should do if that helps to clarify a solution.

A. Sell the car and free up $400 a month and use it to pay off CC debt
B. Keep the car and try to refinance it for a lower rate
C. Try to make it by just making the minimum payments on the CC's and hope things get better

 

[AWDthis]

The thing is, selling the car will mean 2k$ more in debt since im upside down

 

[dizzin9]

so? at least you got rid of the car. you're making payments that actually decreases your debt. if you want to keep the car, i suggest you find a second job. there's no happy ending in your situation you have make some sort of sacrifice.

 

[Nliiitend1]

Why do people buy cars that they are EVER in the position to be "upside-down" on??

That whole concept boggles my mind...

 

[Circle9]

If you can't put enough down or get a good enough interest rate to keep you from going upside down on a car loan, then you can't really afford it.

This is why the economy is the way it is. People took out car loans that they are upside down on, they bought houses with originally low, but variable interest rates, and racked up credit card debt.

Interest rates went up, people couldn't pay the mortgage's on their houses, they try to sell their car(s) only to find that they will end up owing more money. On top of that, their credit cards are maxed out and they can't get the limits raised because there is a credit crunch and no one is lending!

\rant

I wish people wouldn't be so nearsighted (sad2)

 

[MazdaSpeeder]

I'm going to join the chorus here. You really need to sell the car. I know it totally sucks and the last thing that you want to do it get rid of an MS3 (I would feel the same way) but the momentary value of this car is nothing compared to the long-term damage you will cause if you fail to stop your financial bleeding now. Consolidating CC debt is a really good idea as well, but right now you can cut out your car payment, and you need to do it. What if one more thing falls on the pile. You need room to financially respond to another money crunch, and while your managing now, you're going to get crushed if anything else happens.

On the subject of GFs, what if you find one, date for a while and get married. Then you want kids and a house...but no house for you, because your credit still blows from the decisions you are making today. You can always buy another awesome car when you are financially stable. Bad credit will follow you forever.

 

[tunersteve]

I agree, sell the car, pay off your CC debt, then rebuild. No sense in fighting a losing battle in the current economic condition.

Once you do rebuild, learn to live without credit cards in your life, a la a '50s mentality. If you don't have the cash lying around, you probably shouldn't be buying it.

And I can speak from experience. I racked up debt when I first got CC's and got stupid. I wised up real quick when I realized that it wasn't worth pissing all my extra money away on something when I could be using it to buy a house as my next big investment.

Pay on your cards weekly if you can. Set up online accounts and set up a budget. You WILL have to sacrifice things to stay afloat.

Another suggestion: any mods you have on your car, sell them. Take any money you make on that and pay on your CC's.

 

[340CID]

Why do people buy cars that they are EVER in the position to be "upside-down" on??

That whole concept boggles my mind...

A lot of people want 'nice' things now because they want to live today at the expense of tomorrow. It must be something about thinking it's a right (rather then a privilege) to 'have' things that are beyond your means. The ironic thing is that these people living beyond their means (have the car, boat, house, electronic gizmos like ipods, huge flat screen tvs) don't 'have' anything. All those toys are owned by the bank and are taken away in days if the payments are not made. It's a very shallow way to live life but then some people think it's all about flaunting what you 'have' which got them into this situation orginally.

Too few people these days are willing to eat some humble pie and admit they over extended themselves. Instead, they blame others for their poor planning.

 

[derspi]

if you have enough "cash stashed away" under your bed, that can pay off your C.C. THEN PAY THAT THING OFF!!!!

Your money is earning you nothing, and having a CC balance is COSTING you... thats a NO brainier!!!

I don't normally like to chime in on these types of threads because I'm no financial guru but there's no simpler thing than doing this, right now, right this second. It boggles my mind that there are SO many ppl who think paying off the minimum amount each month is "good enough" but you're absolutely getting killed with all that interest. Your cash reserve of 4K is not making you any money in the form of interest or an investment so in reality, that 4K is LOSING value due to inflation by just sitting there chillin' under your bed. Meanwhile, sitting on 4K+ in CC debt means you're spending 16 - 20% interest.

I'm not going to offer any advice in terms of your car, house, etc. because it doesn't seem like you truly understand or are willing to accept everyone's advice thus far but for god's sake, PAY OFF YOUR CC DEBT NOW OR IT WILL BLEED YOU DRY.

 

[TheRealDefman]

I haven't seen anyone suggest going to one of the many credit counseling companies that deal with your situation all the time. I've never used one, but I did talk to one once and they arrange all of the stuff you're talking about doing on your own.

Too bad you're in Florida, which appears to allow creditors to sue you and get a judgment to garnish wages unless you make less than $500 a week. If not for that, I'd also offer that you could just bail on the credit card(s).. looks like you're credit isn't very good anyways, so you'd just have to ride it out a few more years... after 3 or 4 years, start disputing the hell out of the bad entries and watch them fly off the report since the creditors don't usually bother with ones that old. Sure, it's a bad thing to do but hey man, you gotta take care of you! FYI, move to Texas, we pretty much don't allow wage garnishment except for taxes, student loans, and child support.

 

[Kain]

I haven't seen anyone suggest going to one of the many credit counseling companies that deal with your situation all the time. I've never used one, but I did talk to one once and they arrange all of the stuff you're talking about doing on your own.

Because while credit counseling doesn't directly affect your FICO score any longer (wasn't always the case), a creditor that has the terms of its agreement changed by a counseling service could ding your credit rating by changing the status of the account to "not paid as agreed." Credit counseling or BK should be a last resort.

 

[AWDthis]

I do make less than $500 a week, and for those of you that imply im irresponsible, read the part about me making alot more before which was supposed to be stable but then lost my job, thus making things tight now. What you guys dont seem to comprenhend that I do not want to get rid of the speed3 because well Ill be $2k upside down, and in 3 or 4 months Ill be graduating college, I would think I could get a job, if I do id be making 3x what im currently making. So why would I panic now if in 3 months the situation will change for me? TheRealDeafman thats good advice, forgot about those companies, if I cant talk the bank into reducing my interest and lowering my payments somehow, I will def. talk to one of those.

 

[MazdaSpeeder]

I do make less than $500 a week, and for those of you that imply im irresponsible, read the part about me making alot more before which was supposed to be stable but then lost my job, thus making things tight now. What you guys dont seem to comprenhend that I do not want to get rid of the speed3 because well Ill be $2k upside down, and in 3 or 4 months Ill be graduating college, I would think I could get a job, if I do id be making 3x what im currently making. So why would I panic now if in 3 months the situation will change for me? TheRealDeafman thats good advice, forgot about those companies, if I cant talk the bank into reducing my interest and lowering my payments somehow, I will def. talk to one of those.

We're just trying to help you. You may not have been irresponsible before, but then you lost your job. You need to cut back. Being upside down and owing $2k is better than having a huge car payment. What if you don't get a job that pays 3x what you are making now? That's a very distinct possibility in this economy. You shouldn't put off fixing your financial problems until later...do everything you can to solve them now. Once you get that job, go out and buy a new 2010 MS3 if you want- but sell your car now.

 

[AWDthis]

Once you get that job, go out and buy a new 2010 MS3 if you want- but sell your car now.

That is the WORST advice you could have given me lol

 

[Mr. Insurance]

I can understand where you are coming from because you use to make more money, but I do think it is time to either sell the car or take on another job to help pay for it.

 

[AWDthis]

I do agree with the second job no matter what happens, even if the bank refinances and i pay $1 a month. Im looking for something else, its just hard out there. BTW Im honored your first post was on my thread mr.insurance! thanks for the advice and welcome to the forums