Need advice on personal finance

[disneysteve]

Originally Posted by amberbamber

That is correct, it's the original purchase price on which the lease payments were based.

60 more payments. We leased it for 72 months. And we've had it for exactly one year.

So actually you owe $26,100, not $30,800 as stated earlier. So your total debt is $4,700 less than listed. Every little bit helps.

[amberbamber]

Originally Posted by disneysteve

So actually you owe $26,100, not $30,800 as stated earlier. So your total debt is $4,700 less than listed. Every little bit helps.

WHOOHOOOOO!!!!!

[creditcardfree]

Dave Ramsey's guideline on vehicles is that their total worth should not equal more than half your income. Something to think about.

I understand what your husband is saying about the van, but honestly their are roomy brand new cars out their for less than $30,000. I know you have three children, but new 2006 Ford Taurus can be found for around $12000. Just an example.

You really are doing well. You have made quite a few changes already. That is something to cheer about.!!

[amberbamber]

Originally Posted by creditcardfree

Dave Ramsey's guideline on vehicles is that their total worth should not equal more than half your income. Something to think about.

I understand what your husband is saying about the van, but honestly their are roomy brand new cars out their for less than $30,000. I know you have three children, but new 2006 Ford Taurus can be found for around $12000. Just an example.

You really are doing well. You have made quite a few changes already. That is something to cheer about.!!

Well, my DH won't buy ANYTHING vehicle wise, unless it's a Honda or a Toyota. And I've been looking for certified used (he said he'd compromise if I could find a "certified" used under $10000.) And I can't...at least anywhere in the state of NC. I'm searching Indiana right now because I know we will be there in October.

And I am excited about all the changes being made. My Dh is calling today to stop contributing to the 529 plans. I've already put it on my calendar for next year to start them back up again. But I honestly see all the CC debt being gone by next August!!!!

[autoxer]

Originally Posted by amberbamber

Not sure if that would really save us much to pay $5000 and then another $10,000 on a loan for a car.

Try to picture where that will put you in five years. 60 more payments of $435 is more than $26,000. And then you have to turn the van in and pay the overmileage + any other damage fees that they come up with. What are your mileage limits?

If you could get out of the lease for $5000, and then buy a $10,000 used van. After 5 years you would own a van that is still worth a couple grand, so you'll come out ahead as long as the repairs/maintenance are less than $11,000 or $2,200 per year. If you find a well maintained used vehicle & keep up with the maintenance, then that should be easy to beat.

I wouldn't suggest sacrificing safety, but to give me a little peace of mind, I have AAA Plus membership ($100/year) which will tow me up to 100 miles a few times a year. I haven't used it in a couple years, but I'm glad I have it.

[amberbamber]

[quote=autoxer]

Try to picture where that will put you in five years. 60 more payments of $435 is more than $26,000. And then you have to turn the van in and pay the overmileage + any other damage fees that they come up with. What are your mileage limits?

12000 miles a year...and I totally agree...would anyone mind tackling my DH to beat this into his thick skull

[disneysteve]

Originally Posted by amberbamber

Well, my DH won't buy ANYTHING vehicle wise, unless it's a Honda or a Toyota. And I've been looking for certified used (he said he'd compromise if I could find a "certified" used under $10000.) And I can't...at least anywhere in the state of NC.

You won't find a certified Toyota under 10K. I think they'll only certify up to 3 years old. You're not going to find a 3-year old Toyota for under 10K.

[disneysteve]

Originally Posted by autoxer

If you could get out of the lease for $5000, and then buy a $10,000 used van.

I think you are absolutely right, but this would depend on the OP having $5,000 available to buy out of the lease and qualifying for a new loan for the 10K. I'm not sure that is the case here.

[amberbamber]

Originally Posted by disneysteve

You won't find a certified Toyota under 10K. I think they'll only certify up to 3 years old. You're not going to find a 3-year old Toyota for under 10K.

Yep, I've been looking and have not found one yet

[creditcardfree]

I like that you really are looking at everything and you aren't giving up.

And hey, only one year from now and that CC debt will be gone. That will feel so good.

[amberbamber]

Originally Posted by creditcardfree

I like that you really are looking at everything and you aren't giving up.

And hey, only one year from now and that CC debt will be gone. That will feel so good.

Thanks, I am glad to finally be taking this step in my life

[amberbamber]

Alright here's what my lease says about termination. I think if I write this down on paper and show my DH the numbers he can't disagree with me anymore.

But I need some help because I don't understand parts of it;

I agree that the amount I owe you upon early termination will be dertmined to be the sum of 1, 2, 3, and 4**

1. Any official fees and sales/use taxes imposed in connection with lease termination.
2. Any Monthly payments already due you with are unpaid and any other amounts/charges caused by my failure to keep my promises under this lease.
3. Any early termination charge of $395 plus the number of Base Montly Payments shown in the following table which is based upon the percentage of months in the lease term which have expired:

Percentage of Lease Term Expired # of Base Monthly Payments
up to and including 33% 3
More than 33% but not exceeding 66% 2
More than 66%, but not exceeding 99% 1

4. The amount by which the Adjusted Lease Balance as described in Item 1A exceeds the vehicles realized value at termination.



Ok I understand point #2- we aren't behind in any payments.
now 1, 3, and 4. I have no idea!
My other question is it says they will value the vehicle at what it's worth. Then do I have to pay the difference of what it's worth and my lease? I don't understand, please help!!!

[autoxer]

3. is going to be $395 + (3) * $435 = $1700.

I think you will have to ask the lease holder what 1. & 4. are going to be.

[creditcardfree]

There is something in lease terminology that is similar to a payoff balance. I'd call the lease company and try to get them to help you. Just tell them you are curious and are not making a decision to cancel the lease at this time. Then they can run down all the fees and cost involved.

Yes, the current value of the vehicle is very important to them. They want to be able to sell the vehicle for what it is worth after you give it back. That is basically what a lease is. They have determined what your vehicle will be worth in 72 months. The purchase prices minus what it will be worth at lease end is the cost to you. That cost is then divided by 72 months in this case. So it is possible you could be upside down in effect and owe more money than the termination fees, ect.

Sorry, I don't know the exact term. You are doing so well.

[amberbamber]

Originally Posted by creditcardfree

There is something in lease terminology that is similar to a payoff balance. I'd call the lease company and try to get them to help you. Just tell them you are curious and are not making a decision to cancel the lease at this time. Then they can run down all the fees and cost involved.

Yes, the current value of the vehicle is very important to them. They want to be able to sell the vehicle for what it is worth after you give it back. That is basically what a lease is. They have determined what your vehicle will be worth in 72 months. The purchase prices minus what it will be worth at lease end is the cost to you. That cost is then divided by 72 months in this case. So it is possible you could be upside down in effect and owe more money than the termination fees, ect.

Sorry, I don't know the exact term. You are doing so well.

I'll call them Thanks for the help!

[TBH]

Amber,
I'm coming late to the discussion, but I just wanted to say you are a superhero for tackling these intimidating numbers. You are going to succeed--doesn't that feel great?!

I agree about the cell phone. I have only one small kid but it is an absolute necessity. I got it when he was 1.5 and I will never go back. I can now leave him at preschool and if he splits his head open or something they can reach me. What a concept.

I am also a devotee of used Japanese cars. AAA plus helps a lot with peace of mind, as does having a cell phone. I'm glad your DH is coming around.

I think everybody has covered the main points, but just one more word of encouragement for cutting back on whole life policies for your kids and on 529 contributions. I am a parent too, and I hear you when you say you want to pay for their weddings, help with house downpayments, pay for college, etc. You want to give them a good start in life. Well, what good will a good start do them if they have to support you and your DH just when they're trying to support a family of their own? The best thing you can do for your kids is take care of yourself first.

I've been really panicked and sad about not being able to save much for college. We really, really need to focus on retirement savings. (I'm 29 and in good shape. Spouse is 43 and playing catch-up). But I decided that I can't realistically pay for all of college. However, I CAN pay for half of it, if I save hard and invest wisely. So this is my goal. If I have more than enough to pay for half, I will be thrilled. But I also don't want to write those tuition checks, hug him at graduation, and then call him the next week to say "honey, now that you have a job, we need a little help...."

One more thing: You don't have health premiums in your budget. That's probably one of the things that's coming out pre-tax and keeping your take-home pay low.

And I agree, the major goal is to be debt free, and then the goal is to have a sustainable lifestyle that relies ONLY on your DH's biweekly pay, leaving the bonus untouched for savings.

Okay, I'm done, sorry for the loooong post.

[amberbamber]

I'm coming late to the discussion, but I just wanted to say you are a superhero for tackling these intimidating numbers. You are going to succeed--doesn't that feel great?!

Yes it absolutely does!

I think everybody has covered the main points, but just one more word of encouragement for cutting back on whole life policies for your kids and on 529 contributions. I am a parent too, and I hear you when you say you want to pay for their weddings, help with house downpayments, pay for college, etc. You want to give them a good start in life. Well, what good will a good start do them if they have to support you and your DH just when they're trying to support a family of their own? The best thing you can do for your kids is take care of yourself first.

I agree...we are starting on the 7 baby steps of DR's and I'm starting to realize that also.

One more thing: You don't have health premiums in your budget. That's probably one of the things that's coming out pre-tax and keeping your take-home pay low.

Yes, my DH pays for them out of his paycheck pre-tax

And I agree, the major goal is to be debt free, and then the goal is to have a sustainable lifestyle that relies ONLY on your DH's biweekly pay, leaving the bonus untouched for savings.

I see this now. Hopefully soon, the bonus will be able to do that for us!

[debtfreeme]

can you tell us exactly what you spend money on? How much do you pay for you car gas each month? for the Food? for your mortgage? what area of the country do you live in?

[TinyFish]

I would stop paying the payment on the truck until it comes due again and apply that extra money to either the debt with the highest interest rate (best financial move) or to the lowest balance (if you need the psychological boost of an early 'win'). If you are still having to add to the CCard balances, I'd use the extra money towards your groceries or whatever is putting you over.

Yes, you don't want to get complacent and forget that big bill is coming back soon, but you should have an idea of how you will budget for it and mark your calendar so you don't forget it.

Sounds like you are moving along, taking steps and making plans and that's great!

For the car thing, we have two certified used Toyotas. I'm pretty sure the Corolla was less than 10K, though this was a few years back. Still runs like a charm, hasn't needed anything but oil. My certified used truck from the same place was a little more and has only needed an alternator replaced and that wasn't so expensive (we had problems with a third-party alarm system on it that was draining the battery and might have been responsible for some of the wear and tear). These are both 98 model years, so that gives you an idea.

Remember, the sticker price isn't necessarily what you will pay! I'd try calling up some dealerships and telling them "I'm looking for a certified used Toyota for under 10K, what can you do for me?". This might be a good move towards the end of the year when they are trying to make room for the new stuff. Wouldn't hurt to try anyhow. I'd drop lots of hints about how you will be buying a nice, NEW Toyota sometime in the future from the nice dealership that can help you out now. I think they like to build brand loyalty with the certified used vehicles.

Here is another thought. Sometimes dealerships might be more amenable to let you out of a lease if you are buying a new car from them. Of course, it would have to be an inexpensive car for this to work and you would have to be careful not to get into trouble with them rolling the least into the car, but again, worth a phone call maybe. Financing a car maybe isn't the best thing, but an inexpensive car with reasonable financing would be better than that killer lease.

Of course, a final thought is to buy a used car from someone you trust who has taken good care of the car. I sold my old Corolla (10-12 years or so, and it was used when I got it) to my brother-in-law and it ran fine for him for years until he had a series of accidents, culminating in wrapping it around a bridge support.

-E!

[amberbamber]

Originally Posted by debtfreeme

can you tell us exactly what you spend money on? How much do you pay for you car gas each month? for the Food? for your mortgage? what area of the country do you live in?

Automobile gas is between 200-250 a month. Food is around 350.
We live in the South East- North Carolina.