Going crazy at work - new car related

[disneysteve]

I have a 20 year old employee who is clueless about money. There have been various examples to document this, but yesterday really nailed it. She told us that she was going to get a new car this weekend. What is wrong with her car, someone else asked. Nothing. But my father wants me to start leasing my cars from now on.

AAHHH!! Here is a girl with a 3-year-old car. I believe she has a 6-year loan, so she is halfway there. She intends to trade it in and lease a brand new Toyota Solara convertible. By her own admission, "I'm getting tired of this car. And all my friends are getting new cars." Bad enough she is ditching a car with only 23,000 miles on it. But then she is compounding the damage by replacing it with a lease on an expensive sports car (over $25,000).

Her reasoning, if you want to call it reason, is that since she is single and lives at home with no other real expenses, she has no other big financial needs so she doesn't mind spending all her money on her car. She seems to have forgotten conversations we've had within the past few months about how she can't afford to travel with her friends, has nothing in savings and can't ever manage to put any money away.

Maybe there is just some personal finance gene that folks like this are missing from their DNA. Perhaps I should go into research. I'd make a bundle.

[Aleta]

But, she told you that her father wants her to start leasing cars. He probably has his own business and considers leasing to be the way to go. That's what they do is trade them in in 2-3 years. See why our nation has so many in debt. Sounds like to me that she is trying to justify what she wants by blaming someone else.

All I can say is that that car with its low mileage will be a good buy for someone looking for a used car. Now, with the type of car that she wants to buy, her insurance will go up as well. Nothing you can do to help someone like that as long as their parents are acting like hind catchers. Not to mention that she is probably upside down with her loan if she sells now.

[kv968]

Steve, all I can say is take a deep breath and let it go. I've tried to explain such financial things to some of my co-workers and it's like banging your head against the wall sometimes. If you don't say what they want to hear or justify their decisions, they write you off as not knowing what you're talking about or just ignore the facts you present no matter how logical they may be.

[disneysteve]

Originally Posted by Aleta

Not to mention that she is probably upside down with her loan if she sells now.

I mentioned that and she said she doesn't think she owes more than the car is worth, but I doubt that, especially since she bought it on a 6-year loan.

[project15]

Originally Posted by disneysteve

I mentioned that and she said she doesn't think she owes more than the car is worth, but I doubt that, especially since she bought it on a 6-year loan.

And she won't get near as much trading it in as if she were to sell it privately.

[Ima saver]

leasing a car, at any age, is not a good idea. Clark Howard calls leasing, "fleecing"

[Hedy]

Please let us know if you ever research this gene.
Egads.

[lieweheksie]

we only learn by experience...she just hasn't "got it" yet- just be there when she asks for help again, and again and hopefully before she's 30 she'll have figured it out
she's young so of course she'll listen to Dad-if they seem to be doing ok waht reason would she have to doubt his advicehttp://www.savingadvice.com/forums/images/smilies/rolleyes.gif

[Tree0164]

Money lessons are often earned at home. I betcha her father is in debt up to his eyeballs as well.

Leasing is not good. Keep the car and drive it into the ground.

[scfr]

disneysteve - Probably not a darn thing you can do about her decision, especially since her dad supports it. All you can do is keep being a good example to her, and maybe something will sink it down the road.

A friend of DH who is about 10 years older just traded in a car w/ under 100K miles on it for a brand-new $34K vehicle that gets awful gas mileage. He has also expressed jealousy over the fact that DH & I had a paid off mortgage.

Hmm ... Let's see ... last time we got a 'new' car it was to trade in our 170K mileage car for another used one that cost $3K and gets pretty decent gas mileage ... Astonishing that we had money to pay down our mortgage early, isn't it?

My point is, some people not only just don't get it, I don't think they really want to.

[vince]

It amazes me how dumb people are with money. I know a guy that plays the lottery everyday $50 worth but he has no money for lunch and tells the boss he needs a raise. Sounds like the same mentality here also

[disneysteve]

Originally Posted by lieweheksie

just be there when she asks for help again, and again and hopefully before she's 30 she'll have figured it out

Originally Posted by scfr

All you can do is keep being a good example to her, and maybe something will sink it down the road.

Both good advice.

[anonymous_saver]

Originally Posted by disneysteve

I have a 20 year old employee who is clueless about money. There have been various examples to document this, but yesterday really nailed it. She told us that she was going to get a new car this weekend. What is wrong with her car, someone else asked. Nothing. But my father wants me to start leasing my cars from now on.

AAHHH!! Here is a girl with a 3-year-old car. I believe she has a 6-year loan, so she is halfway there. She intends to trade it in and lease a brand new Toyota Solara convertible. By her own admission, "I'm getting tired of this car. And all my friends are getting new cars." Bad enough she is ditching a car with only 23,000 miles on it. But then she is compounding the damage by replacing it with a lease on an expensive sports car (over $25,000).

Her reasoning, if you want to call it reason, is that since she is single and lives at home with no other real expenses, she has no other big financial needs so she doesn't mind spending all her money on her car. She seems to have forgotten conversations we've had within the past few months about how she can't afford to travel with her friends, has nothing in savings and can't ever manage to put any money away.

Maybe there is just some personal finance gene that folks like this are missing from their DNA. Perhaps I should go into research. I'd make a bundle.

Some people just don't get it do they? It's not like I think that everyone should do the same exact thing as me, but man, I just wish something would stick with them!

My suggestion is this. Buy your co-worker as a present the Suze Orman book on the Young Fabuluous and Broke. I don't know if you like Suze, but it does have the extreme basics in the book, which your co-worker sounds like she really needs. Get it from a used bookstore and give it to her, say something like "Oh I was just paging around at this used book store and saw this book, and I thought you might like it. It was only a few bucks". Hopefully, she would just think it was kind of you to think of her. Also, even if she doesn't read the book for 5 more years, she might eventually and it might stick with her. I think it's worth a shot.

Sometimes I feel like buying mass quantities of financial books and just handing it out to all my friends and co-workers.

[disneysteve]

Originally Posted by anonymous_saver

My suggestion is this. Buy your co-worker as a present the Suze Orman book on the Young Fabuluous and Broke.

Great idea. Maybe not out of the blue, but for the holidays this year.

[disneysteve]

Originally Posted by anonymous_saver

It's not like I think that everyone should do the same exact thing as me

And why not?

[Aleta]

Unfortunately, unless someone is receptive to something, they're totally hard of hearing about what you're saying. They will have to be down-and-out or looking for an answer. A few years ago, I talked to a family member about getting rid of the PMI on his mortgage and getting a whole new mortgage thereby saving them oodles of money. Their response was that they didn't have the money for the closing fees for the new loan. I told them that they would get that money back in no time. This is when the rates were 5+. Although they did have money to finance a new vehicle totally unneeded. I have sent them some financial books as well. You can hit your head against the wall but they won't listen. Now, after some years, I see somewhat of an interest. It was like was said earlier, the best you can do is live your life in front of people and maybe they will see something that they want because of you.

As for the book, that one is pretty good and especially for younger people and if you don't pay alot for it, it could be worth it. It's worth a try.

[Elgin526]

Well, she's 20, and more often than not 20 = stupid. I know I did a lot of dumb $$$ things prior to the age of 25. Not nearly as stupid as this, but dumb none the less.

Maybe ask a few questions, find out if she really knows what a lease is, and what it will mean vs keeping her current car until it's paid off. Maybe she just needs to sit down and look at the numbers. Right now all she hears is "brand new sporty convertible", and that's enough to shut down the brain waves of older adults, never mind someone still in college!

[Hedy]

Originally Posted by anonymous_saver

Some people just don't get it do they? It's not like I think that everyone should do the same exact thing as me, but man, I just wish something would stick with them!

My suggestion is this. Buy your co-worker as a present the Suze Orman book on the Young Fabuluous and Broke. I don't know if you like Suze, but it doesn't have the extreme basics in the book, which your co-worker sounds like she really needs. Get it from a used bookstore and give it to her, say something like "Oh I was just paging around at this used book store and saw this book, and I thought you might like it. It was only a few bucks". Hopefully, she would just think it was kind of you to think of her. Also, even if she doesn't read the book for 5 more years, she might eventually and it might stick with her. I think it's worth a shot.

Sometimes I feel like buying mass quantities of financial books and just handing it out to all my friends and co-workers.

Good idea. Suze actually spells out leasing vs. buying in excruating detail in that book.

[My English Castle]

Hi Steve:
I feel your pain. I teach at a university and am surrounded by students who lease cars, have expensive cell phone plans and all sorts of electronics--blackberries and ipods etc, then they tell us they can't "afford" to buy a textbook and have to work all kinds of hours because school is so expensive. This from someone drinking $2.50 "vitamin" water from the vending machine. But short-term thinking goes with being 20, I guess.

Have her look at consumer reports or this link from a bankruptcy attorney.
Ten Stupid Things People Do to Mess Up Their Credit

Then take two ibuprofen and call yourself in the morning!

I'm feelin' ya Steve

as an old, decrepit, broken down 30 something, I've become a bit of a financial information source for many of the young (and surprisingly not so young) co-workers around me.

we talk about saving money, what should I do with that "401(k) thingy" and so forth.

in almost every single case, as soon as we get to the part where they don't get to buy everything they see just because they have room on a credit card...the eyes glaze over and I start sounding like the teachers in the Peanuts cartoons.


it's really frustrating and I don't know how to break through that.


I have a young lady in the office now doing almost exactly what you're talking about only at least she's buying the car.

"Why do you think you need another car (to replace the one you bought last year)?"

"I just don't like it anymore, I never really did"


sigh


but truth be told, I wasn't much different at that age and probably wouldn't have listened either. I didn't start turning it around until I lost my job with what I considered my career employer at 25 and learned that creditors don't care, they still want your money! (shock...surprise)