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    Debt/Saving Advice

    Hello All,

    I'm in need of some advice. I'm a 22yr old student, gross $2400/month, and still live at home. I had a savings account that I had been contributing to for about 2 years but had a rough summer last year so it's virtually gone. Anyway I have a vehicle payment at $540 with $18,125 to go. I know, I know it's alot of vehicle for my age. I also have about $3500 in collections, mostly medical bills and an unpaid cell phone bill. In all, I pay around $1100 a month in bills. Not including gas and necessities. I want to start a little EF before I start paying my debt down considering I'am not paying any interest on these collections. Is this a sound idea??

    Thanks,
    Brandon.

    #2
    If you are living at home (rent-free, I am assuming), what is the $1,100 going toward? If you post a break-down of all your expenses and income for a month, folks here will be able to help you determine the best course of action to take.

    Comment


      #3
      It isn't that you bought too much car for your age. It is that you bought too much car for your income. What is the current value of the car? You really need to unload that and replace it with something cheap but functional. You can do that for under $5,000. That would reduce your debt considerably and lower your monthly payment, freeing up income to put toward other debt and savings.

      Otherwise, I'd say the same as boosami. We need to see your income, expenses and details of debt to give more specific advice.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #4
        Agreed... sell your car and plow the pmt into the debt. Buy a 1000 beater...

        Comment


          #5
          Bills as listed:

          1. Vehicle - $540
          2. Insurance $150
          3. Phone - $100
          4. Boat - $260

          My truck is worth about $10k, major problem. My insurance is out of control.
          I'm sure most of you are wondering why I have a boat. My dad purchased back in 07' with a %50 down payment. He later had an injury while skiing and told me I could have it as long as I take over the payments. I basically recieved a $45,000 boat for $260 a month without it being on my credit.

          Comment


            #6
            Originally posted by bcoutsfly View Post
            Bills as listed:

            1. Vehicle - $540
            2. Insurance $150
            3. Phone - $100
            4. Boat - $260

            My truck is worth about $10k, major problem. My insurance is out of control.
            I'm sure most of you are wondering why I have a boat. My dad purchased back in 07' with a %50 down payment. He later had an injury while skiing and told me I could have it as long as I take over the payments. I basically recieved a $45,000 boat for $260 a month without it being on my credit.
            With all due respect, this is nuts! So what if you got the boat without it being on your credit. YOU CAN'T AFFORD IT! How much is it worth? Sell the boat. Use the proceeds to pay off the $3,500 in collections. Next, I might still sell the car but it depends on how much you'll get for the boat.

            Why is your phone $100/month? We have 5 people on a family cell plan and our bill is about $130/month - for 5 people. You need to cut back to the cheapest plan you can get.

            You are 22 and living WAY beyond your means. If you don't clean this up now, it will only spiral farther and farther out of control.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              I know it's out of control. I'm fully aware of that. When I recieved the boat I was grossing $4k/month. It was back breaking work that I didn't want to do anymore so I quit to go to school. Now I'm stuck with the same bills making less money. Selling either one of them will be a challenge. Who buys boats and big diesel trucks rite now??

              Comment


                #8
                Originally posted by bcoutsfly View Post
                Selling either one of them will be a challenge. Who buys boats and big diesel trucks rite now??
                Everything sells at the right price. List on ebay and/or craigslist.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #9
                  I called to pay an open account off. I asked the agency if they would settle on a lower amount considering the account is 4 years old. They brought it down from 270 to 215. But said if I agree to a settlement it'll remain on my credit, versus paying the full amount and it being wiped off in 30 days. Should I believe them??

                  Comment


                    #10
                    You have stuff in collections so your credit it probably already shot.

                    Get it in writing then pay with a cashier's check.

                    Sell the car and boat... or you are doomed.

                    Comment


                      #11
                      Originally posted by disneysteve View Post
                      You are 22 and living WAY beyond your means. If you don't clean this up now, it will only spiral farther and farther out of control.
                      Wise words right here. Man I was just like you when I was 22. New car, new motorcycle, nice clothes, nice watch, cell phone, credit cards, etc. I was only making like $11/hr back then and looking back at it, it was a living hell and to this day has impacted my life greatly.

                      I remember wishing the car would be stolen cuz I didn't want to pay for it anymore. Both the car and insurance ate up 2 paychecks. When I didn't have money to pay for the cell or gas which was pretty much never guess where it went? You got it kid, the credit card. Or if I wanted to take a girl out on a date, credit card.

                      Now I am 29 years old, living at home with my mother with almost 20k in credit card debt, and basically nothing in savings. Fortunately I have great credit and never missed any payments. I have finally smartened up and started wiping out debt but man, if I knew then what I know now I would be a very wealthy 29 year old.

                      Dump the truck, dump the boat, find out who your real friends are when the boats gone and get your crap together now and live like a king 5 years from now.

                      Comment


                        #12
                        Originally posted by sofocused978 View Post
                        I remember wishing the car would be stolen cuz I didn't want to pay for it anymore.
                        There was a story on the news the other day about a sharp increase in car fires being set by the owners because they can no longer afford the payments and are looking to get the insurance money. They had surveillance videos showing people starting the fires in their own vehicles.
                        Steve

                        * Despite the high cost of living, it remains very popular.
                        * Why should I pay for my daughter's education when she already knows everything?
                        * There are no shortcuts to anywhere worth going.

                        Comment


                          #13
                          Originally posted by disneysteve View Post
                          There was a story on the news the other day about a sharp increase in car fires being set by the owners because they can no longer afford the payments and are looking to get the insurance money. They had surveillance videos showing people starting the fires in their own vehicles.
                          Ya I believe it. Funny thing was I woke up to go to work one morning and it WAS gone. Then I was furious because of all the stuff I lost. You would think at that point I would have smartened up but I went out and bought another car cash and chose not to have collision insurance. One night I let some girl drive my car and next thing ya know its totalled and I don't have a car again. Then I had to finance another one. Live and learn. Sorry to derail.

                          Comment


                            #14
                            I owe 18k on a truck thats worth 10k. I understand I need to sell it, in fact I'd love to sell it. If someone can enlighten me on how to go about this, it'd be greatly appreciated. I just don't see it being possible. The best idea I can come up with would be to pay it down to market value then hopefully find a buyer that would be dumb enough to take it off my hands.

                            Comment


                              #15
                              Go to KBB.com or edmunds.com and figure out the private party sales price. Sell it and ask your current lien holder to write you a note for the difference.

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