Monthly Expenses/ Income Advice please

**disneysteve** · 10-12-2011, 11:11 AM

Welcome to the site, Michael.

Where to begin?

You neither need nor can you afford two cars. And you certainly couldn't afford a brand new Prius. Rule of thumb is to pay cash for cars but if you must borrow to have a payment of no more than 10% of your monthly income for no more than 3 years. Just the Prius at $478/month is about 20% of income. Add in the Jeep and you are spending nearly 32% of your income on cars! That is ridiculous.

If your mom wants the Jeep, sell it to her. At the very least, let her be responsible for the payments though I'd much rather see you put it in her name and get it off your credit report. The other option is to resell the Prius and keep the Jeep for yourself. Let your mom get her own car.

Why are you paying your father's cell phone bill?

Why is internet $85? That's rather high.

I'll stop there for now and see what others have to say.

**bjl584** · 10-12-2011, 11:20 AM

I would do as Steve says and do something about the car situation. You need to cut back to one vehicle. Does your Mom give you any money toward the Jeep since she is driving it? How long has her car been broken down, and is she having it repaired? Are you going to be paying for the repair of the car too?

**disneysteve** · 10-12-2011, 11:43 AM

Originally posted by artwest

The maximum number of credit cards anyone should have is 1

Why? As long as you are using your cards responsibly, I see nothing at all wrong with having 2 or 3 or 6 if you care to. I think 1 or 2 is probably best to concentrate your spending and maximize reward programs but otherwise, I don't think the number of cards is important. What is important is how you use them. My wife and I have 4. Which one we use depends in part on what special offers each one has at any given time.

**skydivingchic** · 10-12-2011, 12:30 PM

I generally agree with others that the cars are an issue. However, you didn't mention any type of rent, food, or electricity payments. I gather that means you are living rent and living expense free with your parents. In that case I might almost consider the Jeep and cell phone payments as your "rent/living expense" contribution to the household. Regardless, the Prius is too expensive given your income as DisneySteve pointed out.

Why are you paying for credit monitoring? Unless you have been an ID theft victim, this is really unnecessary. You can get a copy of each of your credit reports for free once per year. I rotate which bureau I get mine from so that I get a copy of my report from one of the bureaus every 4 months. Check to make sure there is nothing incorrect or unusual. Keep paying all your bills on time and keep your credit utilization ratio low. That should be plenty to keep your credit score in good shape.

Are you saving anything for retirement? Do you have any non-retirement savings?

**disneysteve** · 10-12-2011, 12:37 PM

Originally posted by skydivingchic View Post

you didn't mention any type of rent, food, or electricity payments. I gather that means you are living rent and living expense free with your parents. In that case I might almost consider the Jeep and cell phone payments as your "rent/living expense" contribution to the household.

I had the same thought. If that's the case, that might be okay, though I still don't like the idea of the Jeep being in your name when you aren't the one using it. What if your mom gets in an accident? What liability might you have in that case? Is she listed as a driver of the car on your insurance policy?

**playamwj12** · 10-12-2011, 12:58 PM

Originally posted by bjl584 View Post

I would do as Steve says and do something about the car situation. You need to cut back to one vehicle. Does your Mom give you any money toward the Jeep since she is driving it? How long has her car been broken down, and is she having it repaired? Are you going to be paying for the repair of the car too?

I will not pay for any repairs to her car. She is currently only working part-time. As I live in her house I don't ask for any money for the jeep.

Originally posted by artwest

Welcome Michael and thank you for your service!

What are the balances on the cars? You may want to sell both of them and buy a less expensive one. You say your mom's car is broken. She should either get it fixed or trade hers in and get another vehicle.

Why are you spending $10 per month to track your credit?

$85 for internet seems high.

How much is the personal loan?

You should be able to pay off the credit cards fairly quickly. Once you do, close the account and shred at least 2 of them. The maximum number of credit cards anyone should have is 1...and that would be 1 more than I have.

The personal loan was for $4500 apparently my parents fell behind on stuff and rather than ask me to help they just kept falling behind until $4500! in bills accumulated. I live in a small area, that is the cheapest internet offered. I am a ID theft victim in the past, and I choose to check my credit each month to insure my own protection.

Originally posted by skydivingchic View Post

I generally agree with others that the cars are an issue. However, you didn't mention any type of rent, food, or electricity payments. I gather that means you are living rent and living expense free with your parents. In that case I might almost consider the Jeep and cell phone payments as your "rent/living expense" contribution to the household. Regardless, the Prius is too expensive given your income as DisneySteve pointed out.

Why are you paying for credit monitoring? Unless you have been an ID theft victim, this is really unnecessary. You can get a copy of each of your credit reports for free once per year. I rotate which bureau I get mine from so that I get a copy of my report from one of the bureaus every 4 months. Check to make sure there is nothing incorrect or unusual. Keep paying all your bills on time and keep your credit utilization ratio low. That should be plenty to keep your credit score in good shape.

Are you saving anything for retirement? Do you have any non-retirement savings?

3.5% of my gross pay goes into 401k and 3.25% gets matched. I have been doing this for about a year now. I agree with you on the jeep/cell phone bill. My parent's raised me and I want to work help them out as well. As that's important to me.

Originally posted by disneysteve View Post

I had the same thought. If that's the case, that might be okay, though I still don't like the idea of the Jeep being in your name when you aren't the one using it. What if your mom gets in an accident? What liability might you have in that case? Is she listed as a driver of the car on your insurance policy?

She's a driver on my insurance. She'll be covered and she's superrr cheap to have on there. I am going to try really hard to eliminate one of the payments. I live in apart of Virginia, where 4X4 is a must during the winter months. Which is why I have two vehicles.

The internet is also a household expense, not just for myself.

Thanks everyone for your replies

**BMEPhDinCO** · 10-12-2011, 02:14 PM

So it sounds like you do NOT pay for food, housing, utilities (other than phone & cable/internet)...

If that's the case, you have ~$774 a month available... so:

Month 1: Pay off Capital one visa ($650) + $124 to Chase
Month 2: Pay off Capital one MC ($650) + $164 to Chase
Month 3: Pay $874 to Chase
Month 4: Pay off Chase ($468) + pay $406 to personal loan + regular loan payment
Month 5: Pay $874 to personal loan + regular loan payment
Month 6: Pay $874 to personal loan + regular loan payment
Month 7: Pay $874 to personal loan + regular loan payment
Month 8: Pay off personal loan ($292) + $787 to savings

So at the end of 8 months from now, you would only have the cars left, assuming you haven't sold one or paid it off (you didn't say how much was left on them) and you would have 2 months of expenses (not including loans) in savings. For month 9, I'd bump that up to 3 months of expenses and then really hammer at the car loans... ideally in 1 year from now, you'd have savings, one or no car payments, and would be free to move past the debt to real savings...

Some other things:
1. don't think in terms of monthly payments, only total amounts - it sounds worse and that's a good thing since it will help you pay down faster!
2. It's good that you are helping your parents, but to the tune of $713.50 a month, that's quite a bit, even for "free" room and board.
3. At 23, you should start figuring out longer life term plans - do you want to go to school? buy a house? Start saving for those options as well...

good luck!

**playamwj12** · 10-12-2011, 02:22 PM

Originally posted by BMEPhDinCO View Post

So it sounds like you do NOT pay for food, housing, utilities (other than phone & cable/internet)...

If that's the case, you have ~$774 a month available... so:

Month 1: Pay off Capital one visa ($650) + $124 to Chase
Month 2: Pay off Capital one MC ($650) + $164 to Chase
Month 3: Pay $874 to Chase
Month 4: Pay off Chase ($468) + pay $406 to personal loan + regular loan payment
Month 5: Pay $874 to personal loan + regular loan payment
Month 6: Pay $874 to personal loan + regular loan payment
Month 7: Pay $874 to personal loan + regular loan payment
Month 8: Pay off personal loan ($292) + $787 to savings

So at the end of 8 months from now, you would only have the cars left, assuming you haven't sold one or paid it off (you didn't say how much was left on them) and you would have 2 months of expenses (not including loans) in savings. For month 9, I'd bump that up to 3 months of expenses and then really hammer at the car loans... ideally in 1 year from now, you'd have savings, one or no car payments, and would be free to move past the debt to real savings...

Some other things:
1. don't think in terms of monthly payments, only total amounts - it sounds worse and that's a good thing since it will help you pay down faster!
2. It's good that you are helping your parents, but to the tune of $713.50 a month, that's quite a bit, even for "free" room and board.
3. At 23, you should start figuring out longer life term plans - do you want to go to school? buy a house? Start saving for those options as well...

good luck!

Thank you so much for this post it is going to help me loads! I forgot to mention I have a Bachelors in Criminal Justice and I plan on furthering my education. I want to be a Warden of prison/ Write reform for Immigration those are my goals.

Buying a house is my whole reason for saving money, as I know it will take some time to save up a down payment for one. I just don't know where I want to live. Time will answer that question though. Appreciate it!

**playamwj12** · 10-13-2011, 06:54 AM

I am going to try and keep everyone updated here.

Part of my Drill check came this morning I did 5 days this month so I should clear at least 500 total.

I received $221 total. I paid $221 towards Capital-one Credit Card. The 2nd half of the drill pay will go towards it also.

Moving on to real savings soon, I hope.

**photo** · 10-13-2011, 08:50 AM

Originally posted by playamwj12 View Post

I paid $221 towards Capital-one Credit Card. The 2nd half of the drill pay will go towards it also.

Moving on to real savings soon, I hope.

At this rate, you will.

**playamwj12** · 10-16-2011, 02:34 PM

Happy to announce I just sent $250 more to capitalone visa. This will leave a balance of $241 on the card and I hope to pay it off later this week when I receive the other half of my Army pay. After I pay off my credit cards and personal loan,id llike to start an emercency fund and then start hittting these car loans hard! I owe 12000 on the jeep 27000 on the prius and I'm ready to knock em down!

**BMEPhDinCO** · 10-17-2011, 12:59 PM

Great Job!! Sounds like you can get the first card paid by the end of this month, which is awesome!

Keep up the pace and post to brag/share/give yourself a boost! ;-)

**disneysteve** · 10-17-2011, 01:23 PM

I'm glad to hear that you are making progress, but I'm still concerned about the cars. If you want a vehicle with 4 wheel drive, that's fine, but even with all other debt paid off, you still can't afford both vehicles. Even without the Jeep, you can't afford the Prius. If the Prius isn't useful to you year-round, I'd get rid of it, even if you have to take a loss to do so. It doesn't make sense to own, insure and maintain 2 cars.

**playamwj12** · 10-20-2011, 01:14 PM

Originally posted by BMEPhDinCO View Post

Great Job!! Sounds like you can get the first card paid by the end of this month, which is awesome!

Keep up the pace and post to brag/share/give yourself a boost! ;-)

Thank you so much! Words of Encouragement are very appreciative!

Originally posted by disneysteve View Post

I'm glad to hear that you are making progress, but I'm still concerned about the cars. If you want a vehicle with 4 wheel drive, that's fine, but even with all other debt paid off, you still can't afford both vehicles. Even without the Jeep, you can't afford the Prius. If the Prius isn't useful to you year-round, I'd get rid of it, even if you have to take a loss to do so. It doesn't make sense to own, insure and maintain 2 cars.

Thanks for your comment steve. I am researching/ asking around the best idea to sell the jeep without taking a huge loss. It's worth less than what I owe of course.

Idea's anyone?

Monthly Expenses/ Income Advice please