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I've mentioned my older sister on this site once or twice before because she is painfully bad with money and is always in trouble financially one way or another. It appears that she has hit a near-bottom situation in her budget and something needs to give soon. Most of this has been communicated to me through my mother, who footed my sister's bills during 8 months of unemployment last year but is no longer willing to help my sister financially. My grandmother also helped and continues to help whenever my sister asks, but my mother has been encouraging her not to bail my sister out anymore.
Just over 5 years ago at age 25, my sister bought a used 2005 Pontiac G6 from a dealership salesman "friend" by trading in a Nissan sedan my mother bought outright for her (value estimated to be about $2-3k at the time, sister never confirmed this on trade in). My sister did this without consulting anyone and did no research on the car, so she took a loan of $36,000 (we know she overpaid a boatload) for 6 years at 16% interest.
This car is likely the biggest financial burden on her right now as she has $8,000 left on the loan and the car is valued at about $4-5k right now if she sold it privately (she has missed regular oil changes and other maintenance, so this may be generous). She missed payments on it and her student loans during her unemployment, so her credit is too trashed to refinance or move it to a credit line. She has no savings, no retirement and is barely breaking even each month thanks in part to a “roommate” who doesn’t pay his fair share of the bills, but she refuses to kick him out. The stress has been wearing on her mental and physical health for months and I’m worried that her job is also very much on the line right now because of it.
I was able to extrapolate the basics of her budget from my mother. These numbers may not be exact, but my mother has tried to go over this with my sister recently, so I suspect this is close to accurate since my sister has no emergency fund or credit to fall back on.
Monthly Net Income: $2,368. Technically $1,093 paid every 2 weeks, so most months it's $2,186, but some months she gets three paychecks)
Variable “Rent” Income from “Roommate”: $100-400. Varies a lot.
Rent: $650. 2 bedroom, one bathroom. I think she’s about 4 months into a one-year lease.
Car Payment: $467.
Gasoline: ~$200. This is my estimate because she commutes about 60 miles a day.
Car Insurance: $160. She’s still required to keep full coverage because of car loan; also high because of a few old tickets.
Student Loan: $210. This was recently garnished from her wages.
Food: ~$300. This is my best guess; my sister doesn’t really know how to cook, but according to my mom she doesn’t eat fast food too often. I suspect it’s not less than this, and she often foots the bill for the “roommate.”
Utilities: Unknown. “Roommate” does not contribute; all bills and lease in sister’s name only.
Cable/Internet: Unknown. I already suggested to my mother that she cut it, but my sister claims it’s the only source of entertainment she has currently and she needs the internet for her work.
Cell Phone: Unknown. I know she has it and uses it frequently, full data package and all. Needs at least the phone part for work.
Assets: None. Already sold most purses and jewelry to pay off debts.
Savings: None
Retirement: None
Car Debt: ~$8,000 @ ~16%
Federal Student Debt: Unknown, but likely between $30,000-40,000. My sister did deferment and forbearance as long as she could, so no way to avoid repayment right now. She also has a private student loan, but my father has been paying it.
Credit Cards: None to our knowledge. I don’t think she has ever qualified for one.
Due to the missed payments on the car loan, my sister has about 18 months-2 years left in payments. The car already has 150,000 miles on it, so we’re also concerned about how well the car will hold together in that time and when she will need to replace it altogether.
My mother believes my sister cannot get rid of the car because she cannot take public transportation to work. I’m not sure this is true, but my sister works in a city 25 miles from home and neither are in good neighborhoods, so my mom may just be worried about her safety. She believes none of her coworkers can take her to work or even carpool.
I know the apartment is borderline too expensive for her to afford without a roommate, but she needs to at least kick out the current guy and get a real roommate if she can’t get him to split the rent and utilities fairly. I think the best solution for my sister would be to move in with my mother for a year and put the rent money toward the car until it’s paid off, but I don’t think my mother would be crazy about it and my sister refused to do this even while she was unemployed.
So I need your help, everyone! What would you suggest for my sister’s situation?
Just over 5 years ago at age 25, my sister bought a used 2005 Pontiac G6 from a dealership salesman "friend" by trading in a Nissan sedan my mother bought outright for her (value estimated to be about $2-3k at the time, sister never confirmed this on trade in). My sister did this without consulting anyone and did no research on the car, so she took a loan of $36,000 (we know she overpaid a boatload) for 6 years at 16% interest.
This car is likely the biggest financial burden on her right now as she has $8,000 left on the loan and the car is valued at about $4-5k right now if she sold it privately (she has missed regular oil changes and other maintenance, so this may be generous). She missed payments on it and her student loans during her unemployment, so her credit is too trashed to refinance or move it to a credit line. She has no savings, no retirement and is barely breaking even each month thanks in part to a “roommate” who doesn’t pay his fair share of the bills, but she refuses to kick him out. The stress has been wearing on her mental and physical health for months and I’m worried that her job is also very much on the line right now because of it.
I was able to extrapolate the basics of her budget from my mother. These numbers may not be exact, but my mother has tried to go over this with my sister recently, so I suspect this is close to accurate since my sister has no emergency fund or credit to fall back on.
Monthly Net Income: $2,368. Technically $1,093 paid every 2 weeks, so most months it's $2,186, but some months she gets three paychecks)
Variable “Rent” Income from “Roommate”: $100-400. Varies a lot.
Rent: $650. 2 bedroom, one bathroom. I think she’s about 4 months into a one-year lease.
Car Payment: $467.
Gasoline: ~$200. This is my estimate because she commutes about 60 miles a day.
Car Insurance: $160. She’s still required to keep full coverage because of car loan; also high because of a few old tickets.
Student Loan: $210. This was recently garnished from her wages.
Food: ~$300. This is my best guess; my sister doesn’t really know how to cook, but according to my mom she doesn’t eat fast food too often. I suspect it’s not less than this, and she often foots the bill for the “roommate.”
Utilities: Unknown. “Roommate” does not contribute; all bills and lease in sister’s name only.
Cable/Internet: Unknown. I already suggested to my mother that she cut it, but my sister claims it’s the only source of entertainment she has currently and she needs the internet for her work.
Cell Phone: Unknown. I know she has it and uses it frequently, full data package and all. Needs at least the phone part for work.
Assets: None. Already sold most purses and jewelry to pay off debts.
Savings: None
Retirement: None
Car Debt: ~$8,000 @ ~16%
Federal Student Debt: Unknown, but likely between $30,000-40,000. My sister did deferment and forbearance as long as she could, so no way to avoid repayment right now. She also has a private student loan, but my father has been paying it.
Credit Cards: None to our knowledge. I don’t think she has ever qualified for one.
Due to the missed payments on the car loan, my sister has about 18 months-2 years left in payments. The car already has 150,000 miles on it, so we’re also concerned about how well the car will hold together in that time and when she will need to replace it altogether.
My mother believes my sister cannot get rid of the car because she cannot take public transportation to work. I’m not sure this is true, but my sister works in a city 25 miles from home and neither are in good neighborhoods, so my mom may just be worried about her safety. She believes none of her coworkers can take her to work or even carpool.
I know the apartment is borderline too expensive for her to afford without a roommate, but she needs to at least kick out the current guy and get a real roommate if she can’t get him to split the rent and utilities fairly. I think the best solution for my sister would be to move in with my mother for a year and put the rent money toward the car until it’s paid off, but I don’t think my mother would be crazy about it and my sister refused to do this even while she was unemployed.
So I need your help, everyone! What would you suggest for my sister’s situation?
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