Thank you. And for the record, I'm not asking for sympathy, it isn't even about me. I think some people here are actually jealous that she makes 75K and they don't. Mad at the world type people. I have everything for her under control, now. The cards a consolodated and she now has a budget to follow. I'm just not sure about the car situation, she is so upside down and in the hole on this vehicle that I really didn't know how to approach it, so I started this thread.
What is her job? I mean she must be pretty smart to get a 75k a year job. However having CC debt is never a smart thing to do. She needs to go from that acura to an aveo and that would get rid of her car problem.
She works for Cisco networking academy. And she has a masters degree, actually she's underpaid for her education and her level of work experience. Getting into an aveo would be great and she's open to that, she's even open to getting into a $2k junker type used car, but that still doesn't help her get out of her current one without just turning it in and letting them repo it.
Let's look at the bills that she has to make: $800 rent $400 bills $550 cc loans $250 student loans ----------- $2000 The car has to go, try to sell and get a Civic. Payments could be only $3-400 a month and the car insurance would be lower. First thing is to pay off whatever is costing the most in interest, which would be the car. If she gets rid of it, pay off the CC bills. Once one monkey goes off the back, the rest can fall off.
Sounds like a few different things are going on here: 1 - My guess is she traded her old car for this current one, was upside-down on it, and they rolled the excess into the new loan. With as big a gap as you say, this may have even happened more than once with her. 'WE'LL ACCEPT YOUR TRADE, NO MATTER *HOW* MUCH YOU OWE!!!' Of course they will. 2- To have had as much credit card debt as she had, with the money she was making, indicates that she is not very well educated in how money works, and hence has no real idea how to manage it. This needs to change immediately, or you need to vanish before she drags you any further into it. 3 - I would also guess that she has either bought a house she can't afford, or lives in some kind of apartment or condo which is beyond her means. With the financial market in its current shape, there's not a whole lot a person with bad credit can do about it right now, so she's just going to have to deal with it. 4 - Lastly, even with a mortgage and a stupidly ridiculous $700+ car payment for another how many months? (Hmm, 740 per month @ 15 months, plus 38k remaining, means she still has almost 5 years left on the note - astounding! What $50,000 car is she driving? A Jag? A Benz, BMW, or what? To have that payment and still have that much left means she financed that thing for 6 years at least.. where did you find this girl? In the head-trauma ward?), she STILL should not be having that much trouble making ends meet. Might a large portion of her monthly funds be going to the liquor store, or maybe up her nose? This is stuff YOU need to know, again, before you get dragged down into it. A solution: it's not much fun, but needs to be done.. Make a list of ALL actual monthly debts she has - not expenses like utilities or food and gas, but actual things she can pay off. Commit to at least $300 extra per month she can put towards those bills. Identify the bill which has the LEAST amount of time left to pay it off. Add this $300 per month to it. When ti is paid off, add that $300 PLUS however much the payment was for what was just paid off. Add BOTH of those to the next quickest item left to pay off. When it is done, add THAT payment to the previous amounts. Follow this FAITHFULLY and very very soon, in just a few years, she will have everything paid off. (you're welcome, a lot of people actually pay a lot of money to learn that 'program' I just gave you for free.. )
Good advice, but let's say she sells the Acura for $21K, she still has to come up with the other 17K where she is upside down.
Most people are not able to break bad financial habits (my fiancee included). I'm great with money. I'm able to support myself, her, and our son on 30k. I have a 2007 Honda Civic and just bought a new house. I'll never understand why people who make far more money than me are in terrible financial trouble. It isn't easy to be good with money, but it isn't that hard.
Yet she struggles to eat? Again, BIG lifestyle change. Brown bag it to work instead of 'going out with the girls' to lunch every day at Chili's. Cook her own dinner. Have a budget and spend every penny on debt, groceries, gas...that way there isn't money left over to spend on crap. Map out every dollar. Figure out how much gas she uses and get her a pre-paid gas card. Get her a hobby that doesn't involve sitting on her ass, like a cheap gym. Cisco may even have a wellness plan that pays for a gym for her. Or something else cheap like bird watching or running. No more going out at night. Cut out the cable TV. Like I said before, shop a wal-mart, shop generic food. Shop at discount clothes stores like Ross and TJ Maxx. No more sodas. No more snacks. No more liquor/beer. All of this crap adds up like crazy. Cut up the credit cards. Like Swoly said, it's silly to cancel them. Just make them inaccessable for impulse buys. YOU could take them and just tell her you are canceling and cut them up. She may lose a ton of weight, get responsible, get out of debt and may even look good enough to you in six months to a year to allow her to give you thank-you se...er...intercourse.
Cut off high speed modem, cell phone, eat out. Downsize to an aparment that will cost her much less than 1200. Do everything she can to get out of that car payment! That's insane, she should have asked you to go with her when she bought the house (i mean car!).
I know all about high car payments. When I traded in my 350Z for a Lincoln LS, I didn't get good enough value for it. So, that difference was tacked on to my loan for the Lincoln. Then I kept the Lincoln for only about 7 months; had some tire issues and was talked into by the wife to get a brand new Altima. So, I traded it in for a brand new (2006) Altima. Now, this is an Altima that is a 4 cylinder and my car payment (even with a discount) is 475 a month. But it is because I have carried over, not once but twice upside down value from previous car notes. Sucks out the ass big time. Anyway, what glad_ken posted sounds about the only thing you can do with the car. Too bad she is not a home owner and could go with a home equity loan. This would be similar to a debt consolidation loan (as you probably know) but at least she could sell the car and use the HE loan to pay off the difference that is owed. But since owning a house seems to be out, the only thing possible for her is to try to pay a little more than the minimum pyt on the car. Maybe pay $50 bucks + the payment for a year and then bump the extra payment to $100 more for the next year, etc. But other things that she could do and was mentioned by others is find an apartment that has cheaper rent (go to an efficiency apartment if she has to), get rid of internet and cell phone, change her car insurance (you can mess around with the deductibles which can cause your rate to go down), no more eating out for sure. Have her (or you do it for her) come up with a monthly budget for groceries and stick to it. I try to do $400 bucks a month for my family and that's for 3 people (me, wife, and 7 almost 8 year old daughter) and that works out somewhat reasonably well (we do go over but it will be maybe 100 bucks one week and then 2 weeks later, we won't need $200 in groceries - it balances out if you see what I am saying). She should definitely not need to buy any more clothes, shoes, purses, jewelry, etc. She will have to learn to live with the wardrobe she has for at least a year, maybe longer. However, if she feels like this is impossible - then she needs to buy from T.J. Maxx, Target, Kohl's, Marshalls, or even Goodwill. Also, have her buy her groceries from a discount food store compared to a Kroger or a Publix. I mean there are ways that you can cut your expenses down - you just have to be disciplined to do so. Believe me - I discovered this the hard way after I got married. Now, things are a lot smoother for us financially but it is because we have a plan and we follow it the best we can. Also, if she is expecting to get a tax refund back, have her apply as much as she can to debt (especially the car).
What happend to drive the car until at least you pay it off?? These carry over seems like some crazy idea. I think a car should be driven for at least 10 years if not 20! I plan to drive my 97 camry until it dies.
Thank you RM95. And 100% agreed. and...Not everyone is lucky enough to live in the greatest state in America - where cost of living is ungodly cheap.
Get a 20K loan, its a lot less than 37K. Sell the Car for 21K. Buy a car for 3K. Use the remaining 37K to pay the difference. Now you've gotten a new loan, but you only owe 20K instead of 37K. You've reduced your debt by 17K and you can pay MORE money per month on your 20K loan. Paid off in 2yrs if you pay $800 a month. Deliver pizza at night and pay 1500-2K a month on the loan...paid off in 1 year. It can be done, but it takes a lot of work.
Isn't that like saying the cost of living in River Oaks is higher than in Houston? Scottsdale's basically Phoenix. Even factoring the extra price of gas, if living in Scottsdale is like living in NYC or Cali as you're making it seem, move out to the burbs and drive into work. It's not clear who would loan the difference plus the note on the new, considerably cheaper and crappier, car (as there's really no collateral in that case), but it seems like that's the way to go. IMO, there really haven't been a lot of jackasses in this thread. Rather a situation which made no sense presented itself. It was impossible to give a proper answer without knowing more, especially given the fact that, even in the highest cost of living places in the country, $75k for a single, childless adult is still doing well enough. Sounds like you have a good start consolidating all the debt. Even with my comment above, it sounds like her actual cost of housing ($1,200) isn't horrible (especially for Scottsdale ) With the $4,000 in less $1,200 less $735 less $550 less $150 less $250 she is still >$1,000 a month extra, which should good for food and some entertainment.
