Difficult decision to make to get ahead quickly

I know you guys are pretty smart and responsible, plus I should take what info I get online with what I paid for it, but I need some advice on what to do.

First off, I am going to get my eyes examined tomorrow and am pretty sure can get a license to drive, just need new glasses. Well, thats a doc appointment, 1 if not 3 pairs of glasses in all. Lets not forget getting a car, driving school insurance, gas, etc.

As is, at my current job I hate more and more every day, I only have 300 bucks after current bills are paid for the month. Rent, power, home phone with no features, no cable tv, no internet (share with parents account) food, 80 bucks for roach coach food, 25 for carton of smokes, 13 for sat radio. I did not factor in 90 for bus fair. 3.50 for a sandwich and fries is rather cheap now a days from the roach coach and I would find it difficult to cut that out. So, if I did cut the roach coach, would need to buy more food and likewise if I quit smoking.

So, 300 bucks right now. Thats not likely enough to make a car payment, insurance, fuel, not to mention a couple hundred for glasses, driving school and money owed to parents and brother.

So, the grand idea is to start running a balance on credit to get one pair of glasses for now for driving, charge driving school and other bills like groceries to free up some cash. Get my license, visit both former colleges for career help/jobs, rent a car for interviews, land second job with more money if not same pay, return rental car, get a used car I maybe border line of affording used. Work both jobs and pay off debt.

I would work my flexible job now part time and second one what ever shift it is, so working 12 hours a day, 11+ bucks an hour. Pay back parents, brother, credit card, get other needed glasses, pay off car.

What do ya think? Worse to worse I return the car, its repoed, right? Its not like i plan on owning a home or reallly loose any sleep at night worrying about my credit.

Avoid debt whenever possible. Get a second job now, if need be, and save up to pay cash for driving school, a car, etc.

Quit smoking, too. But, you knew that already.

Stay out of 'bad debt' and pay yourself first.

Bad Debt is a loan on a depreciating asset, like a car or keeping a balance on a credit card for something like some toys, flashlights, dinners out etc.

Good debt is a loan on an appreciating asset like certain real estate or appreciating investment leverage etc.

Paying yourself first means you get your check and every single time you take 10% off the top and put it in an investment. CD, Money Market Acct. Savings, Mutual Funds, Gold Coins, whatever... Just save and diversify your porfolio (however small it is) with a broad base of investments and leveraging startegies. (I remember starting this and it was tiny but it has grown a lot) COmpound interest can surprise you. Just, develop a plan over time. And take your time, there's no rush.

I recommend a basic Canadian book called 'The Wealthy Barber" for basic introduction to this mindset. Also that lady on TV is good if you can stand to listen to her for more than 2 minutes. LOL

You dont really find better jobs. You get better and they find you. So always learn a new skill. Read as much as you can stand or retain. Being well read is got to be the cheapest form of education.

Basics,

Good Luck

Tony

sounds like a really bad idea!

too complicated and too many things to go wrong. simple is good.

debt is not always bad. debt without a plan is bad. It's almost always better to pay cash for a vehicle. vehicles are a debt trap best avoided. try to live by the rule, if you cannot pay cash for a vehicle, don't buy it.

save your cashflow to pay for a mortage payment. No way you should think that it's not possible to own your own home. on the contrary, you should not be satisfied until that happens.

much better to save and purchase a low milage older car that would still be reliable. don't know about pricing where you are at, but local you can find a decent vehicle for less than $1,000. and I'm not taking about a roach trap. those you avoid. loads of full size 4 door vehicles that gets 20-22 mpg priced $750+

Glasses are essential. I interchange between only two: one as a "beater" for sweaty work and play and one for "dress" occassions like when I'm meeting with formal folks.

Pardon me for saying so but I believe YOU strike me as thinking, if not mature individual who probably knows what to do already (but as with any normal invidual, just needs some degree of assurance or gentle prodding). It's just a simple-but-often-unpleasant matter of properly managing/prioritizing your needs and accounts.

Yep, you may be stuck in a rut as of this time but take heart for "this too shall pass". Good luck!

I'm hardly one to give living advice, but these guys are right. Unless it's a total emergency (like stuck in a Mexican prison or about to start living in a Fridgidaire box) don't use credit you don't have the cash for. My view is that it's a convenience in addition to cash, not a replacement for it.

Lose the smokes the sat radio for starters. Work on better food just as a principal.

Maybe hit the library and check out Dave Ramsey's "Financial Peace" or "Total Money Makeover". Its just common sense financial personal planning, based on getting out of debt and making good use of your income. Highly recommended.
www.daveramsey.com .



best regards

Can't you get your parents or a friend to take you somewhere and teach you how to drive? It's not that hard.

"Worse to worse I return the car, its repoed, right? Its not like i plan on owning a home or reallly loose any sleep at night worrying about my credit."

I agree with the other posts, however I am very concerned about this statement. Ever heard "don't burn your bridges"? Your credit rating has more devastating results than you are understanding. Bad credit raises the interest on EVERYTHING you borrow (making it more difficult to get out of debt). Bad credit raises your car insurance rate (making it more difficult to get out of debt). Bad credit can even get you disqualified for a job (making it more difficult to get out of debt).

Your credit is as preciouse as your reputation. In fact, for a lot of things that happen in your life, your credit IS your reputation. If you don't repay your debt, you are immediatly judged as unreliable and untrustworthy. You don't want to lose either of those.

Take it from someone who has been there and spent 15 years rebuilding a poor credit rating. There a NOT MANY worse things that can happen to you than losing your credit rating. Don't take this lightly.

Sorry if I sound like I'm lecturing.

You might start by reevaluating whether or not you really need to buy a car. Based on your other thread, something like an electric scooter might meet your needs and be much cheaper to buy and operate. Don't forget that even if you get a car really cheap, insurance is an ongoing expense. At least with a scooter or even a motorcycle you don't have insurance. A bike would be an even better option but you had said for various reasons it was out.

Now as far as your other expenses, the only things it seems you can potentially reduce are food and cigarettes. Ideally, assuming you could give up smoking that frees $25 a month. As for lunch, if you're really serious about saving money have a pack of Ramen soup for lunch each day the way I used to. You can usually get them for $0.10 each so your monthly lunch bill comes to $3. Between lunch and cigarettes, you could potentially save about $100 a month. I also remember walking the 3 miles each way to and from the subway instead of taking the bus before they eliminated 2-fare zones. That saved me $2.50 a day, or over $50 a month. Between doing that and not buying lunch out at $4 a day or so I saved well over $125 in an average month, or $1500 a year.

All that being said, I agree with the others that going into debt really isn't a good idea, especially for something for which the need is questionable. A car might be nice, but look at it another way. If you have $300 left over now, and can potentially save another $100, then maybe it might be a better idea to put that $400 a month into an IRA. As for transporation, look into an electric scooter for $500 or so. In about 6 months it will have paid for itself in saved bus fare. After than you'll be saving an additional $90 a month, so you can either add that to your IRA fund, or go back to roach coach food, and still put $400 a month into an IRA. As convenient as cars may be sometimes, IMO they're no way worth even close to what we pay for them. I don't like purchases which require ongoing monthly expenses like insurance, or potentially huge repair bills. At least an electric scooter will be easy and cheap to fix, and it probably will hardly break down.

All good advice, but packaged ramen for lunch? If I tried to live off that stuff for more than a week I'd be knawing on leather for nutrition.

+ 1 on what everyone is saying here.

Don't rent anything, or buy things like your glasses or eye exams on credit.

Save that $300, or more if you can go to packing a lunch, and quit the ciggys, and you'll have enough saved up by summer.

Stuff you buy on a credit card, even with "low" rates like 9% can actualy cost anywhere from three to ten times as much as the actual purchase price, if you can't pay off the card quickly.

Cars are a money pit, even if nothing goes wrong with them. Gas, oil, tires, tune-ups are all "hidden" costs that people excited about a car don't think of.

Insurance will be a killer, and might even actually cost MORE than the car payment for a younger, unmarried male in a "dangerous" zip-code, and it will be mandatory or your car loan will get cancelled.

If you are 100% sure a car can get you a better job, (And create free time in you life wasted waiting for busses, and eliminate the misery of waiting in bad weather, hard to put a price on that) I'd go for it.

So after you've saved up for glasses and drivng lessons, you need to go car shopping. Do on-line research, there's lots of articles on how to shop for cars and not get ripped off, and how to pick a good USED car. Someone in your financial situation has NO BUSINESS buying or leasing new. Even married people with two middle-class "white collar" incomes shouldn't buy new. It's a horrible waste of money. You're paying nearly double 200% more for that 5% of "newness" on the lot, when a 2-3 year old car that's in good shape, say 90% as good as new can cost half as much.

Buying new doesn't even make sense for "rich people". Don't even set foot on a new car lot. The car dealerships have very slick ways of suckering you in. They like to focus on giving you a low monthly payment that makes it look like you can "afford" the car, but one that takes FOREVER to pay off, and actualy costs more in the long run.

If you have a hard time looking through the used-car ads, and local listings, I'd recomend finding out if you have a "Credit Union Fleet" in your area. (It might be called something else.) If you can't find one for your town on the Internet or phone book, call a Credit Union and ask. A CU Fleet is a kind of dealership that sells the used cars turned in from Credit Union leases, and then turns around and does all the financing through the area's credit unions that work with them

Since they exist to dispose of the Credit Union's used cars from finished leases, and funnel new car loan business back into the Credit Unions, they're not so interested in screwing you on the price of the cars, and the cars are in good shape because lease cars tend to be lower mileage because of the milage penalty limits on them, lease cars are under warranty during the lease, and the lease car has to be in good repair when it's turned in, or the previous "owner" is billed to repair it. Most used cars coming off a lease are also mostly between 2-5 years old, with most of them being around 3 years old, and have only about 30-40,000 miles on them.

The Credit Union financing is also a good way to go. Since they're non-profit, unlike banks, savings & loans, or worse, finance companies, they gerneraly have lower rates, and easier terms of acceptance. The CU Fleet dealer will submit your loan app to all the Credit Unions in the area, and give you the best one.

ABTOMAT said:

All good advice, but packaged ramen for lunch? If I tried to live off that stuff for more than a week I'd be knawing on leather for nutrition.

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It's better than the food I had when I was in college. I actually lost 20 pounds the first semester because the food was so disgusting. I admit not having Ramen soup every single day when I used to work. On days when I worked overtime, I treated myself to a BLT since I figured I was still ahead of the game. Another alternative is bagging lunch. Still way cheaper than $3.50 a day. We all know $90 a month for lunch probably isn't a lot of money to most folks, but when you're making a low salary you need to cut corners every way possible. I can definitely relate to cobb's situation having had jobs where I was paid as little as $3 an hour, albeit almost 20 years ago. Even carfare hurts.

No one supports spending money to make money?

My glases are $1200 from the dr office eye glass place. Going to shop around. $138 for the frames. Frames are 20 more than they were at walmarts eye center. Just plain old polycarbinate lenses and frames. No special opticals for driving.

I should be able ot buy these in full by this time next year, but I will be debt free. By then my prescription may of changed.

Then according to the dmv website I need to attend driving school. No idea how much that will cost.

After that, either buy a scooter or used car. Looking for cheap source of cars.

Am listener of Dave Ramsey, for the most part I agree with him, but I have yet to hear of someone in my shoes who severly limited with the bus service during weekdays and working hours. I live on the edge of the city in the second highest crime rate area. Nothing but run down apartments, abandoned boarded up businesses and a high school within walking distances. 6 miles away the Richmond Race Track. Otherwise not much out there.

Sure a 2000 dollar honda will still be worth 2000 dollars a few years from now, but could i depend on it for a few months to drive 200 miles a day? A 8 thousand dollar kia will depreciate after rolling it off the lot new, but not as much as a car that cost 16 or 24 grand. At least with the new one I wouldnt fear driving to Ft Lee, Alexandria or Langley for a job til I can move.

Keep it coming, just wondering how you guys think or would handle this. You really think waiting til I pay off my brother, folks, diet, quit smoking for the next year to get debt free again and buy my glasses is the right thing to do? Keep in mind too I live 11 miles from work, but it takes 1 1/2 hours each way on the bus through some poor neighborhoods.

cobb said:

No one supports spending money to make money?

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Cobb,

Spending money to make money is not in and of itself a bad idea. In many cases it's necessary. BORROWING money to make money is a bad idea. I work in the financial industry and counsel people every day who have trashed their credit. Some folks never had a chance. No idea what they were doing and blew it. The rest had good intentions and a "plan" but unfortunately not the direction they needed.

As others have mentioned your credit is more than whether or not you can get another credit card or a mortgage further down the line. More and more companies are running credit to see if they will even hire you. To many companies someone that has failed to take responsibility for even their own finances (something most people consider a priority) can't be trusted to take responsibility for anything. This doesn't even begin to take into account things like insurance rates.

When I was younger I managed to do a number on my credit. It took years to get myself back "on the grid" but until I did life was more complicated. I had a 250 point swing in my credit score (that's E credit to A+). That took the better part of 3 years.

-F

Samoan said:

BORROWING money to make money is a bad idea.

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that's not always true...
SBA loans have financed many a small business.

one of the current economic trends is to encourage micro loans in third world countries.
so what does this have to do with this thread? duh...

there's been many a thread spend on how to raise cash.
those ideas are still valid.

what if you had a "raise cash for eyeglass fund drive"? by selling items that everyone needs, but no one wants in large qualtities, like teflon wire for modding or glow powder that needs to be split up. folks are alway looking for nyogel 959. get a large bucket and split up into small dabs.

spend $200 and sell for $1,000. folks don't mind a markup on items needed in tiny quantities.

folks love folks that help themselves
only catch to all this is handling/shipping.

Of course, you can always drop the sat radio as well.

The need for a car varies, but my experience is that driving a car costs about $ 4 - 500 / month. (plus gas and insurance). You are either paying the $s in repairs, or payments, but either way, you are paying it, on average.

The eye glasses seem a bit expensive for your budget, but at least you have a budget, which is better than most.

HarryN, drop sat radio? Thats 13 bucks a month. I almost think I rather quit smoking.

Samoan, yeah, I know what you mean. I hear some of the folks who call into Dave Ramsey. They have a large nice house, two nice new cars, 24 grand in worthless stocks, another 40 grand in credit card debt and mortgage on a second house they want to setup as a rental and need advice on buying a new truck and some lawn mowers to cut grass to pay their interest payments. Thats a no brainer what to do there, sell both houses, move to an apartment, sell both new cars, get an older one used and a used truck for grass cutting or better yet a second job with UPS or a pizza company.

To tell you the truth Samoan, I was much happier living on disability with 8 grand on two credit cards than I have been off of it, working full time and debt free. I always knew I could pay it back later, I will always have money next month.

cy, during the dot com boom many "businesses" used credit cards as a source of funding. I dont know if any made it, but no way in hell I would think of starting a business with credit cards.

I will give your idea a try. My parents have offered to help with some previous ideas to make money from home to help with shipping, getting items to the post office and minor holding of inventory. Once reason I havent done any was again, going into debt to buy the items. Hate to have a few hundred feet or wire or tub of glow powder with nothing to do with it, at least planned. Maybe cool to paint the walls with the glow paint. Likely not a good idea to do that to an apartment.

I think this situation has just proved to me that making 16 grand a year wont cut it. Working 8 hours using a bus service that runs 12 hours during the week and only in 1 city (Richmond) and 1 county (Henrico) makes it nearly impossible to hunt for a better paying job. With a car I would hit Colonial Heights, Hanover, Chester, Chesterfield, Petersburgs, Ashland, Hopewell, Shortpump, Princegeorge, Doswell, and many other areas within an hours driving distance. If I moved home and paid my parents rent, that opens up, Surry, Suffolk, Windsor, Waverly, Smithfield, Newport News, WIlliamsburg, Newbohemia, Va Beach, and other areas I cant recall of hand.

cobb said:

My glases are $1200 from the dr office eye glass place. Going to shop around. $138 for the frames. Frames are 20 more than they were at walmarts eye center. Just plain old polycarbinate lenses and frames. No special opticals for driving.

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$1200 for glasses? Do you have a special problem with your eyes requiring super-expensive glasses, or is that for multiple pairs with fancy features? Around here you can get an eye exam and a basic pair of glasses for under $200. I went more than a decade with only one pair of glasses at a time, and usually those were a relatively cheap pair that lasted for 6-8 years at a time. Since money is a concern, why spend so much on eyeglasses?

-Keith

hey cobb, why do you need any finacing at all?

cpf'er routinely finance projects 1+ years out, involving thousands of dollars. why should you be any different?

if you put out a feeler for say nyogel 959 in small quantites for say $8 shipped. I'll be the first in line! keep packaging, shipping and product cost to say $2.50

a tiny bit 959 will last most of us next to forever. but no one wants the hassles of buying a huge quantity. this is a win/win situation. if you are not afraid of a little work.

I'll even send out the money in adance.

I remember reading back posts that you are almost legally blind and that's why your glases cost so much. don't you think that cpf'er will rally to a good cause?

what does it cost you to post a feeler to find out how many folks will climb on?