Hi, so I am 22 years old and I was dumb and I’ve racked up a bit of debt over the last few years and I ended up putting myself in a hole. Currently $4,567 in credit card debt. Now is the time where I need a car because I want to start college and I’d be commuting an hour away… I almost fell for the drivetime scam but they tried to have me pay $389 every week at 25% interest… no thanks. I ended up just going to toyota and the car payment is about 580-595 per month plus car insurance that I have to pay by myself while working 6 days out of the week at only $14.21 an hour. That car payment would be fine for me if I didn’t have all this debt to pay off, luckily I live with family and don’t pay any rent but I do have a phone bill that is $112 every month and of course my credit card bills plus my insurance that I’m assuming would be high because my low credit score. My mom was my co-signer but she doesn’t have the best credit either so it only got me so far, and I have 29 days to make a decision before the approval goes away. I need a car and I’m stuck on what to do. My checks are anywhere from $700-800 but I maybe can work a bit more hours to make more. I know it’d only be coming out once a month but I get paid biweekly and realistically I’d only have that second check of the month for my bills. Not sure how to budget or what to do. I also don’t even know what I’d do with how expensive gas is getting. Any tips would be appreciated. Thank you.
Got myself in a hole
byu/YogurtclosetWise8371 inpersonalfinance
Posted by YogurtclosetWise8371
8 Comments
In your current situation, compared to buying a car. It’s better for you to rent a car
What kind of car did you get the approval for? That is way too high of a monthly payment for you. At your age and with your financial situation you should be looking for the cheapest car you can get.
> and the car payment is about 580-595 per month
Focusing on the monthly payment is LITERALLY how they get you. What is the actual out the door price of this car, what is the interest rate that you were offered, and what is the length of the loan? Those are the important things.
> plus my insurance that I’m assuming would be high
You don’t want to “think,” you want to “know.” You should check to see how much your insurance will be PRIOR to this purchase. And remember that since you’re planning on financing the car, you will need Comprehensive and Collision insurance on it. Find that out today.
Either way, I don’t think that you’re in a position to be financing a car right now.
How much debt do you actually have, and what are the interest rates on that debt?
You need more income.
And it’s probably wise to clean this mess up first, and then start college.
Check out the money Guy Car buying calculator.
[Car Affordability Calculator (20/3/8 Rule) | Tools | Money Guy](https://moneyguy.com/tool/how-much-car-can-you-afford/)
How much is your credit card debt? (of that, what are your monthly interest payments)
For school, will you be making monthly payments for it?
rough guestimate you work around 30 hours a week, perhaps take a year to work more and build up some savings and your credit score? (perhaps some online classes for the 1st semester)
with cost of gas and car payment it would be cheaper to rent a room near the college. It’s not glamorous but the time saved will be immense. I previously lived with a 65 year old man for 1.5 years before I graduated. He hoarded books but it was quiet and a good neighbourhood under 10min from campus by bus.
Bail asap. Don’t put your mother on any debt. Save a couple checks and buy a beater. Or see if anyone in your family is going to upgrade their vehicle and ask to buy from them.