This is a tough one, indeed. Here’s the email I got from a fellow reader of BudgetsAreSexy. Take a gander, and then leave your thoughts/advice below? Thanks!
I’m a real pickle, and my Google skills do not have me any closer to solving it. :)
I made a really awful decision. At 21 I walked into the Ford dealership and signed $18k of my life away for a Ford Fusion. I paid far too much for it, the Carfax has a ding on it, and I can’t afford it. It took me quite a while to realize it though! (Also, my grandparents co-signed for it.) I can make a million excuses, but what I have the most of is REGRET.
Now, I know– kick myself in the rear and never make that mistake again. But that doesn’t help this 2 ton anchor weighing me down!
Right now (23) I pay $346 per month on said vehicle, and I pay $200 in insurance every month (damn you Michigan and your high auto insurance rates!). J, let’s be real here — I’m still in college and I make about $25k/year. I can’t afford this in any way/shape/form.
What is worse is I can’t find a way out and I’m starting to feel mighty desperate. I don’t even have much credit, and my debt to income ratio is so high I can’t get approved for a card or loan independently. I by no means have the resources to come up with even a few thousand dollars cash– right now I’m very much paycheck to paycheck and my savings account is at $10. There isn’t anyone who can lend me any money. I also was unemployed for six months last year and have an eviction on my credit report.
Is there any way out there to get a little breathing room? I’ve thought about trading my Fusion in for a car worth 5k or so– but from what I can tell, most dealers won’t allow you to trade in a car for less than the one you want to buy.
I’m trying to desperately hard to be financially responsible! But between the high car payments and the rest of life, I can barely keep up much less get ahead. This car payment is the amount of RENT in my area, and I’m crashing with my grandparents 35 miles away from work and driving in every day because I simply can’t afford to even rent a room.
I apologize for the sob story, but if you get a moment to think on this and have any suggestions, I would greatly appreciate it!
OUCH. The first thing that came to my mind was to advise her on getting ANOTHER job. I don’t care what it is, but *anything* will help to reduce this massive amount of debt and stress (or even yet, get a *better* job). It’s obviously not optimal as a student who already has some sort of a gig going on, but luckily we’re given 24 hours in a day to max out as much as we need to, come hell or high water. And since she didn’t mention it specifically one way or the other, maybe there’s room here to get some more income going? (Check out some of our side hustles for good ideas)
The other option she touched on was possibly trading in her car, but I think she’s right in that you usually can’t do so for a much lower valued vehicle. Though you could always sell it and take the loss, then try and get another one right after? At a much smaller cost? It wouldn’t be easy of course, but it’s definitely doable.
Those are the best 2 options I see – what about you? Have you ever been in this predicament before? What would YOU do if you were here? (I know it’s hard without having all the facts and/or knowing anything about the reader whatsoever, haha, but do your best ;)). At the very least she’ll have more to think on, and hopefully get pumped up enough to get out there and make it happen!
Thanks guys, you’re awesome :)
(Awesome license plate captured by Gamma Man)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!