While we're talkin about schooling and such

[Shaolin]

I was talkin to a buddy yesterday about work and stuff.. He's an Econ major.. I wouldn't say he defended his degree, but whatever, that's not the point of my question. He's a good friend, one of the boys, so we see him quite often.. Anyways, we got to talkin about money because we worked out his monthly budget just recently, and after all the expenses paid, the guy has maybe 100 dollars to his name each month.

Here's what he pays for.
Student Loan - 11k to go
Car Loan 12k to go (398 a month)
Insurance approx 200/month
Misc Expense 98 dollars (I don't remember what it was)
Kid - roughly 300-400 a month
Social stuff (comin out for beers, etc) - 100 a month

He drives a 02 Spec V with 77,000 clicks on it.

I was trying to think of ways to help to get more disposable income without selling himself.. selling the car was one option, we've already decreased his spending to a less than reasonable amount.

As most of you can see, most of his income goes to expenses that are "relatively" fixed.. so what do you think would help him out? What he really needs is get out of retail and put the degree to good use, but we have a 600 page thread for that discussion so it doesn't need to be discussed here.

Any of you guys have some ideas?

[finboy]

sell the kid

seriously though, i would say sell the car and by a reliable older car that won't cost hime 400 a month, maybe an eg civic

[QuasarCav]

Balance, getting rid of going out lowers your quality of life. Having no cash lowers your quality of life.

I'd say finding better employment or selling the nice car and driving something that wont cost 400+ a month just to drive.

[Z_Fan]

Dear Shaolin's Buddy:

I have an idea. Dedication. Sacrifice. Risk.

You will be able to do all that you currently do, free up more income each month, and be out of debt in half the time. You won't require a bigger income. Whoa, how fantastic!

Bite the bullet. Sell the car. Buy a $1000-$3000 POS car that runs. Put any extra capital towards the school debt. Put 75% of what would have gone monthly to the Spec-V to the school loans. The other 25% to your pocket. And suck it up until you're out of debt. It's a hard road, but some times short term pain = long term gain. This will take dedication.

You should also be thinking of a cheap car like say, an 1990 Chevy Sprint or Pontiac Firefly. Good on gas, but cheap enough you don't need to carry collision. This is your personal sacrifice.

You will also save some money on insurance. Which all goes to school loans. Never carry collision on this kind of vehicle. This is your risk. Probably will save you $1200/yr. (Or more). PLPD protects you, the car isn't important.

That will easily double his current disposable income, provide him with transportation, reduce his monthly gas bill, remove his car payment, reduce his insurance payment (by half I'd guess) and likely cut in half duration which he must carry his debt. So he is of course saving a lot in interest from the car loan etc.

[Johnny C]

It's already been mentioned, the obvious answer here is for your friend to sell the car. Actually I'd be interested in buying it!! So sell me the car and get rid of that car loan.

[Shaolin]

the car needs about 2k of work to it (from what he says), it's comestic damage though, not anything under the hood..

but I'll talk to him tonight, see what he thinks about selling his car and getting an older ride. He's always telling me "something will come up something will come up" in regards to finding work with his econ degree but me and the guys aren't as optimistic.

anyways, thanx for the help. how much do you think he can sell the car for? I saw an 03 Spec V recently sold for 15, looked like it was in really good condition.. I'm thinkin maybe 12k with the cosmetic damage?

[hjr]

he has his degree? if so i would sudgest he look into the option of working for the government. they are in a recruiting crazy right now cause the baby boomers will be retiring soon. other than that, a bacholors degree is only what you make it. it wont get you a job, but not having one might loose you a job. he needs to get off his posterior and FIND a job. having an econ degree wont GET him a job.

also, this guys spends as much on his car as he does on his kid, does that seem a bit off to you?

[max_boost]

Ouch!!! Is your buddy married? No dual income? That's living on the edge, pay cheque to pay cheque. Since the expenses are fixed, my only real suggestion would be to get a part time job. It doesn't sound feasible since he probably wants to spend time with his kid.

Z_Fan pretty much summed it up.

Does your buddy live on his own? That's quite the situation. And that's another reason why I tell people to stay at home, save up money, make sure you carry zero debt before you decide to move out, have kids etc.

[max_boost]

Oh yah, how much does he make? Did school not pay off for him? Not rubbing it in, just curious......

[B17a]

Well the simple solution if his expenses are skinned as low as they can go is to increase revenue (income). Easier said then done but perhaps instead of trying to extract every last penny in savings, he could put his efforts into finding a better paying job.

[Weapon_R]

Do you honestly see nothing wrong with his spending habits?

He has an 11,000 loan, and decides to go out and buy a $12,000 car? I'm no math major, but it would have made a lot more sense to pay off the loan, beat around with a 1990 civic or something for a year, and then get into another large investment. His insurance gets cut in half, and gas and maintenance are cheap.

Kids suck, that's why you don't have them early! Nothing you can change about that though.

[Shaolin]

Originally posted by hjr
he has his degree? if so i would sudgest he look into the option of working for the government. they are in a recruiting crazy right now cause the baby boomers will be retiring soon. other than that, a bacholors degree is only what you make it. it wont get you a job, but not having one might loose you a job. he needs to get off his posterior and FIND a job. having an econ degree wont GET him a job.

also, this guys spends as much on his car as he does on his kid, does that seem a bit off to you?

him and his ex girlfriend sort of mutually agreed on how much he'd contribute for Liam, so yeah it is off, but it's what they agreed upon.. pretty obvious that he didn't know how to budget or save money eh?

[Shaolin]

Originally posted by max_boost
Ouch!!! Is your buddy married? No dual income? That's living on the edge, pay cheque to pay cheque. Since the expenses are fixed, my only real suggestion would be to get a part time job. It doesn't sound feasible since he probably wants to spend time with his kid.

Z_Fan pretty much summed it up.

Does your buddy live on his own? That's quite the situation. And that's another reason why I tell people to stay at home, save up money, make sure you carry zero debt before you decide to move out, have kids etc.

nope, he lives at home right now.. no dual income (obviously), he's been doing that for about 3 years now (ever since he got the car brand new). He's actually doing cribbing work on the side as well, but i don't know how long that's going to last. He was telling me how he wants to move out next year.. i have no idea how that's going to work.

[Shaolin]

Originally posted by max_boost
Oh yah, how much does he make? Did school not pay off for him? Not rubbing it in, just curious......

haha, yeah obviously school's not paying off for him.. he graduated in June.

he makes an hourly wage at a retail chain.. lets just say he makes under 25k a year.. I won't go into specifics

[Shaolin]

Originally posted by Weapon_R
Do you honestly see nothing wrong with his spending habits?

He has an 11,000 loan, and decides to go out and buy a $12,000 car? I'm no math major, but it would have made a lot more sense to pay off the loan, beat around with a 1990 civic or something for a year, and then get into another large investment. His insurance gets cut in half, and gas and maintenance are cheap.

Kids suck, that's why you don't have them early! Nothing you can change about that though.

yeah i know.. when he told me he bought the Spec V back in 2002 I was all excited because I got to drive it.. but to this day we still remind him on why he bought a brand new car.. he knows it wasn't a good idea now (3 years later pretty much).

the only investment he's doing right now is contributing a minimal amount to RRSPs that he just started recently.

I agree about the kid thing.. it was an accident, but he's a responsible father so I'll give him that.. I don't think i'm ever going to have kids.

[Street_Soldier]

For an econ major hes not very economic if you ask me.

1. Sell his car
2. Apply for a job anywhere (maybe in sales)
3. Join the army (get rid of that loan and make alot of money, i think its 40 g's a year to start for people with degrees)

just some suggestions

[Shaolin]

he's going to see what happens by next year.. if he can't find a job with the econ degree he's going to sell the car.. he's an econ major because he couldn't get into mgmt..

[max_boost]

Originally posted by Shaolin
he's an econ major because he couldn't get into mgmt..

What a surprise! haha j/k

[Shaolin]

haha i'm with you on that one max he defended his degree when he changed.. yeah well umm.. need I say more.

[gabbo]

There is nothing wrong with an economics degree. Taking it cause he could not get into Management could be hard to defend though. I have friends with econ degrees and they do fine. Just depends on how you use it. Where is he applying for jobs? A good place is to try and apply for government jobs. Some will not pay much more to start but it is not retail with more opportunities to move up. Otherwise try applying at banks. Some will be willing to hire you but you must be willing to study more for certification to go do stuff like sell mortgages and stuff.