Financial Advice *poll*

PittSpeed Automotive PittSpeed Off Topic
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Ok, heres the deal, I will be moderating this thread Nazi style so please keep it on topic

I am 23 now, 24 in April, and i think its time to grow up, get a house, and get married :gulp:

Recently i have had a few family members pass away leaving my grandparents a decent amount of money. In return they are giving the grandkids ( me, my sister and 2 cousins) a check for $10,000 each.

Now i have a good job in my field which i love, ive had a girlfriend for the last 5 years, i bought a car MYSELF and put it in my name, including insurance, and have a credit card bill of around $2,000.

Now here is what I have line up for the money…

A.) I was thinking just throw the whole $10,000 into a savings account for a downpayment on a house. collect the interest and use it when the time comes.

B.) Pay the remaining $7,000 off on my car and the $2,000 off my credit card, which would leave me around $1,000 to put down on a ring. and then i could start saving again for a house.

C.) Pay off credit card and buy ring leaving around $5,000 as a building block for a downpayment?

the only problem i see with splitting the whole thing up to pay bills is the fact that i can make payments on what i owe right now. you can save for a downpayment on a house, but you cant make payments, which makes me think dumping the $10,000 into a downpayment may be the right idea and pay my bills off monthly like i have been.

2

D.) Give that shit to Victorsmalls

3

not the type of on-topic reply i was looking for

4

There are other options, but not worth posting because you will just delete them.
Pay off debts should be first priority…
Use your head. Make sure you’re doing whats best for YOU.
just my two cents.

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yeah i know. paying off debts are and should be a #1 priority, but having a large chunk to put aside for a downpayment that interest could grow on would be a nice building block and let me pay off what i need to in the time frame im allowed… im not sure yet. i have a lot of figuring to do

6

dude you’re in the same boat i was. payoff CCs first, buy ring second, the old days of needing a huge downpayment for homes is over so $5000 would be enough for an decent first house. :bigok: with the fed rate rising short term rates (car loans, ccards, personal loans) are going to keep rising. in short you’ll lose more money owing over the next few years than you could make by investing… unless you get lucky.

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I’m the same age you are and let me tell you… if i could get out of debt today i would. 10000 wouldn’t even get me started. get out of debt. you’re paying intrest for no reason. w/ a house payment at least you’re paying towards an investment, whereas credit cards and car payments are just adding on to themselves. Don’t be a retard like me. do yourself a favor

8

I was pretty much in the same boat a couple of months ago. Im 22, and wanted to buy a house since I had just graduated college… I talked to a couple of financial advisor friends, and heres what I would do…

Pay off the outstanding debt on the credit card first, thats for sure. They variable interest rates on those will kill you, usually somewhere between 9 and 18% and thats if you NEVER miss a payment.

Next is just opinion, but I would pay off the car… The car is a liquid asset, meaning basically that you can turn it into cash money in your hand if you absoltuely HAVE to.

A house is an easy purchase for someone your age (or my age) b/c you will have it paid off by the time you are in your 40’s, which is beautiful, and mortgage rates are at some of the lowest rates they have been in nearly a quarter century… Plus, the default rate on mortgage loans is rediculously small, like 1 to 2%.

My suggestion would be pay off the credit card first, then pay off the car, then get the ring, and start saving for the house… Remember, you can save for the house once you already have it too if you’d like to just pay it off before its time to do so.

Oh, and save 20 or 30 bucks and buy Bailey something nice too :smiley:

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AT 23 I was married and had a kid. I was also reenlisting in the Army to help finance my family. If I had the opportunity, I would invest in my future.

Pay yourself first should be the number one rule. SEt some aside and pay everything off with the rest.

AFTER you pay stuff off, continue to pay yourself first each and every paycheck. Don’t live beyond your means, make smart decisions with your money and you will be just fine.

A piece of property will be an investment as long as you choose wisely. At the very least you will always have a roof over your head. It might not be the best place to raise a family, but if you stay single, it is a great investment. Pay it off quickly and then rent it out.

I have not done any of those things, and have paid a very heavy price. In fact I am still paying as we speak. I will continue to pay for a very long time.

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Im just scared that if i use it to delete my current debts, i may just end up creating more without needing to allocate money to bills every month

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LOL, Sorry I cound resist. I would go with the down payment idea and just set a goal of having everything paid off before you get into a house. That way you will be building interest while you are working towards your goal.

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Pay off the CC first and foremost. Then pay it off each month if you continue to use it. Pay off the car. Buy the ring. Open a savings acct and deposit the left over and the $ that you would have paid on the car into the savings acct. You can obviously afford the payment, avoid spending it and save it. Don’t get a card to w/d money from the account, make it so that you have to physically go down and fill out w/d slip to get at it, make it harder for you to get to it. If you feel you spend money unwisely, keep a tab of what you spend in an spread sheet, seeing the wasted $ on bars and unnecessary shit, you will probably stop spending so much. Good luck. I admire you trying to get your shit together so young, I just paid off all my debt (one CC, 10,000+ and 5 others) that I started accumulating at the age of 23…took me over 10 years to pay it off. I shudder to think how much I paid “the man” in interest. :ugh:

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to clarify on the car money, deposit the amount of your monthly payment into the account, monthly, just like you were still paying on it. :smiley:

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pay off debt, pay off car. pay everything. save for a few years, live at rents house. this way you can put say 20 to 30k down. this gives you a better start at paying off the house sooner or allowing a more expensive house. also while saving for the house you can save and buy a ring when time is needed. also since youre thinking this step have Lori put money away also. the minute i pay off my bills. truck,bike,school and CC. then savings for house start. once i get a good bit saved up im selling this house and using it and the saved money as my down payment. shooting for about 50 to 70k down. looking to buy in the next 3 yrs. i dont want stuck with no 30yr morgage so ill go for cheap now but i think it will work out nice in the long run. whatever you choose chad choose wisely. cause money will be gone sooner then you know it.

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Yeah I’m kinda in the same boat with payin stuff off. Just bought a house doing the whole settling down crap… Honestly with Mortgages today they have special programs for first time homebuyers (I’m assumeing you are)where if you put down 5% (which like someone said is around 5k) 3 % would go towards the actual house and the other 2% would be used for the closing costs. Which Let me tell you suck big time very expensive - That said I would definitely pay the credit card bills off first before even thinking about applying for a mortgage the more $ you have out the less you will get approved for and that means ALL DEBT cc’s, car loan, ect… If you can keep paying down your car payment on a monthly basis maybe throwin in an extra 100 a month on just the principle that will lower your total interest and get you out of that whole a little quicker. With 7 k left I would set aside the 5k for the house downpayment. Mind you if you are going to move on a house fairly quickly you need to have that money sitting in your account for no less than 30 days before closing and at the time you apply for a mortgage. with the extra 2k - throw 1k into a savings or a cd so you can start building a “nest egg”. Lock that money up for 3,6 or 12 months at least you know that 1k is earning you intrests makin you more $ which you can spend later. You can buy a VERY nice ring for 1k for your chickie. Honestly it shouldn’t be about how much you spend on a ring so much as what it means. A way to get a nice quality diamond don’t go to the mall to those jewlers They WILL screw you. Go to a diamond dealer they will spend time with you explaining the C’s - Color Cut Clarity ect. Get a good quality diamond and then take that to a jeweler to have it set. Alot cheaper and everything turns out very nicely

I hope all of that babble helps or at least points you in a direction you want to go. Good luck

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Kill the credit card bill without a doubt. Perhaps throw a little toward the amount still owed on the car. Throw like $4000-$6000 into a savings account and commit to putting something like $200-500 a month into the savings, whatever you can afford. Unless the interest rate on the car is through the roof I would not totally pay it off and still leave the decent chunk of change in your account in case of emergency’s or perhaps a some unforeseen investment opportunity. Cars can be sold rather quickly if necessary as mentioned, but usually not for as much as a seller who doesn’t need to sell.

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What are the interest rates on the CC and car loan?

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im not sure about the interest rate off the top of my head.

for the car…7400 was financed for 3 yrs and it came out to a $190/mo.

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drop the card, pay off car and get a ring with the 10k. you can get a 0% down mortgage if your credit is good enough. That is if you want to buy a house like right now.

Make sure you shop around for you house too. I looked at several before cherri and i bought ours. MAke sure you look beyond cosmetic. I would buy a big structurally sound house that needed some tcl before id by a pristine looking house with termites.

we moved into my rents house and saved about 5500 over the course of 2 months.
We put 3k down on the house and had another 2.5k to get us what we needed for the house plus make all our bills and have some left over.

Pay of current debts, save money while looking at houses, buy house.

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Chad,

Pay off the car, and CC, then get her a ring. With that debt gone it will be easy to save for the house. If you are a first time home buyer your best bet is to get a FHA loan. Closing costs are typically around 7200 dollars depending on how much the house is. With a FHA you can get sellers assit with the closing costs up to a certian percent (our sellers ended up paying 4500 of our costs.

Its not really cut and dry, but If you are interested I am going to PM you my step mother’s info. She works fro coldwell banker and will take care of you. Just let her know you know me. I’m PMing the info now.