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Old 09-12-2012, 06:35 AM   #41
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Do you wish that your mom or dad had just paid for it?
I knew better than to ask. Dad had passed away by then and Mom would have laughed at the idea.
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Old 09-12-2012, 07:49 AM   #42
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I did some investigating on the percentage of monthly income that "should" be devoted to transportation expenses (looking at several budgeting models on the internet). Including gas, car insurance, tolls and (optional) car payments as a whole, 10-15% of take home pay seems to be the consensus.
On a monthly income of $2000 my daughter should be spending no more than $300 for all of the above. I believe her insurance runs to $80 a month and gas is about $60-70 so basically she is in hot water even with a re-finance. There will be a fiscal lesson in tightening the belt no matter what!
I am curious if that 10-15% estimate seems reasonable to others on the forum?
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Old 09-12-2012, 07:59 AM   #43
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I think the 10-15% makes sense later in life when one is earning more and well established but at her age at entry level pay I would expect it would be more. I don't recall what my car payment was at that age but I do recall that my car was my most valuable asset.

That said, if your DW's insurance is $80, gas is $65 and car payment is $460 then the total is about 30% of her take home pay so it does seem quite high. A lesson learned no doubt.
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Old 09-12-2012, 08:32 AM   #44
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I knew better than to ask. Dad had passed away by then and Mom would have laughed at the idea.
Smart mom.
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Old 09-12-2012, 09:07 AM   #45
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Really tough crowd here, but I would have taken care of the car. We've never been helicopter parents but through a combination of steady parenting and good fortune, all kids have been all launched with no real financial ties to us. But there are several items that we have financed in launching them in the world: (1) an undergraduate education at public college rates, (2) a reasonably priced car after graduation to replace the beat-up, hand-me-down vehicle we lent them in high school that they eventually took to college and later drove to the ground, one or two years after college graduation, (3) and a wedding or downpayment on a home purchase.

In any event, I'm planning on living a good life in retirement. My kids are very responsible adults -- and I doubt they'll ever ask us for money to fund their lives or dreams, but I prefer to give them whatever they need while I'm living as opposed to simply leaving them a big estate when my wife and I are no longer around. They can mooch off of me for all the little things they want (which generally means picking up the tab at an expensive restuarant) though they insist on carrying their own frieght for the most part.
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Old 09-12-2012, 09:27 AM   #46
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Originally Posted by Rachel
I did some investigating on the percentage of monthly income that "should" be devoted to transportation expenses (looking at several budgeting models on the internet). Including gas, car insurance, tolls and (optional) car payments as a whole, 10-15% of take home pay seems to be the consensus.
On a monthly income of $2000 my daughter should be spending no more than $300 for all of the above. I believe her insurance runs to $80 a month and gas is about $60-70 so basically she is in hot water even with a re-finance. There will be a fiscal lesson in tightening the belt no matter what!
I am curious if that 10-15% estimate seems reasonable to others on the forum?
I had to learn the hard way too! I had to have a camaro back in the 80s out of college. My payment was about $215 a month, average in gas, insurance, and prop. tax i was up to close to $400 a month and my take home was around $950 a month. What was crazy was I was still able to save about $50-$100 a month. Cheap beer, cheap food, and cheap dates, cheap rent kept me financially above water.
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Old 09-12-2012, 09:39 AM   #47
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Really tough crowd here, but I would have taken care of the car. We've never been helicopter parents but through a combination of steady parenting and good fortune, all kids have been all launched with no real financial ties to us. But there are several items that we have financed in launching them in the world: (1) an undergraduate education at public college rates, (2) a reasonably priced car after graduation to replace the beat-up, hand-me-down vehicle we lent them in high school that they eventually took to college and later drove to the ground, one or two years after college graduation, (3) and a wedding or downpayment on a home purchase.

In any event, I'm planning on living a good life in retirement. My kids are very responsible adults -- and I doubt they'll ever ask us for money to fund their lives or dreams, but I prefer to give them whatever they need while I'm living as opposed to simply leaving them a big estate when my wife and I are no longer around. They can mooch off of me for all the little things they want (which generally means picking up the tab at an expensive restuarant) though they insist on carrying their own frieght for the most part.
I am more in your camp and that of PB4 vs the tough love majority. I think starting out in this day and age is much different than when I came out of school, and I have no problem providing a little boost for my kids, although neither one of them expect it or ask for it.
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Old 09-12-2012, 10:17 AM   #48
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I am more in your camp and that of PB4 vs the tough love majority. I think starting out in this day and age is much different than when I came out of school, and I have no problem providing a little boost for my kids, although neither one of them expect it or ask for it.
+1 (or is it +2?)
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Old 09-12-2012, 10:34 AM   #49
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I am more in your camp and that of PB4 vs the tough love majority. I think starting out in this day and age is much different than when I came out of school, and I have no problem providing a little boost for my kids, although neither one of them expect it or ask for it.

The reason why I am not in your camp (or the others who want to help out) is that the OP never mentioned that his DD has ASKED for any help...

The decision she made might be just great for her... she might not think she is struggling... her bills are being paid, she is eating, she has a roof over her head... where is the problem

Sure, he sees her struggling.... and still thinks of her as his little girl who he needs to help.... but she is a grown woman.... her decisions have consequences... she needs to LEARN that they do and not be taught that dear ol dad will bail me out at the first sign of trouble....

Most of us tought love folks have suggested that he give her advice... this, as they say, can be a teachable moment.... so what do you wish to teach, dad will bail me out of my stupid decisions or spending beyond your means can be tough I vote for #2....
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Old 09-12-2012, 11:50 AM   #50
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I agree with the sentiment below that she is an adult, don't enable her by trying to "fix" this for her. Be prepared for her to ask for help...that's when you'll have to give the tough love and say no....or as Dave Ramsey says...any help I give you will be tied to actions that I would approve of. For example, if she ends up with a $20,000 debt, tell her that you'll pay $400/month only if she gets a 2nd job and pays $800/month...showing she's serious about getting rid of it and that she's learned a lesson. Demand proof of her payments before you make yours. Do not co-sign any loan for her.

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I would avoid dictating actions. Drop the word "insist" from your vocabulary. She is an adult now and you should treat her like one. If you don't she will be looking to you for support for years to come.

If you think she would have the discipline to keep saving the difference in payments instead of blowing it, you could suggest that she refinance the car loan. Pen Fed offers sub 2% rates for as long as 5 year terms.
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I would just let her learn an expensive lesson.
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My thought would be to let her work through her decisions on her own. If something minor to moderate comes up, a little suffering on her part would probably be a good lesson learned. If something truly major comes up, or something less major and after a real effort she is in danger of sinking, then you can always step in. But if you step in right away, that sets a precedent, and as they say, you can't unring that bell.
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Old 09-12-2012, 02:44 PM   #51
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Well, to Texas Proud--she did ask for help, and I thought in a fairly mature way. The impetus for me toinitially post was that I just visited her for the first time since she moved to the small city where she got her job. I knew about her terrible car loan because she told me about it when she bought the car a year ago and I managed to keep my mouth shut until now. She recently expressed concern that learning to be financially independent is a lot tougher than she thought it would be, and asked me if I would be able to help her if she had a large unexpected bill. I was thinking she maybe meant help with day-to-day stuff but what she actually was worried about was an "explanation of benefits" she got after an emergency room visit that showed high charges (she has insurance and I explained the difference between an EOB and a bill). It turns out that she (on her own) already refinanced her car loan and got her payment down to $302 monthly!
So it still comes down to how to combine help vs enabling vs tough love, but the car is thankfully not the nightmare I thought it was. And, it is EXTREMELY helpful to hear how others have approached this quandry.
By the way, I am her mother, not her father!!
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Old 09-12-2012, 02:58 PM   #52
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The reason why I am not in your camp (or the others who want to help out) is that the OP never mentioned that his DD has ASKED for any help...

The decision she made might be just great for her... she might not think she is struggling... her bills are being paid, she is eating, she has a roof over her head... where is the problem

Sure, he sees her struggling.... and still thinks of her as his little girl who he needs to help.... but she is a grown woman.... her decisions have consequences... she needs to LEARN that they do and not be taught that dear ol dad will bail me out at the first sign of trouble....

Most of us tought love folks have suggested that he give her advice... this, as they say, can be a teachable moment.... so what do you wish to teach, dad will bail me out of my stupid decisions or spending beyond your means can be tough I vote for #2....
I do not understand why you feel it necessary to rejustify your position just because I offered a different opinion
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Old 09-12-2012, 03:47 PM   #53
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The reason why I am not in your camp (or the others who want to help out) is that the OP never mentioned that his DD has ASKED for any help...

The decision she made might be just great for her... she might not think she is struggling... her bills are being paid, she is eating, she has a roof over her head... where is the problem

Sure, he sees her struggling.... and still thinks of her as his little girl who he needs to help.... but she is a grown woman.... her decisions have consequences... she needs to LEARN that they do and not be taught that dear ol dad will bail me out at the first sign of trouble....

Most of us tought love folks have suggested that he give her advice... this, as they say, can be a teachable moment.... so what do you wish to teach, dad will bail me out of my stupid decisions or spending beyond your means can be tough I vote for #2....
Let's keep this in proper perspective: there's grown woman and grown-ass woman, and she's neither; she's a 23 year old college graduate and I presume she graduated within the last two years -- she's starting out in life and, according to the OP, she saved her family a boat load of college tuition expenses by obtaining scholarship assistance to finance her education. I think it is entirely unfair for us to judge her from the perspective of LBYM vintage lens with the benefit of well-worn financial experience; she might have blundered into purchasing this car -- a hard lesson she has learned. But I would have avoided this situation for her and myself altogether -- I would have contributed significantly to that car purchase, explained that it was a gift and there were no more gifts from us for her transportation, and taken that time and purchase as a "teachable moment." For me and my wife, we believe a transportation vehicle is essential to being launched as an adult in this society and we're happy to front some of this expense, just like a college education or a down payment on a first home -- if we parents can afford it and the child is responsible.

I don't see any "love" in withholding financial help in this situation; it's certainly "tough" as in "tough noogies." I don't see this as a "bail out" when I should have been on the hook for a sizeable piece of the purchase price anyway.
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Old 09-12-2012, 03:49 PM   #54
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Well, to Texas Proud--she did ask for help, and I thought in a fairly mature way. The impetus for me toinitially post was that I just visited her for the first time since she moved to the small city where she got her job. I knew about her terrible car loan because she told me about it when she bought the car a year ago and I managed to keep my mouth shut until now. She recently expressed concern that learning to be financially independent is a lot tougher than she thought it would be, and asked me if I would be able to help her if she had a large unexpected bill. I was thinking she maybe meant help with day-to-day stuff but what she actually was worried about was an "explanation of benefits" she got after an emergency room visit that showed high charges (she has insurance and I explained the difference between an EOB and a bill). It turns out that she (on her own) already refinanced her car loan and got her payment down to $302 monthly!
So it still comes down to how to combine help vs enabling vs tough love, but the car is thankfully not the nightmare I thought it was. And, it is EXTREMELY helpful to hear how others have approached this quandry.
By the way, I am her mother, not her father!!
Sorry, did not look at your name when I went back to see if she had asked for help in your first post....

I also agree that she did ask in a good way, and to me in a responsible way.... and also a way that I would be willing to help... an unexpected medical bill or some other big expense that she gets out of the blue that she could not finance, that could hurt her credit rating is not the same thing IMO.... (however, I am not sure if I would have just given it to her or loaned it.... we will see if it comes up)

It also show that she is better prepared than you might think is that she did the refi without you telling her.... good for her...
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Old 09-12-2012, 04:06 PM   #55
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I'm not sure refinancing was really the best thing. It's just going to cost her more in the long run. Although difficult, she should've just cut back on discretionary spending until the loan was paid off.
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Old 09-12-2012, 04:15 PM   #56
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So it still comes down to how to combine help vs enabling vs tough love, but the car is thankfully not the nightmare I thought it was. And, it is EXTREMELY helpful to hear how others have approached this quandry.
By the way, I am her mother, not her father!!
You're doing a great job, mom. She is learning the hard stuff now, and you're right there to advise as she asks for help.

My son is late twenties. I have been trying to get him to let me re-fi his student loans, which don't add up to much, but the rate rubs me the wrong way. Explained to him that I get no return on my money, and he could help me out. Why not pay 3% to me? He will not go for it. I have to laugh, that he has learned to take care of his own debts. He really is determined to not let us help him any more.
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Old 09-13-2012, 09:20 AM   #57
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........she saved her family a boat load of college tuition expenses by obtaining scholarship assistance to finance her education..........
I disagree. Parents don't owe their kids a college education, a fancy wedding, or a new car.

Of course, parents are free to give their kids as much money as they want. The sense of entitlement is what puts a burr under my saddle.
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Old 09-13-2012, 10:52 AM   #58
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I disagree. Parents don't owe their kids a college education, a fancy wedding, or a new car.
Well then, I'm going to ask the kids to pay me back.
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Old 09-13-2012, 11:11 AM   #59
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I disagree. Parents don't owe their kids a college education, a fancy wedding, or a new car.

Of course, parents are free to give their kids as much money as they want. The sense of entitlement is what puts a burr under my saddle.
Of course, I disagree with you. I grew up so poor that when I became a VISTA Volunteer living off a stipend of $138 a month in 1973-74 in New York that this was an upgrade in my standard of living! So I'm trapped by my own background that leads me to provide financial help to my kids balanced by my up-bringing in the school of hard knocks. I believe I owe my kids the bare necessities in life, including my complete love and affection as well as a modicum of financial support. My parental obligations, in my mind, include equipping them with a sufficient education -- it doesn't necessarily have to be a college education but if they are capable of attending a postsecondary school that will help them launch in life, I will gladly foot this bill. I don't believe my obligation to help them with an education stops with a high school diploma, especially in this age when employers demand a skilled labor force.

I never said I owe children a "fancy" wedding -- perhaps you are reading impressions you might have of parents who spoil their children. I did say I believe I will help them with a downpayment on a house or wedding. It's for them to choose; I believe it helps them financially and besides we like doing this for them. I will say that my oldest child went the house downpayment route and funded her wedding all on her own with her groom! It gives us great pleasure to help them on a major financial burden of this sort -- and it's mainly about us giving than them receiving. By the way, the wedding was fabulous and modest.

Also, I never said a I own them a "new" car, again perhaps you're adding the "new" based on your sense of parents spoiling their children. We have set aside a specified sum of money for a car purchase for each child once they become launched into the employment world -- in two cases, it covered the entire cost of a used car from CarMax; in the other case, it covered half the cost of a "new car" my son purchased after his second deployment in Afghanistan and after he ran his beat-up, hand me down 1996 Volvo to death that we gave him in 2006, as a junior in college.

The sense of entitlement that spoiled kids have in our society is irritating to me, as well. But I don't think kids have an expectation of entitlement unless they're spoiled by their parents. And developing a spoiled child is a long term process that simply does not occur by providing financial support. I don't believe proper parenting results in spoiling kids. By the way, I've had the same conversation with one of my kids that Target2019 has had with his son. I would hardly call my child's rejection of my offer to take out her six figure student loan debt from law school at 6.75% interest rate in favor of 2-3% interest rate, as a reflection of entitlement.

Of course, parents can be as "cheap" as they want to be with their money and hoard it to their grave. But your assumptions that parents foster a sense of entitlement by providing them with essential financial help (in my mind) has not been my experience.
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Old 09-13-2012, 11:23 AM   #60
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Not specifically addressing this purchase, but about the topic of young people buying new cars, I am in favor of it. If the young person has a reasonable job, they can afford it. What they cannot afford is the down time, physical risk, and breakdown potential of older cars. The seller always knows all about his used car, the buyer very little to nothing.

Also, I think that driving around in a piece of junk is bad for a young person, professionally and psychologically. What is going to count financially is your professional or business success, not how much money you were able to squirrel away in your 20s.

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