Wanting Financial Freedom, but A New Car Is My Current Goal

[kaharris05]

I'm still stuck on the 22% interest for a car loan. How did that happen? Car loans have been anywhere from possibly 0% to 3% the last 5 years.

Like another has asked I'm also stuck on the child support. Boyfriend or not, he owes monthly for the child and the one on the way, assuming it's the same guy.

Not wanting to really get into your relationship with your significant other but presumably part of your responsibility as a parent is to protect your children, financially and otherwise. Is there legal documentation stating the child or children are his, such as on the birth certificate(s)? Do you have a court order or a legal agreement for child support? if you don't, I'd recommend one.

If he isn't paying that on a timely basis or skips months, then the next stop would be child support enforcement because only when you involved them does the legal clock actually start to tick regarding his legal financial responsibility (unless rules have changed). They will keep track of any money not paid and accrue it for the children. It is their legal right to have this money.

Think about what you need to have in place in case something happens to you, if you can not work, or if he leaves and marries someone else down the road, etc. You can phrase it that it isn't against him, it is for the children to ensure their financial well being....etc.

So..I guess I got into this anyway....

I bought my car in 2007. That's the interest rate I got because of my credit. I hear people talk about 3% interest rates and that seems surreal.

As for the child support, I posted about that a few minutes ago. Basically, no, I do not get it.

I need to do that though. There really isn't a good reason why I am not.

 

[Keim]

I don't like to include his income when working out my budget, because he isn't consistent. Sometimes he helps, mostly he doesn't. Someone else asked if I get child support. No, I don't. That's my fault. I should apply, but he keeps saying he needs to pay off some bills before big chunks of his check starts missing. I guess I'm being too nice in even caring about all that... So, for now, I just consider myself on my own, since I basically am, and I try to work things out that way.

You are nicer than I'd be. Why do you allow him to prioritize his child as less important than his bills?

Regardless of your relationship, he has a duty to his children. I'd be looking to get this legally dealt with. Yes, he'll probably still pay late, but then he will legally owe you.

You may be wise to budget without him in mind. But I think you are foolish not to go after him for his responsibility. He needs to man up.

 

[kaharris05]

There is nothing wrong with your choices (single parent of a young child, with another on the way; heavily-financed car that you desire to trade in on a more expensive model; intention to pursue expensive and prolonged education leading to relatively low-paying career in "counselling"): however, they are all completely inconsistent with your professed wish for financial freedom.

I don't mean to be judgmental, and repeat that your lifestyle is entirely legitimate: you are essentially self-supporting and paying your bills, and have nothing to be ashamed of. That said, it appears that you want early retirement about the same as I want to speak German (i.e., it would be nice, but I'm not willing to do any heavy lifting to actually make it happen).

With the greatest possible respect, you don't need any significant help. You just need to evaluate your priorities and decide whether financial independence is sufficiently important to you that you are now prepared to make the necessary sacrifices to achieve that goal.

I truly do what early retirement; always have. I just have no idea how to dig myself out of this hole I am in. I made a lot of bad financial decisions a few years ago, and I am still paying for them. Trust me, I desperately want to turn this situation around, get out of debt, and live a happy life with my children.

My priorities: survive and give my kids a good life. I just need to get to that point. I feel like this car is choking the life out of me. The car is the big issue on my credit report, the car payment is too much, the fact that I still owe so much is too much... I think if I just get this car paid off I can FINALLY start improving things (along with moving my daughter to that cheaper school I previously mentioned).

 

[Keim]

I truly do what early retirement; always have. I just have no idea how to dig myself out of this hole I am in. I made a lot of bad financial decisions a few years ago, and I am still paying for them. Trust me, I desperately want to turn this situation around, get out of debt, and live a happy life with my children.

My priorities: survive and give my kids a good life. I just need to get to that point. I feel like this car is choking the life out of me. The car is the big issue on my credit report, the car payment is too much, the fact that I still owe so much is too much... I think if I just get this car paid off I can FINALLY start improving things (along with moving my daughter to that cheaper school I previously mentioned).

Sometimes things just take time. Make a plan and stick to it. You'll get there.

 

[REWahoo]

As for the child support, I posted about that a few minutes ago. Basically, no, I do not get it.

I need to do that though. There really isn't a good reason why I am not.

Not getting child support when you probably can falls into the category of "bad financial decisions". Take the opportunity to reverse this one while you can and use the money to help dig yourself out of debt.

 

[REattempt]

Not getting child support when you probably can falls into the category of "bad financial decisions". Take the opportunity to reverse this one while you can.

+1

Go to court NOW and ensure the child support payments for both. Don't be hornswaggled into "I'll pay you, don't worry." or feel like you will anger him if you make it formal. It is his obligation, make sure you get the court ordered child support payments. Now.

 

[REattempt]

I don't have emergency funds. Never have...

A couple of people have asked about how much my education is TRULY costing me. I appreciate that, because I've never thought about it. According to my credit report I have $47,900 in student loans already (4 years of undergrad). I need to research how much graduate school is actually going to cost me.

Right. If you finish just the Bachelors, you will have to start repaying about $600/month in student load debt. That is $7200 per year. IF you make 30K, taxes at say 3K, you will have $1650 per month to live on...not much more than now.

You will really have to make ALOT more money if you are going to add the MA and Phd...if you get to $150K in debt, your annual payments will be 20K.

 

[haha]

I don't like to include his income when working out my budget, because he isn't consistent. Sometimes he helps, mostly he doesn't. Someone else asked if I get child support. No, I don't. That's my fault. I should apply, but he keeps saying he needs to pay off some bills before big chunks of his check starts missing. I guess I'm being too nice in even caring about all that... So, for now, I just consider myself on my own, since I basically am, and I try to work things out that way.

I certainly admire your spunk. Still, I have to agree with some others above, get the Daddy's money and get it now. If he leaves, you are young and the world is full of men. By not paying child support while you are working 2 jobs and attending school, he is not being respectful of or responsible toward you and the children.

Ha

 

[Meadbh]

I have followed ppt his thread with interest and amazement. How can someone so smart get stuck In such a financial pickle?

Pardon my bluntness, but you need to get your act together pronto, for your own sake and that of your kids. Evaluate the cost effectiveness of your proposed educational path. Get out of debt ASAP. Get the deadbeat dad to pay up for the kids' sake. Take some finance courses!!!!! You have the intelligence to get yourself out of this hand to mouth way of life. Now go do it.

Then, and only then, can you contemplate ER. It is many years away for you. Sorry, but I need to call a spade a spade here.

By the way.....please don't have any more kids until you and their father can afford to provide for them.

Meadbh

 

[haha]

You will really have to make ALOT more money if you are going to add the MA and Phd...if you get to $150K in debt, your annual payments will be 20K.

This kind of debt is even hard for doctors. Avoid it. You will soon have your bachelor's, you will qualify for many business jobs with real opportunity to better your earnings over time. Some of these jobs will have strong elements of counseling and helping people. My niece was struggling with college debts about the size you now have, and her field, journalism, has pretty well been destroyed by the internet. She got a good job with a big discount broker, and gets regular raises, and has been able to move out of Mom's home, get an apartment, and get those loans paid down.

And there may be government jobs you can qualify for.

On this board we understand that many young people have huge debts, but we also understand that they will be lucky to ever retire at all, let alone early. And many of these people have no children. I think you might profit from some good but realistic career counseling. Unfortunately, most career counseling is done by people in the high schools or colleges, who may function as shills for the education and student loan industry.

Also, I would like to compliment you and say that you have a good character. You have accepted some pretty realistic information here. Not everyone could. You also are clearly intelligent and you write well. These are all big plusses.

Ha

 

[Keim]

Also, I would like to compliment you and say that you have a good character. You have accepted some pretty realistic information here. Not everyone could. You also are clearly intelligent and you write well. These are all big plusses.

Ha

I just have to agree with HA here. You have a lot of plusses.

As long as I'm writing again... I'd get on the deadbeat dad ASAP. You are about to get REAL busy when the baby comes. Take care of business first.

Oh, and forget the new car! Make the old one work.

 

[Bestwifeever]

I don't like to include his income when working out my budget, because he isn't consistent. Sometimes he helps, mostly he doesn't. Someone else asked if I get child support. No, I don't. That's my fault. I should apply, but he keeps saying he needs to pay off some bills before big chunks of his check starts missing.I guess I'm being too nice in even caring about all that... ..

Well, guess what? Big chunks of your checks have been missing for 3+ years as you have taken care of almost all of his child's expenses. Get a court order and get his wages garnished. Don't wait on this.

I second no more school til you get a job after your BA. Look for one that has a tuition reimbursement program and go part time for your masters that way, or look for anything with a college or uni that might offer free tuition for employees.

You are only digging the hole deeper by thinking about a newer car. Forget it.

 

[ERD50]

By not paying child support while you are working 2 jobs and attending school, he is not being respectful of or responsible toward you and the children.

Ha

More 'tough love' comments coming from me, and I'll take that even further - to paraphrase... 'you are not being respectful or responsible toward the children, if you don't push the issue of child support'. Not having a responsible father figure around will likely put those kids at a disadvantage already, don't add to it with additional financial disadvantages.

Pardon my bluntness, but you need to get your act together pronto, for your own sake and that of your kids. Evaluate the cost effectiveness of your proposed educational path.
Meadbh

Agreed. From what I read, going for MS/PhD was about pushing out the time that payments would need to be made. If those advanced degrees don't provide a reasonable chance of a significant income boost, you are just digging yourself into a deeper and deeper hole.

-ERD50

 

[ERD50]

...

Also, I would like to compliment you and say that you have a good character. You have accepted some pretty realistic information here. Not everyone could. You also are clearly intelligent and you write well. These are all big plusses.

Ha

Very good points. Though many of us have focused on the negative issues that need help, the positives that haha points out are very important. These put you far ahead of many others in your situation. Put those skills to work for you! I'm sure that you'll come out on top. Good luck to you.

-ERD50

 

[aaronc879]

And if he is or if he isn't, he can be made to pay up if it is established that he is the father.

He seems to be missing from all this discussion and planning, which seems very odd.

What is his income? What hours does he work? Do you want him around the children?

This entire discussion has a very odd tone as it is missing references to one of the main actors. You problems should be quite a bit less dire if there were 2 people rowing this boat instead of one.

Ha

A women I knew years ago has 2 children from 2 different fathers. One father has never had a job in his life. Can't get child support if the father doesn't make any money. When she tried to get child support from the other father, he countered and requested full custody. He won because he had a good job, no debt and clean record and she had very little income, thousands in debt and a drug charge. Now she only sees her kid when he says she can and she pays child support from her very small income. My point is, be careful sueing for legal custody or support payments when you are in a dire financial situation yourself. If the father has any interest in being legal guardian you could end up worse off than you are now.

 

[Milton]

As you believe your current car payments are choking you, it must be obvious that upgrading to a newer/bigger/pricier car is out of the question.

What sort of counselling do you want to do? You need to research the following questions (preferably by conducting information interviews with multiple people with significant current experience in the field):

- What sort of average annual experience could you expect in the first five years?
- What is the job market like in the location you'd like to live in?
- Is a Ph.D. actually mandatory, or merely desirable?
- Are there related occupations that pay more and/or require less education?

You have accepted some pretty realistic information here. Not everyone could. You also are clearly intelligent and you write well. These are all big plusses.

Good point.

 

[Papa bear]

Have you looked into peer to peer lending to try and get that car interest rate down?

 

[REattempt]

I truly do what early retirement; always have. I just have no idea how to dig myself out of this hole I am in. I made a lot of bad financial decisions a few years ago, and I am still paying for them. Trust me, I desperately want to turn this situation around, get out of debt, and live a happy life with my children.

My priorities: survive and give my kids a good life. I just need to get to that point. I feel like this car is choking the life out of me. The car is the big issue on my credit report, the car payment is too much, the fact that I still owe so much is too much... I think if I just get this car paid off I can FINALLY start improving things (along with moving my daughter to that cheaper school I previously mentioned).

First step in getting yourself oriented is to take the emotion out of the equation. You can't think straight and focus when you are emotional. Keep telling yourself that "Financial decisions are not emotional decisions." No worries. You are healthy, your children are healthy. You have the capability to make what you want out of your life.

Ok, now tough love. I have a daughter too, so I understand a bit and have some compassion for your situation,...so here goes:

Put a plan together...much like you might make a list of things that you need to do to prepare for your studies (papers due, exams etc) and use it in your financial life. Here is a starter list. Modify it as you see fit....

1) Go to the courts NOW and get a child support order in place. DO NOT allow ANYONE to dissuade you. PERIOD. You cannot collect back support unless the order is in place so anything you think is owed up to the point you get the order is not enforceable. You will then at least have some income AND a bit of a safety net.
2) Keep the car. Drive it and be glad you have one. There is lots of good advice here on re-negotiating and I included a link in an earlier post about how to apply anything you do pay to principle. Pay 2K NOW on the car, follow the process to get it applied to principle.
3) Keep the other 2K until you have the child support order in place. If the payments are coming, then you can apply the other 2K to principle on the car loan once you have a safety net.
4) Forget about the credit score. It will not change until you are ON TIME with your payments for 24 months. Doing 1,2,3 will put you in the best position to not miss another payment.
5) Move your child now, or ASAP to a cheaper school.
6) When you have excess income (from child support payments, or from the extra funds from moving your child) take 50% and apply to the principle on the car loan and put 50% aside for emergencies.
7) Learn as much as you can about the careers and salary associated with each level of your educational approach (BA, MA, PhD). Understand the cost of each and how much debt you will have at the end of each. Use an online calculator to understand the monthly payments associated with each level of debt. Figure out if it is really worth the debt for the additional education. If you are worried about the car now, you have a rude awakening when the student debt loans come payable...I think it will be long term hurt that you don't expect.

Put a date next to each one of these tasks and hold yourself to it. I bet you will feel a bunch of relief when you complete 1-5. You will congratulate yourself in 10 years if you complete 6 & 7.

Hopefully this helps and good luck...

 

[growing_older]

See the cautionary tale a few entries back about starting a custody war and risking losing.


Aside from that, child support isn't for YOU. It is for YOUR CHILDREN. You should not be allowed to waive THEIR right to be supported by both parents. Please rethink your choice to allow dad to provide no support.

 

[SecretlyFI]

I agree with all the advice given, especially the steps listed above. I sense that right now you've got motivation to make these improvements. Take advantage of that. I also predict that if changes are not made, in a few years this energy will have been depleted, you could be burned out with two kids, a 7 day a week schedule and mounting resentment. A larger amount of debt at that point will just increase your stress.

I watched this exact thing happen to a relative of mine. Divorced, raising 3 teens and pregnant, she chose to give her boyfriend a free ride and not expect (or enforce) anything from him. Too afraid to lose him. Fast forward a bit, the little one is now 3; mom's working 2 jobs supporting everyone, is furious all the time that she has to "do everything". She is currently suffering with shingles her stress is so high.

So you are definitely doing the right thing making changes now. In addition to all the great advice here, spend some time considering what advice you would give someone as their counselor and then follow it. Could be one of the best ways for your education to pay you back!

 

[kaharris05]

Thank you all for the advice and kind words. I am too sleepy right now to reply individually, but I will try to tomorrow. For now I will just say that I have a lot to think about and a lot of work to do. Biggest lesson I have learned from this: don't buy a new car right now. Reducing/eliminating my debt is the priority. I will use my tax refund to pay down my car bill, while putting some in savings. I'll be back tomorrow.... Thanks so much everyone!

 

[lhamo]

REattempt's advice above is stellar.

Before you commit to graduate school be VERY clear about what the employment prospects for your planned career are. Do not count on being able to be a professor (3x as many Ph.Ds graduating as tenure track positions available in many fields) and also be VERY clear about what the licensing requirements are for your chosen field if you plan to go into counseling as a profession. I believe in many states you are required to work a serious number of hours under a licensed counselor before you can yourself qualify for a license. that is often at very low pay, if you can find someone to sponsor you. Also be aware of how changes to the health insurance system may impact the field in the coming decade. Hard to predict, but there should be some guidance that you will want to consider before you commit yourself to a long a gruelling academic road that may not pay off as you like.

Also, educate yourself NOW about whether or not your current student loans will continue to accrue interest while you are in grad school. This is a huge issue, and one of the reasons there are often stories about people with thousands of dollars in student loan debt. The initial amounts they took out may have been reasonable at the time, but when you are in school for 10+ years (not unusual for MA+PhD programs in some fields) and interest is accruing at 6-7% or more, that adds up VERY quickly.

If you do commit to going to grad school by all means AVOID MORE DEBT! If you are good, you should be able to get scholarships/research assistantships. A program that won't offer you at least partial funding should be avoided at all costs. Do research now to determine which programs do provide full funding (or at least 5 years of support in some form that would cover your tuition and basic living costs). Consider cost of living when choosing a school, too -- costs of living with 2 kids in NYC will eat you alive, whereas if you are in Minneapolis you might actually be able to save a bit if you have a good stipend.

Start reading the Chronicle of Higher Education and Inside Higher Education NOW to educate yourself about the state of graduate education/Ph.D. employment trends in the US. They often have links to other resources that can help you educate yourself.

Don't be scared of waiting a couple of years between finishing your BA and starting grad school. Better to get a good foundation under your feet and really know what you want, and not rush into anything that will put you in dire straits financially. It is EXTREMELY difficult to juggle pre-school aged kids and grad school, especialy if you have to work, even with a supportive partner. I wouldn't do it. Wait until the youngest kid is in at least the latter stages of preschool before starting your grad program. That's what I would do if I were in your position (DH and I met in grad school and deferred starting our family until we had been working for over a year in our first professional positions).

good luck and keep coming back here. You have a very different background than most of us, but I hope you have found the advice helpful. We really are pulling for you and hope you can make this work for you and your kids.

 

[daylatedollarshort]

There has been a lot of good advice in this thread. I think with your financial situation, I would take a good look at some of the higher paying careers you could get with an AA degree at a community college. Look for something with a higher salary potential for a lot less educational debt.

A good place to start your research is the Occupational Outlook Handbook -
Occupation Finder : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics

Compare the pay, career prospects and amount of educational debt for your current plans to something like a dental hygienist and think long and hard about which one would provide a more debt free life and a more financially secure life for you and your children. You can always go back to school nights and weekends for additional degrees once you have a solid income and an emergency fund built up.

Good luck.

 

[Accidental Retiree]

There has been a lot of good advice in this thread. I think with your financial situation, I would take a good look at some of the higher paying careers you could get with an AA degree at a community college. Look for something with a higher salary potential for a lot less educational debt.

A good place to start your research is the Occupational Outlook Handbook -
Occupation Finder : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics

Compare the pay, career prospects and amount of educational debt for your current plans to something like a dental hygienist and think long and hard about which one would provide a more debt free life and a more financially secure life for you and your children. You can always go back to school nights and weekends for additional degrees once you have a solid income and an emergency fund built up.

Good luck.

+1 great advice! Advanced degrees will always be there. Stop with the school debt and get more work experience. Your graduate work will be more meaningful to you and you will bring more to grad school and later work in counseling with some years of experience under your belt.

 

[clifp]

On this board we understand that many young people have huge debts, but we also understand that they will be lucky to ever retire at all, let alone early. And many of these people have no children. I think you might profit from some good but realistic career counseling. Unfortunately, most career counseling is done by people in the high schools or colleges, who may function as shills for the education and student loan industry.

Also, I would like to compliment you and say that you have a good character. You have accepted some pretty realistic information here. Not everyone could. You also are clearly intelligent and you write well. These are all big plusses.

Ha

I completely agree with HaHa, not many people would have been so willing to accept the rather tough advice you've gotten here. You are to be congratulated for doing so.

While this forum does have some 20 something, most of us are considerably older than that and honestly it is kinda of hard to relate to your hole.

I know there are other forums on the internet that are more geared to helping people get out of a financial blight. Hopefully the forum member can provide some suggestions.

As for child support no matter how much you love your boyfriend, you simply must tell him. That he has to start paying to support his children (I am assuming that both our his). You can do it the easy way, or you can get a court to make his life a living hell until pays up.


I'd start with handing him the tuition for your preschool, although you can give him the option of taking care of the kid while you are at school and working.