In need of advice!!!!

Icelander 33,

Yo! You gotta chill. You're all jizzed up, and ready to dive head-
first into life, not even thinking that the economic water, so to speak,
might be real rocky and shallow right about now.

Let's start by counting your assets:
1- You're in college. When you graduate, you'll have many options
open. You need to protect that flexibility.
2. You've lucky if you've got free lodgings and free meals. At your age,
your Mom is doing you a huge favor letting you stay at home.
Every day that goes by you aren't spending money on rent and food.
You have to look very hard at your relationship with your Mom and
your behaviors that are causing her concern. Hey, she's probably the
biggest reason you can go to college and be considering a $11k car.
3. You have a job and it appears that after necessary expenses you
have some spendable income -- just a thought, are you budgeting
saving something, maybe $100 a month, before you go clubbing,
etc? If not, why not? That is where your future is, not on the Strip.

You don't need a Prius. You need basic, reliable, low cost
transportation so you can complete college. Check JD Powers and
Consumer Reports for reliability. Use Craig's List for availability.

There is nothing basically wrong in borrowing money when you
absolutely need it. There is everything wrong with borrowing
money if you aren't absolutely sure you can make the payments for the
full term of the loan. The most important thing to get from your first
'real job' is not the salary, it's the recommendation that you earn that
will get you a better second job. The most important thing about a first
loan is that you make all payments on time and create a stellar credit
record... you're most likely gonna need it to buy a house, and your
dream Prius, when the time is right.

Don't forget, missing a single credit card payment is essentially
turning a good financial management tool into a high interest rate,
blood sucking, grind-you-into-the-dirt, millstone around your neck,
liability. Don't use the credit card to buy anything unless you already
have the money in the bank to pay for it.

Your Mom has every right to protect what assets she has; her home,
her cars. She's probably at a stage in her life where even small
mistakes/losses could be catastrophic. Is she paying the insurance for
you to drive her cars? You get in an accident and it could screw her
over royal; huge payments after that... only one car, you don't drive,
ixnay on the ollegecay!

Never, never buy a used car without having it thoroughly checked
over. First place to go is a generic "electronic diagnostic center." They
are in the phone book, and all over the place. With their report, go to
a brand specific dealer to find out what repairs or deferred
maintenance might cost. Consider having the work done at an
independant garage.

If I were you, I'd be looking very carefully at the cars parked on the
street, in driveways around where you live. Do any one of them
appear never to move? Leaves under the car, sand and gravel around
the tires? These cars are not being used. Perhaps an older person has
died. The survivor doesn't have the will or drive to go through the
hassle of selling the car. If the car is one of the basic, low cost,
reliable cars you have identified, a very careful, repectful, no pressure
approach may result in a real bargain -- after the basic checks of
course, which you have to pay for.

Good luck, and for heavens sake s-l-o-w- d-o-w-n. To build/protect
your future, you need to be making good solid decisions based on a
well thought-out, realistic plan.

 

My advice too!

Folks will think you're "crazy" and that you somehow cannot "live" without being in hock up to your receding hairline. I call bulls*** on that common social opinion

I started off very small and very cheap. If I couldn't afford to pay cash for something, I took a walk. My peers and cohorts did the opposite. I'd get a complete disaster of a fixer upper house, actually fix it up (Amazing how much you learn when you have sufficient incentive to do so!), sell it, pick up another fixer upper in better condition, fix it up, sell it, etc.

I never really started "buying" stuff till I was 36 or so. Just one day I realized I could actually afford to pay for a brand spanking new vehicle. Even then, I ended up with a 2 year old lease return, just couldn't even bear the thought of all that depreciation

Actually built a brand spanking new house when I was 37. The housing bubble here increased in size, and I cashed out at a great price and downsized into a smaller condo. Got rid of the condo a bit over a year ago and am back in a small home, in a small community

Just not having all those payments over your head is worth not having "stuff." Our ad-fueled desire for stuff is what caused the current financial mess, everything on credit. You actually need very little, and should *always* spend far below your income.

I strongly encourage folks to read "The Millionaire Next Door," to learn valuable life lessons. For example, to hell with "keeping up with the Jones!" Who are you trying to impress anyway?

http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206

Quite frankly, I don't understand this preoccupation with having a bunch of new s*** when you're young. The whole point of being young is that you have virtually limitless reserves and energy to work your nice person off and save right now.

When you're young, you're not too bothered by living in a fleatrap that is cold and draft in winter, and boiling hot in summer. You can put in 16 hour days 7 days a week, like I did for over a decade. But to mortgage your entire future to have a bit of fun in the present?

Being middle aged, guess what I discovered? I no longer have that limitless energy! I actually like a cozy warm house in winter. I can only imagine being in my 60's when I'll only have social security, if there even is such a thing by then

My folks also lived very simply their entire lives. They actually worked because they wanted to, not because they had to.

With modest savings and zero debt, like I currently enjoy, a person is light years in better shape to ride out a recession than a person in hock. I don't have to lay awake at night wondering if the sheriff is stapling a foreclosure notice to my front door

 

Back in my college days the student lot was filled with cars almost as old as the students. I rented the attic in a house located across the street from the campus where I had air conditioning in the winter & heat in the summer. In the Fall/Winter I'd keep food cold by leaving it on the window sill. (Beer-cicles taste awful.) Banks didn't send credit card offers and it was tough getting a loan. If I couldn't walk to the place, I didn't go.

Now is a good time to seperate the "want" from the "need". In the end, thrift is rewarded. If you spend before it's earned you'll always be behind the 8 ball and will need the charity of others (family, friends, strangers, and/or the government) sooner or later to survive. If you save & prudently invest you can become self-reliant and may eventually be able to buy whatever you want. You may find that your "dream car" isn't a used Prius but an EV.

Learn how to do things, whether it is driving a stick, home repairs, auto repairs, or assembling a computer. Be willing to work.

I can probably relate to your family situation but dropping a lot (for you) of money on the wrong car isn't going to make it better. Keep looking.

 

If your heart is set on getting your own car then be smart and patient. Go buy the April Consumer's Reports (the annual auto issue is each April), see what used cars they recommend and then shop for one of them. Avoid the cars they tell you to avoid. And be patient.

A few years back I bought my son a '98 Ford Escort, as recommended by CR. Great car. It cost around $3k or $4k, was a former rental car, and only had 55k miles on it. Dead reliable, nice looking and very fuel efficient. It was even fun to drive.

BTW, I've seen many used Hondas and Toyotas advertised for $4k to $6k with over 200k miles on them! Maybe that's not too many miles but it represents too much uncertainty for my liking. I'd prefer a one-owner that's 10 years old with only 95k niles on it.

 

Did I also mention I still frequent thrift stores, eg Salvation Army?

Just average clothing, I see nothing wrong with a slightly used pair of jeans that cost me under $10, usually $5, compared to +$50 for a new pair. Not sure why folks freak out when I mention I buy used clothing. It makes environmental sense too

Yes, I have a nice expensive suit/shirt/tie collection when I have to impress clients with how nicely I dress, how sharp I look in a custom fit suit, as opposed to how much I actually know.

Go figure ....

 

I'm a college student and got a prius very simliar. Definitely a choice I am not regretting.

 

Now is the time to buy a Prius. When gas is relatively cheap. If you can get a good buy on a used one, go for it. Their reliability record is the best at CR, so expect them to have the longevity of a Civic.

I prefer to buy used from the new car (ie, Toyota) dealership. You pay a bit more, but they keep the best trades, and you get a warranty. Toyota Certified has best warranty for low mileage trades.

At this point, I would not buy an ICE car. They are yesterday's technology. The paradigm is changing.