What would you do if you were spending $900 per month more then you were making?

[mdmc]

DU, please help me.
What would you do if you found out that you were spending $900.00 more per month then you could afford?

The problem seems to be a car payment. The car is worth $2000, but $5000 is still owed on the car. The car payment, insurance, and gas cost $900.00.
Rent, groceries, and utilities are paid for. It is the car that cannot be afforded.

[skooooo]

1. Get rid of the car?? nt

[mdmc]

3. That would create a transportation problem

plus, the car is only worth $1000. $5000 is still owed on it. Getting rid of the car would create $4000 more debt, plus transportation problems.

I think that it may be the only way out. Thanks for the input.

[meegbear]

2. Contact the car payment people ...

explain your situation to them and see what can be done.

[skooooo]

6. That's a good idea.

They might give you a break.

[TheCowsCameHome]

10. The main thing is TALK - don't compound the problem by ignoring it.

When you ignore these people/obligations it only gets worse. Fast.

I do wish you well.

[meegbear]

19. Exactly ...

the sooner they know you're having a problem, the more likely they are to assist you.

[madokie]

31. I was faced with this once years ago and I called the bank and told them my situation

and they sent for the car had it repaired sold it and sent me a bill which was about what two payments were, a bargain beings as we owed several thousand on the POS. No hard feelings bad credit or anything. In fact we financed another auto through them later on. So to the OP I say get on the horn and talk to the loan officer person. The man I spoke with said that all banks have simular programs for when someone gets in a bind and can't pay for something anymore. They didn't even require me to sign anything or anything just my word on the phone was all they wanted.

[slackmaster]

37. Cool story, thanks for posting it

The lender knows they are going to lose if you default on the loan, and it's worse for them if they end up writing off $5K on a car they can only get $2K for. They'd rather work it out with the customer and avoid the repossession process.

The people who have titles like "Workout Specialist" have a lot of leeway.

[Wcross]

4. You would still be short unless you can walk everywhere.

Is there any way you could get a part time job to cover the shortfall? How about the rent? Are there any cheaper options? Groceries? Cutting utilities to the bone such as no cable?

[dbonds]

5. Move closer to work in a cheap place, Ride a bike. Change Ins to minimum.

No frills till you can pay off that car.

[FSogol]

7. Make some life changes.

1. Cancel cable subscription. Saves $30-70 a month.
2. Stop buying bottled water. Saves $200 a month.
3. Cancel cell phones. Saves $50-100 a month
4. Raise thermostat to 78 deg. F. depends on age of equipment but could save $30 a month.
5. Never buy coffee. Brew your own. Saves $5 a day.
6. Avoid fast food and eating out. Saves ? $10 a day?
7. Cancel subscriptions, netflix, internet, newspaper, etc. Saves $10-50 a month.

If you can't live without most of these things, you need to get a 2nd job where you make $900 after taxes per month.

A lot of luxury items today are considered necessities. It is not true, they are still luxuries.

[mdmc]

11. I've done all those things except the internet.

I think that the second job is the way to go.

Thank you for your input:pals:

[FSogol]

16. No problem and good luck. n/t

[safeinOhio]

25. A while back I saved by

spending a couple of hours a day at the library. Free internet. Free magazines. Free newspapers. Meet new people, save $ and change your life. Best of luck.

[Skink]

14. Netflix saves me about 30 a month between driving to get a video

late fees. I even watch more cause walking to the mailbox so is easy I don't put it off.

[anigbrowl]

29. ???

Obviously you shouldn't spend $200 a month on bottled water, but I don't know anyone who actually does that. Canceling your cell phone, on the other hand, is a good way to destroy your economic productivity in many cases. I only spent $1.70 a day on coffee but maybe I don't drink as much as you.

[FSogol]

32. I don't buy bottled water, but see neighbors unloading their SUVs

with cases and cases of water and diet cokes. They make a separate trip just for drinks. We have some of the best water in the country here. But, I'll give you that, a family can probably save $50 or more a month giving up bottled water.

Everyone does not need a cell phone. I work in an office 8-4 and can be reached on the office phone. After hours, I can be reached at home, or people can leave me a message. I had a cell phone for a few years and decided it was (for me) a waste of money. Most of my calls, could be handled by a little pre-planning. Many people get their kids cell phones for reasons of safety. That is another ludicrous argument. My kids know what to do in case of any emergency and don't need to rely on a cell signal. No idea what you mean by destroying my economic productivity by not having a cell phone. I got rid of my over a year ago and don't miss it at all.

As for coffee, my office provides it for free and yet most people here stop at Starbucks (or their ilk) and buy a $5 cup everyday.

If you like buying coffee or anything mentioned on my list, more power to you. Do whatever you like. My list was for someone looking to save some money.

[anigbrowl]

42. I got the impression that the OP was not a big money waster to begin with

Point taken about the cell phone, but I think a lot of people would find that a pragmatic impossibility to give up. I have a cell and pay a fixed monthly fee, but no home phone. I could not function without it - not because I spend loads and loads of time on the phone, but because I do need to be accessible 24/7 some of the time.

[TroglodyteScholar]

30. You know people who spend $200/mo on bottled water? n/t

[FSogol]

34. No. That guestimate was about 4x too high. n/t

[DailyGrind51]

8. Dump the car and buy an affordable used car.

I never buy new cars, but prefer to purchase pre-inspected and serviced used fleet cars and pay cash for them. An old boss once told me to "Never pay finance charges on a depreciating asset!" He drove the oldest car on the lot, yet had the biggest pay check.

[pansypoo53219]

21. i used to get low mileage classified cars,

but then they were nixon era oldsmobiles in the 80/90's. but they had BUMPERS. i miss my delta 88s.
paid under $2000 for cars that lasted 4+ years each.

[dysfunctional press]

38. i had a 73/74 olds 88/98 that i LOVED.

it had sat on blocks in a widow's garage for 10 years. it was a 1973 olds 98 with 18,000 original miles on it, and a smashed right fender. i paid $425.00 for it.

i went to the junk yard to get a replacement fender. the closest thing they had was the front end of a 1974 delta 88- but it had the same bolt pattern as the 73 98. close enough. the 98 was metallic royal blue, and the 88 was gold. no problem. $75.00. i got the mounted tires for another $50.

i got the front end home, originally intending to use just the front right quarter panel, but ultimately found it much easier to remove the entire front end from the 98, and replace it with the entire front end of the 88. i don't remember why. i also replaced the tires- 10 years of sitting in a garage had not been kind to the others.

so- for $550 i had a luxury oldsmobile with power everything, and only 18,000 miles on the 455 v8 engine. it was huge and the ride was smoooooth. it was like sitting on the couch, driving my living room around.

[DailyGrind51]

40. Those Delta 88s were damn good cars!

You got a lot for your money with Olds!

[DailyGrind51]

41. I still have the '97 6 cyl. Mustang that I bought from Car-Max in

1998 and the car has given me no problems. I paid cash for it, after I promised myself never to buy a rear-wheel-drive car again, just because it was so cheap, had 15K miles on it, and came loaded. I can't afford to replace it now, so I do all the regular maintenance stuff.

[bemildred]

9. Give them back their car and stop making payments?

Actually, if you stop making payments, they will come pick up their car eventually. Or you can see if they want to cut a deal that lets you survive financially? If you let them take their car back, you will "ruin your credit" for a while. But this is only a realistic threat if you expect to need credit, which doesn't sound like a good idea for you anyway.

[pscot]

12. I would stop making car payments if I were in your shoes

It will definitely screw up your credit, but your credit rating probably isn't very good now anyway. Instead of making payments, try to stash the $900 each month. By the time they repo your car you should have enough saved to buy another. Older, full-sized cars are dirt cheap right now. They're gas guzzlers, but at least they get you from point A to point B. Happy motoring.

[DearAbby]

13. Cut non essential items in your budget

try for cheaper insurance, (higher deductable, and pray you don't get into an accident) call the dealership and talk to them about making less monthly payments.

[yardwork]

15. I don't have any good advice, but I'm sending a shout out to say hi and hang in there.

I feel sure that you can solve the problem and improve your situation. It sounds like you have your health and you have a good attitude.

[mdmc]

28. Thanks for checking in my friend

:pals:

[Ikonoklast]

17. As other posters related, is the car a necessity for transport?

If there are no public transport alternatives, find the money to service the debt, either by cutting expenses or increase income. Turning the car back into the lender will only result in a deficit judgment against you when it gets sold at a loss.


Write down every single purchase, no matter how trivial, for a month. This will give you a starting point on where to cut unnecessary spending. It will surprise you how much money is spent on trivial things, impulse purchases.

Ask your employer if you can work more hours, if an hourly employee. Find a part-time job that is close by, keeping your transport costs low, and earmark that money earned solely for retiring the car note.

Between cutting expenses and increasing income, you may come up with that needed money for the payment.

It's a hard row to hoe, but with determination you can do it. I know. I did it for three years after my divorce, just to keep my house and get current on the back taxes owed. Three years of seven-day weeks, one full-time and two part-time jobs. But I got out from under crushing debt, and paid off everyone I owed.

I admit it was difficult, and I was lucky in that my part-time jobs paid well.

Good luck!

[Quantess]

18. Sell the car for $2000 and buy a $2000 car

100% cash down, completely paid. Get a beat up, ugly car with decent gas mileage.

There are several financial advisors on the radio (Dave Ramsey, etc) that recommend against making car payments. Just drive what you can afford to buy, with cash.

In fact, maybe you should call his radio show and ask him your question. He's not a liberal, but he has good advice about personal finances. http://streamingradioguide.com/radio-show.php?showid=146

[MercutioATC]

23. They can't sell the car without transferring the title...and the bank has it.

If they want to sell the car, they'll have to come up with $5k to pay it off and get the title.

[Quantess]

26. D'oh. Silly me.

I've never actually bought a car on credit, so I wouldn't know.
Maybe the dealership would buy it back?
Any way you look at it, the car is a money pit. An albatross around the neck.

[MercutioATC]

27. True. Step one should be to open a dialog with the lender.

The lender doesn't want the car, they want their money. They'll negotiate.

If that still won't bring finances in line, it's better to file for bankruptcy protection sooner rather than later.

[Warpy]

20. What I expect unprincipled people to do

(unprincipled people who can take a major hit to their credit rating) is to stop paying on the gas hog for 2 months and use that payment money to buy and insure a beater, something they should have done rather than go into hock for a new gas hog. The repo man will then take care of the problem.

Principled people will eat beans and rice* in order to afford payments on the car they never should have bought new, incurring upside down debt for most of the life of the loan. Their credit rating will remain pristine even if their lives are dull.

Debt is poison. Both principled and unprincipled people will learn that lesson from the experience, unless they also happen to be simpletons. Simpletons will simply put the payment on a credit card, thus increasing their interest rate on that loan.

*This is taken as a synonym for a welfare lifestyle: no entertainment budget including cable, a cheap diet, nothing new, broken items replaced at a thrift shop or done without, AC replaced by a fan, household items hocked or sold when there's month left over at the end of the money.

[rumpel]

22. That's awful. It shows how auto financing

is a big money maker.

I would first research whether there are other lenders with a better rate... or if the financing is with an auto dealer, I would try to negotiate. Perhaps you will end up with a newer, more energy efficient car...

[taught_me_patience]

24. We need more specifics

Why is the car worth only 2k when the loan balance is 5k? Did you roll over a previous loan? What is the car payment? What is the interest payment? How far are you driving every day? What are you paying in gas each month? Have you shopped around for cheaper insurance? What kind of car is it? Break out the costs and give some details and we can help you out.

[Super Soaker Sniper]

33. I would ask my Congressman for advice.

They seem to do the same thing with the Federal Budget and make out okay.

[BigDaddy44]

35. 1) Do not drive unless absolutely necessary

2) When you do drive, drive like a little old lady (saves gas)
3) Check your insurance. Raise your deductibles to reduce it to the bare bones
4) Ask for a raise or volunteer to work extra hours
5) Kill everything (cell phone, internet subscription, magazine subscriptions, newspaper, etc.)
6) Get the Sunday paper only and CLIP COUPONS (saves us probably $50 a month)
7) Volunteer to mow neighbors lawns, look after pets, etc. (good source of extra cash)
8) Sell stuff you don't need on ebay

[SoCalDem]

36. The only thing one could do is to get a second , temporary job

and use ALL the "profit" from it, to pay off the car.. The auto insurance company could also lower the insurance rates by raising the deductibles.. Perhaps a visit to the agent is warranted, and a plea to them to find any and all ways to reduce the insurance payments.

Gas is a given, but there's not much to be done about the car payment/insurance dilemma..

That's the main reason we loathe car payments in this household.. (carpayment-free since 1992).. When the car's bright & shiny & new, those car payments always work seamlessly with the family budget, but 5 years (sometimes 6 or 7 , these days) is a very long time, and a lots can happen..

You are not alone..there are many people in your situation..:hug:

Paying it off ASAP, is the only hope you have.. Do you have a relative who could loan you 5K, with a flexible repayment plan?

[lonestarnot]

39. Sounds like you are not upsidedown in the car. Refinance it for lower interest and payment at a

credit union.

[mdmc]

43. A second job has been decided as our choice to resolve this

thanks for all the input and warm thoughts. God bless you all!