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Author: aja91 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308230  
Subject: Re: STRUGGLING COLLEGE STUDENT NEEDS YOUR ADVICE Date: 5/20/2001 9:18 AM
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well, i dont really know where to begin, just that im in such a HUGE hole at such a young age due to my stupidity. To give a little background info, IM currently 22 and a senior in college working a full-time job (45-50 hrs week) In high school i started my own company and made really, really good money. ($50k year at 17 yrs old)

That's impressive!

Its hard to believe, but i blew 90% of it as soon as i got it.

This habit is the reason most everyone here who ever had credit card debt developed the problem in the first place. It's not hard to believe at all.

One thing all this money allowed me to do was get alot of credit cards quick, with high credit limits. Well, my freshman year in college, I got three credit cards, all with limits of $10,000 each.

Time for me to rant here, but not at you. I really wish the credit card companies would at least give folks a chance to graduate from college before hitting them up with the opportunity to add to the college loans most already have. End rant.

My hobby at the time was old muscle cars so i went and payed cash for an old car. . .A year ago i also bought a new Cadillac Escalade...My car payment is $943 a month, $150 insurance . .I am putting the car up for sale next week for $17000 (thats high for what its worth)

I'm assuming the car that you're selling is the muscle car you've been restoring. You mentioned you paid cash for the car and that the restoration costs are on credit cards, so there are no loans directly collateralized by the car itself - you can do whatever you want with the proceeds. So whatever you sell the car for (let's say $15000, since you think $17000 is high), I'd apply the money in this order as it's available:

$8000 - Sell the Cadillac and get rid of that $943/month payment! [you mentioned your were $8000 in the hole on the loan)
$4000 - Buy a reliable used car for transportation to replace the Cadillac.
$1000 - Emergency fund. This is so you don't need to resort to using the credit cards you'll be paying off. If the used car you purchased is fairly reliable (do your research!), maintenance costs should be reasonable.
$2000 - apply to the credit cards.

The next step, if you haven't already, is to develop yourself a detailed budget. You need to allocate money to standard expenses like food, transportation, and school expenses, but also ensure that you maximize the amount you can send in to apply to the credit card companies. Keep your eyes open for special offers which will let you transfer balances from high rate cards to low rate cards, and be sure that your payments are sent in plenty early to avoid late charges.

It will take time, but you can beat this.


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