Author Topic: Starting Out  (Read 3377 times)

BeerBeard

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Starting Out
« on: November 06, 2014, 10:03:00 AM »
Hey Guys,

Just thought I would start a general thread to ask advice and share what I've done so far. As a carefree 25 year old with stable employment I had never taken my finances seriously, that changed about 45 days ago. I would like to buy a house soon, but currently don't have much in the way of a downpayment.

What I've done recently:

No Brainers:
Used my savings to pay down 2k in credit card debt, I have about 1700 left.
Ordered the republic wireless $25 a month plan, I have sprint now and my 59.99 unlimited everything plan mysteriously costs me $86 every month. My contract is up with sprint, so I spent ~$150 on the Motorola G, but I plan to recoup more than that amount by selling my used galaxy S4 on ebay. 
Saving ~$400 a month eliminating habits and vices.
Placing $540 a month in Vanguard 401k(With company match)
Placing $498 a month in Cash Value Pension(With company match)

Dilemmas:
Traded one of my firearms for a truck. Now I know the blog is pretty hard on trucks, but I've already saved on delivery charges and helped a friend move out of state. I was destroying the clutch on my Jeep Patriot towing the trailer frequently, plus the economy of my 4 cyl Jeep goes way down while towing. My current dilemma is whether or not I want to sell the Jeep to be free of a car loan.

Jeep:
2011 Patriot 4x4 5speed
26-29 MPG with conservative driving
Worth $8,000-8,300
Owe $6,458 @ $372 a month. 5.9% interest

Truck:
2000 Chevy Silverado 1500 4x4 4.8L V8
17-22MPG after my custom tune(Empty of course)
I just replaced the shocks, MAF, Plugs, Wires, Air Filter, Tires.
Took it to a relatives dealership to have all brake lines replace

Daily commute is about 30 miles each way and I typically drive 25 thousand miles a year, some of them being for work. I would save another ~$40-43 a month in car insurance selling the Jeep, and then I would have an emergency fund of $1200. Should I sell it and pay for the increased gas costs of the truck?
« Last Edit: November 06, 2014, 10:56:04 AM by BeerBeard »

juuustin

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Re: Starting Out
« Reply #1 on: November 06, 2014, 10:10:38 AM »
Dude pay that nasty 5.9% loan off ASAP.  Even before adding the money to the retirement accounts, IMO.  Guaranteed 6% returns are hard to beat.

Bart1ma3u5

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Re: Starting Out
« Reply #2 on: November 06, 2014, 10:38:07 AM »
Dude pay that nasty 5.9% loan off ASAP.  Even before adding the money to the retirement accounts, IMO.  Guaranteed 6% returns are hard to beat.

I agree to paying off the 5.9% loan ASAP, however I would not give up an employer match to do so, I would contribute the minimum to get the full match THEN put EVERYTHING toward the Credit Card loan if it is higher than the 5.9% THEN the 5.9%.

Additionally, I would definitely sell one of the vehicles, but more likely both and get something more efficient.

[EDIT: To add auto suggestion.]
« Last Edit: November 06, 2014, 10:40:15 AM by Bart1ma3u5 »

juuustin

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Re: Starting Out
« Reply #3 on: November 06, 2014, 10:45:21 AM »
Dude pay that nasty 5.9% loan off ASAP.  Even before adding the money to the retirement accounts, IMO.  Guaranteed 6% returns are hard to beat.

I agree to paying off the 5.9% loan ASAP, however I would not give up an employer match to do so, I would contribute the minimum to get the full match THEN put EVERYTHING toward the Credit Card loan if it is higher than the 5.9% THEN the 5.9%.

Additionally, I would definitely sell one of the vehicles, but more likely both and get something more efficient.

[EDIT: To add auto suggestion.]
Good catch.  I must have missed the employer match part of the contribution.  Definitely contribute to get the match (free money), but hammer the car loan hard.  The $1,700 CC should also be targeted of course.

red7

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Re: Starting Out
« Reply #4 on: November 06, 2014, 10:59:23 AM »
What are you towing and for what purpose? Could you possibly use a vehicle besides a low MPG truck to do it? 25K miles at 17-22 MPG empty and worse with towing is going to add up to some serious $$ very quickly.

If the towing is for work only, then you might consider keeping the truck and using it only for those purposes. (And either get reimbursed or use it as a deductible work expense on your taxes.) I would definitely get rid of the Jeep and buy something (with no loan!) that gets the same or better gas mileage to use as a daily driver, assuming that you don't tow things as part of your daily commute.

If you can find something that can tow the trailer AND gets better gas mileage than truck, I would examine that option very closely.

BeerBeard

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Re: Starting Out
« Reply #5 on: November 06, 2014, 11:12:18 AM »
I am contributing the minimum amount to receive the company match for retirement.  I could probably pay off the card and the Jeep just buy selling the Jeep, then I could save cash for an efficient commuter car. I'll intend keep the truck as a purpose vehicle even if I do eventually get a commuter car, unless I can purchase a home by work like I intend to, then I would keep the truck and bike to work during spring, summer and fall. My girlfriend has a Civic coupe that will be paid off by year end, so the truck wouldn't be used for long driving amounts.

Is this a good plan? I would like to start saving money for a down payment on a home, rather than aggressively paying down the Jeep. I should add that my reason for this plan is that I'm nervous quantitative easing will end and interest rates will be higher next year. Maybe someone with a better understanding of economics can let me know if that fear is rational.

Thanks!

 

BeerBeard

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Re: Starting Out
« Reply #6 on: November 06, 2014, 11:16:47 AM »
What are you towing and for what purpose? Could you possibly use a vehicle besides a low MPG truck to do it? 25K miles at 17-22 MPG empty and worse with towing is going to add up to some serious $$ very quickly.

If the towing is for work only, then you might consider keeping the truck and using it only for those purposes. (And either get reimbursed or use it as a deductible work expense on your taxes.) I would definitely get rid of the Jeep and buy something (with no loan!) that gets the same or better gas mileage to use as a daily driver, assuming that you don't tow things as part of your daily commute.

If you can find something that can tow the trailer AND gets better gas mileage than truck, I would examine that option very closely.

I don't tow for work, mostly just moving large things. With the truck I have an 8 foot bed and don't need to tow anything, with the patriot anything that doesn't fit inside goes on the trailer.

bugbaby

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Re: Starting Out
« Reply #7 on: November 07, 2014, 01:10:03 PM »
Sell the jeep, and save the 372 + 40 a month + the 1200 net toward a mustachian fuel economy car, then if you must, keep the truck for hauls etc with only liability insurance