Nephew blowing it!

[BTDretire]

I have a nephew by marriage, he left a toxic situation working for his family, (it was a bad situation). He got a job in a grocery chain, worked his way into full time, and just recently got a $1.00 raise. He's excited about putting money into his 401k and the match. Everything is going good for him.
  The truck he has now, has an oil leak and may cost $1500 to $2000 to fix. The solution?
 I just found out he's looking to buy a new truck, spending as much as $40k.
At this point he has very little money and because of Covid 19, his wife has temporarily lost her part time job. They also have a 1 yr old.
  I tried to convince him how this will affect his future, but, the new truck is what he wants.
 He's making $30,000 a yr and his wife when working may make $6,000.
 I ask him if he had $40k in the bank would he spend it on a new truck, he said no way! But yet he will go into debt o spend $40k.
Arrgh!
 

[HPstache]

I have a nephew by marriage, he left a toxic situation working for his family, (it was a bad situation). He got a job in a grocery chain, worked his way into full time, and just recently got a $1.00 raise. He's excited about putting money into his 401k and the match. Everything is going good for him.
  The truck he has now, has an oil leak and may cost $1500 to $2000 to fix. The solution?
 I just found out he's looking to buy a new truck, spending as much as $40k.
At this point he has very little money and because of Covid 19, his wife has temporarily lost her part time job. They also have a 1 yr old.
  I tried to convince him how this will affect his future, but, the new truck is what he wants.
 He's making $30,000 a yr and his wife when working may make $6,000.
 I ask him if he had $40k in the bank would he spend it on a new truck, he said no way! But yet he will go into debt o spend $40k.
Arrgh!

Dumb, dumb, dumb.  But what can you do?  I wonder what kind of an oil leak costs $1500-$2000, maybe a rear main seal?  That would seem quite high to me.  If he got another quote and it would be like $1000, would that step him away from this financial cliff?  That's my only suggestion, get another opinion!  There may be no stopping him now...

[hudsoncat]

Huh, it sounds like your nephew is married to my sister! Except they have a perfectly functional CUV, they just need a truck right now. They told me it was fine because it is "a used truck. And used vehicles are more fiscally responsible than new."

At least they got part of it right. Too bad it's still a truck, too new, and their finances aren't really in a place to purchase a vehicle (per their own words).

[SunnyDays]

Ask him how much the monthly payments are (or are they "weekly" now to make the number seem smaller?), then ask him what financing rate he will get and what he will have to give up to afford the payments.  Maybe that will make him think.

[Livingthedream55]

Ask him how much the monthly payments are (or are they "weekly" now to make the number seem smaller?), then ask him what financing rate he will get and what he will have to give up to afford the payments.  Maybe that will make him think.

Not sure that strategy will work. Sadly, loan terms for cars are getting ridiculous - like 84 months! Car dealers (new or used) are skilled at reducing the pain of monthly payments to sell their product.

Unfortunately I'm not sure you can talk him out of this. I have many family members who do stupid sh*t with money all the time. Like I have a 58 year old sister who borrows against her house (Home equity line of credit) and her 401K just to maintain a lifestyle beyond her means (excessive luxury shopping, eating out, no budget). It's sad and frightening but she is continuing to live this way.

[jinga nation]

is he getting talked into a new one by one of his coworkers?

because signing a few papers is easier than diagnosing the issue, getting the part, and fixing it, or going to a mechanic. /s

[Sibley]

I hate to say it, but your nephew is an adult. Which means that he's going to make his own decisions, and there's nothing that says he needs to make good ones. Hopefully, he'll learn and will make better decisions in future.

You posted in the wrong section. Head over to the Wall of Shame and Comedy.

[dandarc]

Dumb, dumb, dumb.  But what can you do?  I wonder what kind of an oil leak costs $1500-$2000, maybe a rear main seal?  That would seem quite high to me.  If he got another quote and it would be like $1000, would that step him away from this financial cliff?  That's my only suggestion, get another opinion!  There may be no stopping him now...

Our Prius needed a gasket replaced - parts cheap, but a lot of labor having to pull and disassemble the engine. Want to say that was $1700 or something. Probably could have been done cheaper - this was at a dealership, but there was literally no oil in the car when we rolled in and we just wanted it fixed.

That wasn't even the expensive problem - about a year after that the "brake booster" went. Anything involved in that hybrid system - holy cow is that expensive. Parts alone would have been over $2,000 online for that one. We no longer have the Prius. Basically nothing for repairs for 8+ years, then it all came in at once.

[FINate]

I hate to say it, but your nephew is an adult. Which means that he's going to make his own decisions, and there's nothing that says he needs to make good ones. Hopefully, he'll learn and will make better decisions in future.

You posted in the wrong section. Head over to the Wall of Shame and Comedy.

^This. You said your piece. Now let him make his own decisions and live with the consequences. If he comes knocking later for a bailout, don't.

[DirtDiva]

Would it help to point out that $1.00 raise is less than 2 grand a year, or 3 or 4 truck payments?

[Metalcat]

He is an adult, but if he's willing to listen, it can't hurt to try.

I would point out that whatever the car payment will be now for a brand new truck may feel like a good deal, but paying the same amount every months 6 years later for a 6 year old truck sucks ass.

[John Galt incarnate!]

I have a nephew by marriage, he left a toxic situation working for his family, (it was a bad situation). He got a job in a grocery chain, worked his way into full time, and just recently got a $1.00 raise. He's excited about putting money into his 401k and the match. Everything is going good for him.
  The truck he has now, has an oil leak and may cost $1500 to $2000 to fix. The solution?
 I just found out he's looking to buy a new truck, spending as much as $40k.
At this point he has very little money and because of Covid 19, his wife has temporarily lost her part time job. They also have a 1 yr old.
  I tried to convince him how this will affect his future, but, the new truck is what he wants.
 He's making $30,000 a yr and his wife when working may make $6,000.
 I ask him if he had $40k in the bank would he spend it on a new truck, he said no way! But yet he will go into debt o spend $40k.
Arrgh!

Dumb, dumb, dumb.  But what can you do? I wonder what kind of an oil leak costs $1500-$2000, maybe a rear main seal?  That would seem quite high to me.  If he got another quote and it would be like $1000, would that step him away from this financial cliff?  That's my only suggestion, get another opinion!  There may be no stopping him now...

I would show nephew compound-interest curves that show how much $40K will  be worth 20 years hence if invested at various rates of return.

[Bloop Bloop]

The average Australian household earns about 1/2 what I earn as a single person but spends about 2/1 what I spend - so the real difference is four-fold

Go figure

I'm sure the same holds true in America

[Bateaux]

Florida Panhandle.   Forget it, that boy's getting a truck.

[vand]

This is a perfect example of the sort of cognitive dissonance at work in large portions of society. People choose what they want to believe, ignore evidence to the contrary, and in so doing create their own reality.

[mrmoonymartian]

Just send him a link to this thread. He'll either thank you for helping him see the light or you'll never hear from him again. Either way, problem solved!

[partgypsy]

He is spending more than his entire yearly salary on a vehicle? And he has a 1 year old? And a spouse out of work?
I mean if he doesn't see how collossolly stupid that, is, I don't know what will. He is blowing his hard earned money on a toy, that depreciates quickly. I say it's a toy because he has a functioning vehicle once he makes a simple repair. You can buy a functioning pick up truck for 4K. The other 36K is "toy".

It's like if the mom and Dad carefully saved $400 to put towards jr's college fund. And jr decides to take the money out of the account to buy a fancy remote controlled doohickey because jr really wants it. He has fun with it and it breaks after a month.   Except 100x stupider, because it's 40K and the nephew hasn't even MADE or SAVED that money yet. 


Fix the fricking oil leak. Start a savings fund. Maybe once he has a discipline to save actual money, like 10K in that fund, he might have a better idea of the value of the money he is spending so cheaply. 

[scottish]

Or just keep a jug of oil in the vehicle and top it up every week.    Not ideal, but the oil isn't going to harm the asphalt.

[Bateaux]

Or just keep a jug of oil in the vehicle and top it up every week.    Not ideal, but the oil isn't going to harm the asphalt.

Make a catch basin and fill with cat litter.  Park on top.

[BTDretire]

Florida Panhandle.   Forget it, that boy's getting a truck.

 Ha ha, :-)

[SwordGuy]

Damn, but a lot of people are stupid about cars and trucks.

We made darn good money, we're rich now (circa 95th percentile in US), hell, we make (retired) more than 3 1/3 times what your nephew makes (not counting stock dividends or the 4% rule), and the most expensive cars we've ever bought were 1 yr old cars for $18k.   And that was last year.

Then again, that's one reason we're rich.

[Jack0Life]

We bought a new CRV last year because older CRV doesn't depreciated that much to be buying used.
We financed $25k for 1.9%/60 months and the payments are $441/month. We hate making the payments but its 1.9% so we won't be paying off.
I can imagined financing the $40k car will be about $650/month.