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What should I do with my new income?
Hello, I'm a college student so I wasn't able to have two jobs during the semester, but now it's summer and I recently started at a second job that earns 2000 a month on top of my first job where I make about $700. I have around $600 a month in bills and life expenses so you can see why before I wasn't able to save much.
Anyways, now that I have another paycheck coming in it's been hard for me to figure out what I should do with it. Especially considering I might have to quit my second job in three months when summer is over because it's not flexible and I don't know that I can manage it while taking a full load of classes too.
I owe money to three sources: a car I'm financing that has $9600 left on it, $1000 to an old debt, and I owe my mom around $800.
With paychecks added, expenses taken out, and bills taken out; at the end of the month I should have around $1300 in excess. I know this number is low, but that's because I spent most of my paychecks this month on paying off two old debts, giving my dad $200 to help with his bills, and buying some things I desperately needed. In future months though I'm hoping to be able to save much more of the paychecks.
Of course the third debt comes first because I need to start paying it ASAP, but plan on paying it in parts.
I really want to also be working on the other two debts, but my dilemma is that I know my car payment doesn't need to be paid off in a hurry (I have years left on the loan) and that I already pay $400 towards it a month. I still really want to pay it off quicker though because I'm sick of that huge chunk coming out of my paychecks every month.
I also want to pay off my mom, but at the same time it's at the back of my mind that she greatly exaggerates the amount I owe her and that my whole life my dad paid 80% of my bills and she never offered to help him when she makes just as much as he does and on top of that received child support from him. She'll also go from telling me not to worry about paying her back to complaining to my family members about me not paying her back and hounding me for the cash. She also constantly relies on me to help her, but doesn't hold my brothers to the same standard. With all these things in mind it makes me hesitant to pay her back. I still love my mom to pieces of course, I'm just very cautious of wasting my money especially if I cease to have it in three months.
My car also really needs some TLC (all cosmetic) that I'd put the cost around 2k for and of course seeing as my car is my method of transportation that's really important to me too.
Of course there are other small expenses that I know will come out that I'm not foreseeing right now, such as makeup, clothes, eating out, etc.
Can you help me sort all this out? What should I start paying first? How should I split these up into monthly payments so I'm taking on too much at one time?
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Keep 1000 in saves for emergencies.
Then pay mom. money issues can drive a wedge between people. Personally I have seen best friends turn on one another when one owes another money.
I imagine the $1000 old debt is not gaining interest. So put all the rest of in into the car payment and cut the interest down.
Do not worry about cosmetics to the car. You do not fully own the car yet.
If you are making $1300 extra each month you should be able to make mom happy and get your car debt down to $7500 and have $1000 tucked away in case something comes-up.
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I can only think of one thing besides holding on to the whole amount to have just in case of need while finishing school. So if I understand, the first job you will still have when going back to school, job and school at same time? That's how it sounded to me. So 3 months, June, July Aug. is what I am figuring you are talking about. If 3 full months, at $1.300 extra ea will total 3,900. If you are fine with having the $700 while back in school, then another possibility could be taking a chunk to pay towards what you owe on car and actually refinancing to get a lower monthly payment. Lets say you paid $3 grand towards balance on car leaving just 6,600 left to be refinanced. You don't have to sign any contract but checking this out and having the loan company give you some figures should help you decide whether to hold on to the cash or if the amount your car payment is lowered, when added to your $700, puts you way ahead of where you were before. And I would also pay Mom off by doing it as Adviceman suggested with a handwritten note that she has signed to agree she received it. Even if Mom were not trying to wheedle money out of you saying you still owe it, as she gets much older, her memory will start to have the issues lots of older people get, struggling with short term memory.
Then if that old debt has a time limit too or you just want to get rid of it, any money you save on car payments can go towards payments of the old debt of $1000. If you are diligent, you can have that paid off by summer of 2018. Or if it can wait, then pay if off once you finish school and start working full time. Since you mention TLC, for the car, I have to agree that as much as it may bother you knowing that a scratch or dent exists, it does not affect the functioning of the car. Cosmetic work thus falls to lowest priority, especially for someone still in college and working way thru it. Once you have completed your college degree and are working full time, then it is fine to save up for all the cosmetic work your heart desires.
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The cosmetic repairs to the car are to my mind a luxury. As long as the car is mechanically safe to drive dents and scratches can wait. The cost to repair won't grow more then inflation if that.
The object of a summer job for a college student is to bank as much money over the summer so they can concentrate on their studies over the school year. That is my suggestion. Pay your monthly bills bank the rest less a small amount for yourself to have fun with.
Before you return to school you should have enough money to pay you mom in one lump sum. Have her sign for it. Yes a note that states on this date my son, put your name, paid me $800 to [ay me back for what I loaned him. Have her sign it and keep it so the next time she says you still owe her money you can send her a copy.
As for the $200 for you dad unless he has asked you for it don't volunteer it. I think it is admiral that you help him out. As I said the money you earn during the summer and what you earn during the school year is meant to keep you in school.
By my calculations based on what you have given you should have just about six and a half months of funds to carry you through the school year. If you work more hours during semester breaks you have more funds.
You don't say who besides your car you owe money to. Most banks or finance companies will put debt into forbearance just like your college loans until you finish school. I suggest you talk with those you owe money and see if they will do this or lower the payments for you.
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