60k a year, single, 23, nothing to show!

**bjl584** · 07-13-2011, 04:05 AM

You answered your own question as to why you can't figure out how some people can live on much less than you. You have a 600 credit score and a lot of credit card debt but you want to buy a 22K BMW by the fall. You need to forget about the new car. You should put your extra money toward paying down your debts and saving up an emergency fund (3 to 6 months worth of expenses) before you do anything else. If you must buy a newer car look at something more within your means. A used honda or toyota or similar in the 5K to 8K range.

**ktmarvels** · 07-13-2011, 04:18 AM

I would echo the sentiments of forgetting the car...for now. You mention just paying off a car loan so I'm guessing you don't need a second.

Here's what I would recommend:
*Keep at least $1,000 and preferably several months worth of expenses (3-6+ depending on how secure you think your job is right now) and put the rest of it toward your credit cards, the one with 15% interest (or your highest) first.
*Possibly transfer the savings from above, your "emergency fund" to a savings account with a higher interest rate (about 1% is all you are going to find).
*Take your 800-1200 a month and apply it to credit cards.
*When you are out of debt, save that 800-1200 and about the time your current car dies, you should have money saved up for a new one or at least a down payment on one.

**riverwed070707** · 07-13-2011, 04:24 AM

If you don't already, track your spending for a couple months. Post a budget and see if we can't help you find some areas to scale back futher.

I agree the car is not a necessity and your money would be better spent else where -- saving for retirement (do you do this already?), house downpayment, even travel would be more worthwhile IMO as long as you can afford it. $60k is a lot for your age and you could really *really* benefit for getting your finances in order and making your money work for you now while you're young.

**Frugal** · 07-13-2011, 05:44 AM

I would try to save up. If you owe that much and want to buy a new car, I agree that (in my opinion, I am not a professional) there might be something a bit off on the budget. Better to sit down and form a reasonable budget that you know you can follow, and then supplement that by finding ways to shop sales, use coupons, and adopt a more frugal lifestyle.

Yes, it is possible to get by on much, much less than 60k.

**jpg7n16** · 07-13-2011, 07:04 AM

Originally posted by Jp912 View Post

With cut backs, I'm saving 800-1,200 a month. But this lifestyle shift is killing me. I want to be out of debt and purchase a used 3 series ( around 22k) by the fall.

Currently have 5,500 in savings now, but should I get another part time job to pay down credit card debt to give me a better rate.?

Hmmm... you're saying your current lifestyle is killing you, so your solution is to work more?? That may just push you more towards the edge - so I don't think that'd be a smart idea for you.

Would you mind posting your budget?

Do I apply my savings to my 15 percent interest credit card?

Balance transfer?

Put my savings into a online bank account with a better interest rate?

Say you were able to find a great bank account paying 3-4% - would you rather:

a) take your dollars and make them earn 3-4 cents/year each? (savings account) or
b) take your dollars and use them to save 15 cents/year each? (paying down CC)

Every dollar you kept in the savings account would cost you a net 11 cents/year (on $5k debt, that's $550/year) - so IMO it's obvious which one to do. And here's how I'd do it:

1) Keep 1 months average expenses in cash
2) Any other cash you have available should immediately go to pay off any debt that costs over 6%/year (start with the highest rate)
3) Reduce/raise your 401k contribution to the employer match level (no more, no less)
4) Each month, pay any excess cash towards your debt until all 6%+ debt is gone
5) Save up to 3-6 months in cash (IMO for you, just keep 3 months expenses on hand)
6) Then up your 401k to 7-12%, and do $416.67/month to a Roth IRA (will max out the Roth at $5000/year)
7) Then start saving towards your dream car

A nice fancy car is a luxury. Which is perfectly fine if the rest of your financial picture is in order. So get the rest of your finances in order 1st.

When I hear of single mothers supporting people on 35k I'm completely LOST how they do this!?

Different cost of living areas, other sacrifices made, no BMW 3 series that's for sure.

There are probably some other adverse effects (like low retirement savings). So it's not like they're living some lavish lifestyle and have everything together on $35k/year. There are sacrifices, but sometimes you just gotta do what it takes to survive.

I'm not a single mom (cause I'm a guy with no kids), but I do have a friend who is a single mom in her mid 20's. Currently she and her daughter live with her parents to make things work.

I want to make 65k this year, with something to show for it! Thanks guys!

So you pretty much want everything your parents have... today. Nevermind that it took them years to acquire it all - you want it now. You act like if you don't have an awesome car, you've got nothing.

You really need to recheck your life and make a list of the things you have that you're grateful for. For starters:

-paid for car @23
-job making $65k/year @23
-roof over your head
-spending money for entertainment
-friends and family who love you
-etc.

Life is more than a BMW 3 series.

**papa_squat** · 07-13-2011, 11:28 AM

There is already a lot of great advice on what to do here, but I just wanted to interject a spit-take that you're seriously considering blowing your money on a BMW at 23 years old, lololol. People work their entire adult lives to be able to afford luxury cars! Why dig yourself further into debt to give the illusion that you're living the high life when you're not? Interest on used cars loans can also be pretty high; if you just paid off a used car, you probably already know what I mean. Cars are notoriously bad investments, especially if you drive it less than five years. If you drive that car until the wheeles fall off, you'll likely have money to pay off your credit cards, start (or continue to fund) a retirement account, and savings to put toward a car when the time comes. Patience is a virtue, and a huge advantage when it comes to financial security.

If it's any consolation, you make $10k more than me (at 27 years old as of this weekend!). At 23, I had just started my career in my degree field at $38K and put 5% of my income to match my employers contributions. Since then, I've paid down about a third of my college debt, have about $12K in savings and investments and another $12K in retirement. I would have more in savings, but I recently dropped 13k on new car to replace my '97 Honda Civic. I live a pretty modest lifestyle, but it feels good to pay off my credit card balance each month and to sleep at night knowing that I have saving in place in case of an emergency. There's plenty to show for that

.

**uRabbit** · 07-13-2011, 12:07 PM

I am 23, married, and have a daughter. I am the sole provider. I make $15,000/year. Highest amount of debt was over $30,000. I am now down to around $18,000.

If I can live within my means, you certainly can! Half of me is unhealthily envious of your income. While I am struggling to decide what to do with my future, you're making $60k a year. Anyways, good luck.

**cypher1** · 07-13-2011, 12:38 PM

Originally posted by jpg7n16 View Post

You really need to recheck your life and make a list of the things you have that you're grateful for. For starters:

-paid for car @23
-job making $65k/year @23
-roof over your head
-spending money for entertainment
-friends and family who love you
-etc.

Out of all of that I was just going to add health.

**krantcents** · 07-13-2011, 01:43 PM

I think you should take a hard look at you r finances and figure out what is important. To earn $60K and be in debt at your age does not make sense. Start with savings and rethink the car. Cars lose value and you want to put $22K into it. When I was your age, I was married with no debt. By the time I was 38, I was financially independent (retired). Most of my success came from setting priorities, savings being number one. BTW, I did not deny myself everything for my goal, but I kept it in balance.

**DKAS** · 07-13-2011, 02:11 PM

Please do not think of the BMW. I'm not sure how consistent your income is or has been but $60K sounds great at that age. You already have a car so why not pay your debt or have an emergency fund or even invest it in your education. You'll have one less regret when you're older.

**Hector** · 07-13-2011, 02:36 PM

Its great that you are making 60k by working part time at 23 while going to school. Why not pay all your debt before thinking about getting new car?

If with all these cut back life style is killing, you should reduce cut-back amount. But do it after paying off your high interest debts.

I would sell your current car( I am sure its worth more than 10k as you bought paid of 15k on it last year), buy a cheaper used car around 5k and put rest into paying debts.

**seen** · 07-13-2011, 04:29 PM

Okay, I'll ask. What are you selling to be making that kind of money at your age?

**adstalker** · 07-13-2011, 10:41 PM

why dont you save 22k to put as a down payment for a house instead of for a BMW and a used on at that. If you are able to save 22k at least invest it in an asset that can potentialy increase in value instead of a depreciating asset like a used car. Trust me, girls will be a lot more impressed if you have a house at 23 then a used bmw

**adstalker** · 07-13-2011, 10:45 PM

Originally posted by seen View Post

Okay, I'll ask. What are you selling to be making that kind of money at your age?

It doesnt matter what he is selling or his age. If you are good at sales you can make a lot of money. It sure beats working a 9-5. When I was in high school, during summer I made about 2 grand each month selling cutco knifes. Thats the beauty of sales, your income is not dictated by others.

60k a year, single, 23, nothing to show!