Your Questions About Save Loan

Michael asks…

Credit score and car loan, should I save or get a loan?

I am currently making between $1000-$1300 a month. I am about to start my first year of college and I live at home. I really want a car and have been saving up. However, my mom’s current financial situation has forced me to use some of my intended car money for other things. I would love for her to take a car loan out for me, but her credit score isn’t too great. So, I was thinking of helping her pay off her current debt (about $5000) so she wouldn’t constantly be in the whole which would then (eventually) improve her credit score and allow her to help me out with a getting a car loan and what not. Is this a good idea or wishful thinking? Should I just keep saving? And how long is “eventually” in this situation?

John answers:

Steve’s comment about managing your own debt is very good and something you should take to heart. Your money and debt are yours alone, and your mom’s is your mom’s.

If you want to help mom from time to time, that’s cool. But part of being an adult is properly managing your personal finances. That goes for mom, too.

As for the car loan and the credit stuff, don’t do it. Pay cash for a car and make sure you budget for other costs like insurance, maintenance, repairs, etc.

Paying off mom’s debt has zero value to you. Bad credit takes years to repair and paying off one bill will not change anything. Doing this will not help you at all and won’t help her much.

She cannot get a car loan for you. If you are over 18 the loan has to be in your name. Mom can cosign but with bad credit, she won’t help you get a loan. You are going to have to do this on your own.

Keep saving, do what you can to help mom, and focus on college. Getting a good education should be Priority #1 in your life, nothing else really matters. When you are done with college and get a good job, you can decide then if you want to give mom some money to pay off her debts.

In the meantime, establish good credit. Do a lot of research on credit and do not get buried in debt while you are young. By the time you are 25, you will be in a position to get any car you want. Who knows what mom’s situation will be then, but it won’t be your problem.

Good luck to you.

Chris asks…

Saving for retirement?

I was wondering what my best options would be as a 23 year old to start saving for retirement? I’ve been looking into 401k plans, but I really don’t understand that much about them.

I only want to put in $200 a month right now since I’m paying off credit cards and student loans. I gross almost $41000 a year, and I’m keeping a strict budget till my debts are paid off, which should only take about 1yr-18mo if I keep my goal of paying off $800 a month towards it.

Any advice?

John answers:

It is so difficult to save money. I am working, have kids, mortgage, utility bills, property tax, car loans, home maintance, and travel expanses …. Unbelievable. My life is depending on my pay check every two weeks since 15 years ago. I also invest my money to life insurances, and kids education funds.

You are young, and the real life has not started yet. Cut your spending and save money as much as you can now. I do not think it should use it for the retirement, but saving it for your future life.

Helen asks…

Save it up or get a Personal Loan?

I’m 19 and I work about 20 hours a week, live at home and study full-time. I have my license but no car and it’s gotten to the point where I need one to get around independantely. My mother often takes me to and from work and school (which is out of town) but my lack of car is the source of many squabbles about how “she is not a taxi”. I’m looking at buying a used car for a couple grand but i’m only just starting out and have never had a loan or credit card. Would it be worth applying for a loan so I can have the car now or should I just grit my teeth for another 6 months and save?

John answers:

Save up your money and pay cash. You’ll be much better off in the long run.

Robert asks…

Payoff Student Loan or Save for Down Payment?

I wanted to ask for some advice on a situation that I have to decide on. I am currently paying off my student loan ($16K, 3.375% interest rate, minimum payment of $263) in monthly installments of $1K. Given the current environment in the real estate, I would like to start saving for a down payment for a house. Currently, I am putting away about $500 towards that end but want to buy a house sooner than later. My question is should I reduce my student loan payments to $263 and put away the remaining $737 towards a down payment for a house?
I wanted to ask for some advice on a situation that I have to decide on. I am currently paying off my student loan ($16K, 3.375% interest rate, minimum payment of $263) in monthly installments of $1K. Given the current environment in the real estate, I would like to start saving for a down payment for a house. Currently, I am putting away about $500 towards that end but want to buy a house sooner than later. My question is should I reduce my student loan payments to $263 and put away the remaining $737 towards a down payment for a house?

As a note: I will not be defaulting on my student loan. I will be paying the minimum required payment.

John answers:

If u default on a loan u will jack ur credit up. Then what will u put a down payment on cuz nobody is going to give u any credit after so long.

Reduce. As long as they get any bit of $ u are saved.

Laura asks…

save tax on home loan?

I want to take a house loan basically for the purpose of saving tax. Can you please suggest how much loan to take and for what period. My monthly income is Rs 50000.

John answers:

Buying a home by availing a home loan is a good investment option.

The tax benefits on the home loan are additional benefits. But these might get discontinued in the near future.

Also the tax slabs have been restructured to bring down the tax. There is further restructuring in the DTC.

HMT

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