Thursday, January 22, 2015

Future’s sweet if you follow a plan

5:20 AM Posted by Unknown , No comments

QUESTION: I’m a 27-year-old, second-year apprentice chef, and recently moved back in with my parents following a breakup. It’s not the best situation but I’m trying to make it work and I see this as a good opportunity to drill down on some debts I’ve accumulated. I owe a little over $6000 on a credit card and personal loan and $15,000 on a car loan. I know that’s not good. But what are the best steps I can take to set myself up for the future and make sure I enter my 30s on the right path?


ANSWER: It totally sucks to be you right now. Make no mistake, while you’re living under your oldies roof, you’ll have to play by their rules. If they’re not charging you rent or board, they’re effectively giving you money, and that almost always comes with an (emotional) catch.

So, here’s how to make it suck a little less: Put on your big girl pants, sit down with your parents and show them your financial plan.

Here’s a sample one:

First, agree to pay them some form of board (it could be preparing them meals, it might be doing cleaning, it may well be cold hard cash). Whatever it is, it’s important to set the boundaries of what is expected from the get-go.

Second, save $2000 in a high-interest online savings account.

Third, if you have access to public transport, talk to your lender about selling your car and paying down as much of your loan as you can.

Fourth, devote 70 per cent of your after-tax income to paying down your debts.

And, finally, give your parents a definite time as to when you’ll leave the nest — for good.



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