Financial Plan-What do you think?

[kelly]

OK. Finance is not really my thing, but I am REALLY trying to get my act together...Basically what I want to know is if this sounds like a good plan or not! Here are the basic facts:

1.) I am going to be graduating in may with lots of student loans (~55K) The majority of which are private loans (it was the only way I could pay for school at the time...I realize how bad this is no need to lecture.)
-My monthly payment is going to be around $550, however I plan on paying about $1500 per month since I will be living at home.
-I will most likely have a starting salary of about 35-45K.
-I also need a car in order to commute to my future job (currently do not own one at all) and I feel a better investment would be to buy a cheap, but new car. I am looking at the toyota yaris for ~13000 because it is one of the best for gas.
-Car payments=~300 per month.

Does this all sound do-able if I am living at home? Should I put more money/can I afford to put more into the loan? I am also thinking of consolidating the private loan but I am not sure if that is a good idea.
OK if anyone has any advice for this situation I would really appreciate it!!

 

[nonyabiz]

It is a good idea to at least look into consolidating your student loans - check your current interest rates vs their interest rate, how much they can change (my student loans will not raise above a certain percentage, but they're Stafford loans), and what the monthly payment will be.

Also, make sure that the extra you are paying each month is going towards the principle of the loan - not the interest. My student loans REFUSE to allow my extra to go towards the principle (it all goes to the next monthly payment) so unless I'm going to actually pay off the entire thing there is no point in paying much more than the minimum each month. Check that this is not the case with your loans.

Also, do not get a new car. Get a used car that is a year or two old but has a good consumer report rating. And the gas mileage is not the only thing to be worried about - the repairs and the likelihood that you'll have problems are more important. I would also hold off on the car until you have a job secured if you can. The market is terrible so it may take you a little while to find a job (start looking now) and it would be terrible to have to make car payments without a job.

 

[Sigma]

You are going to be graduating. Congratulations. Way to go.
If I woke up in you place, this is what I would be thinking. I already have a lot of debt. I do not want to buy a new car with a payment and add to the debt load. Buy a used car with cash. Maybe pay the minimum the first few months on the student loans and save a few thousand for a beater. Getting a new car fresh out of college while carrying all this debt is one of the biggest mistakes I see people make. If you do not have a $300/month car payment, that is $300 extra you can throw at your student loans. Wait to get a new car until later when you can afford it. Insurance on new cars is higher than on a beater as well, so what you save in gas, you more than throw out the window in higher insurance rates.I know how much you want a new car, but part of growing up is learning to control your money. You need to get on a budget to know where all of your money is going. A budget is not a constraining tool as much as it feels like it. A budget is, believe it or not, a very liberating thing. You will be able to tell your money where to go, not wonder where it went.
By all means, live with your parents rent free as long as they can stand you. Take advantage of the free rent to pay down your outstanding debt. Think about it this way. If you make a $1500/month payment to the student loan and have an extra $300/month to throw at the debt by not having a car payment, that is $1800/month to get out of debt with. You will be done with it in 2 1/2 years. If you have $1500 / month and a new car payment it will take you over 3 years to pay it off.
I would like to suggest that you read a book called the Total Money Makeover by Dave Ramsey. You can find it in any bookstore or library. This book will open your eyes to the reality of finances and the biggest mistakes people make. My wife and I read it and, man have we been stupid. After reading it, we are now on track to be out of debt very soon. This has helped us out so much. I wish I had this information when I was getting out of school. You are young enough where you can make a wonderful life for yourself by having a little financial restraint and a good plan in place. The biggest hinderance to wealth is debt. You can not borrow your way to being rich.
I hope this has been helpful. Dump the debt. Debt is dumb, Cash is king.
Good luck. I wish you all the best and congratulations on your graduation. Now go attack the world.