AN 18-year-old lost $70,000 after making some irresponsible decisions.
However, the teen received some financial advice on how to climb out of the hole.
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A college freshman is in a bind after poor credit management.
The 18-year-old called into The Ramsey Show – a debt management advice show hosted by Dave Ramsey.
He purchased a $40,000 car on credit, but now he’s looking to exchange it for something within his budget.
“I’m currently 18 and by the time I graduate, I’m probably looking at a hundred to $120,000 loan,” the teen said.
“My current car is under my mom’s name with her interest rates on it.”
The student from Toronto, Canada explained that his mother’s credit was ruined by his father leaving.
Now, he’s looking to trade the car in for one with less interest.
However, he may have to max out his credit cards just to keep up with the down payments on it.
“You’re a college student … with a $40,000 freaking car,” Ramsey said.
“What are you doing with a $40,000 car? You’re a college student.”
The student explained that he had a $70,000 car, plus another $60,000, but his interest shot up to 12% after his mom’s credit was ruined.
“I don’t think this is you’re mom’s fault,” Ramsey replied.
“You bought a $40,000 car and you’re in college. Get a $4,000 car.”
Despite being incredulous to the situation, Ramsey offered some helpful advice to the struggling teen.
The young entrepreneur said that his income is around $1,000 to $1,500 a month from retail.
However, he had a side business and $70,000 which is now gone.
Co-host Jade Warshaw advised looking at the Kelly Blue book value in order to get maximum value for the car.
“Your situation sucks beyond belief,” Ramsey said.
“The decisions you have made are beyond suicidal, financially.
“So you’ve got to throw a stick of dynamite in the middle of this freaking mess you’ve created and it’s going to be really uncomfortable.”
Ramsey then advised the student that he may need to quit school and start making money.
“I want you working like 80, 90 hours a week going to school on caffeine and doing what normal people do when they get in this.”
The expert’s best advice was to focus on climbing out of debt before taking on additional commitments like school.
“Quit college for a year and take a gap year and go clean this mess up while you work like a freaking maniac.”
