money matters

[penny]

i have a puzzle to figure out here, my friend owes my husband 1500.00 she also works for him at 9.00 an hour. she works to pay him back but since he is her only means of income he has to pay her cash as well so she can pay rent, bills. she wants to sell her car and pay him off the 1500.00 so she can start getting paid more money, then buy another car.

 

he says this is crazy that she will end up where she is at now. i say that she will have more money since it wont all be going to pay him off. he totally disagrees to the point where he yelled at me to go to a financial advisor and ask them. opinions on this please since we both disagree i would like an unbiased opinion here, is she going to have more money by selling her car and although she will be making payments of 150.00 a month on another car which she is doing now but her car will be paid off in january, but will she have more money since she wont be owing him anymore?

[Rachel]

When it comes to this matter, I think since you are kind of in the middle, nothing good can come of siding with either party(even though it doesn't sound that you are).

 

Let them figure it out.

 

Just be supportive of both and tell them you dont' want anything to do with the situation.

 

Debts have a way of getting in the way of friendships.

[penny]

did ANYBODY understand this problem?

i have a puzzle to figure out here, my friend owes my husband 1500.00 she also works for him at 9.00 an hour. she works to pay him back but since he is her only means of income he has to pay her cash as well so she can pay rent, bills. she wants to sell her car and pay him off the 1500.00 so she can start getting paid more money, then buy another car. he says this is crazy that she will end up where she is at now. i say that she will have more money since it wont all be going to pay him off. he totally disagrees to the point where he yelled at me to go to a financial advisor and ask them. opinions on this please since we both disagree i would like an unbiased opinion here, is she going to have more money by selling her car and although she will be making payments of 150.00 a month on another car which she is doing now but her car will be paid off in january, but will she have more money since she wont be owing him anymore?

[Lilly]

Sit down with your hubby with pen and paper and do the maths. It's pretty obvious to me that if she has a debt of 1500 then pays it off in one go (by selling her car) then the slate will be zero. Her money once debt is paid off will be free to do as she wishes.

 

If she is working to pay it off by the hour AND is running up a seperate debt to cover her living expenses (which I assume is being added to her 1500) then it will take her twice as long to pay it all off.

 

Does that help, make sense?.

[penny]

EXACTLY MY POINT! ! !

 

my husband is saying that she will be noooo better off since she will be buying a new car with a new payment, but only as much as it is now anyway. i don't see how he figures she will be back to square one.

 

and if the car breaks down and she needs to pay $1000. to fix it then what is she going to do? i said she will have to pay for it herself, he thinks he will have to loan her money again to fix it then she will be right back where she is.

 

anyway, what they did finally decide to do, is each week that she works, he will split the difference with her, so half of what she makes goes to the debt and the other half he will pay her in a check, so that way she will have some money left to spend and save, and also be paying him off.

 

my goodness, i can't believe we argued over something so stupid, and the worst part is i know i'm right.lol!

 

anyway, thanks alot for posting back, i had given up on it, and i'm glad someone else can see it my way too...

 

thank you again, i truly appreciate it.

Sit down with your hubby with pen and paper and do the maths. It's pretty obvious to me that if she has a debt of 1500 then pays it off in one go (by selling her car) then the slate will be zero. Her money once debt is paid off will be free to do as she wishes. If she is working to pay it off by the hour AND is running up a seperate debt to cover her living expenses (which I assume is being added to her 1500) then it will take her twice as long to pay it all off. Does that help, make sense?.