Listener Daniel Murrell to analyze his financial situation. He shares a great strategy for making college affordable.
Daniel is twenty three, lives in Southern California, works and goes to school. And he has a smooooth voice. Daniel works in overnight freight for Home Depot. Daniel shares an apartment with his brother. His portion of the rent is $475 a month and the utilities are $65 a month. Daniel makes about $1300 a month, paid bi-weekly. He’s able to use one check for living expenses.
He drives a motor cycle to work rain or shine. Daniel’s transportation situation is one of the things working for him and working against him. He rides his motorcycle to work rain or shine. Daniel bought the bike used, spends $13 for gas a week and pays $140 a year for insurance. However, Daniel bought a car with a personal loan a few years ago. The car is long gone, traded in for the awesome bike but he’s stuck with the payment. The balance on the loan is about $3500.
Daniel is investing monthly in Betterment. He has a few credit cards with $0 balances one with a small limit that usually carries a balance. Daniel keeps about $800 in an emergency fund.
What can Daniel do better? The biggest problem is the personal loan used to buy the car. Daniel is no stranger to hard work. In the past he has worked multiple jobs and doesn’t mind doing so again. By picking up another job for a few months, Daniel can get that loan paid off and use that money to invest more in Betterment. Daniel should keep his unused credit cards open. Closing those cards will lower his credit rating by shortening the length of his credit history and lowering his available line of credit.
What did Daniel teach us? He goes to school for two semesters, takes a semester off to work and pay off the previous semesters. Genius! This is something all students should consider.
We also steered Daniel to Jim Wang’s site Microblogger so he can monetize some of his hobbies. But I think he should do voice over work or record audio books. People would pay to listen to Daniel read from the phone book!
Shiner White Wing Belgian White: Andrew’s tipple.
Betterment: LMM’s and Daniel’s favorite investing tool.