Mother & My Money: "My Way or Do It Yourself"

[MinTea]

I have a feeling that this will be long, so I’ll try to keep things as simple as I can.

 

Here goes…

 

I’m looking for a car, and it’s really putting a strain between my Mother and the rest of the family. I don’t have enough money to purchase a new vehicle, but I have plenty saved up to buy a decent used vehicle. I think I’ve found the car I want but question is, what is the most beneficial way for me to pay for it? I could pay up front (I DO have enough money), or I could take out a small loan and pay in installments (to build credit).

 

Background Info: I’m 23, and a recent college graduate (Graphic Design Major, 3.5 GPA). I’m back in my hometown and living with my parents again. I had a temporary job for the summer, but they won’t be needing me soon and I have another job lined up. The new job is part time and pays much less, but it’s a stable company and I think I’ll be able to get more hours relatively quickly. I have no credit score and am having trouble finding opportunities to start building it up. I am not in debt (my parents have paid from my education) and I am not stupid with money (I would never go out and purchase something with money I knew I didn’t have.)

 

Since I’m not being offered benefits at the new job right now, I figure it would be safer to stay at home for the time being. And, since I don’t have any credit, it would be hard to move into an apartment anyway. But the drive to work is 45 minutes, and I need a safer car for the winter (the car I drive is owned by my parents., and is NOT good for driving long distance in snow). If I had a better income and some work benefits under my belt I would move into the city where I work and would buy my parents vehicle from them (since I wouldn’t mind just driving around the city in the winter with this car.) But I’m just starting out at the new job, so I won’t be moving out until things grow more stable.

 

My mother is dead set against me using a loan to build my credit. She is holding my ‘car money’ in one of her accounts (to earn better interest), and I need to get the money from her in order to use it. She wants to use my money so SHE can purchase my car upfront and then she would transfer the title over to me. My father, brother, and sister-in-law feel that I should take the opportunity to build my credit since I have none. They feel that my mother should give me back my car money, so I can show it to the bank and assure them that I can afford a small loan, and just want to earn credit.

 

I don’t know what to do. I want to build my credit so when I become more financially stable, my credit score won’t be holding me back from moving closer to work. My mother is upset with me for bringing this up, and is refusing to help/advise me at all if I decide to take out a loan (She is willing to return my money, but will not help with anything else). She is telling me that the insurance I pay will go up if I take out a loan and that credit score has nothing to do with car insurance prices (it’s the opposite, right? A good credit score would make the price go down, right?)

 

I’m grateful that my parents have paid for my college, but now my Mother feels as if I’m acting ungrateful. I just want to find out what would be best for me in the long run. I'm not experienced in taking out loans and would like some guidance from my mother, but she is unwilling to help. My brother says he will help me, but I don't want to be a bother to him. Then again, he knows what I'm going through... My mother was still balancing his checkbook even when he got married (I can at least do THAT myself)... My sister-in-law had to fight long and hard to get her out of their financial dealings. This whole ordeal makes me so nervous and sick to my stomach.

 

So… What is your opinion on this? How should I pay for this car? Sorry if I’ve been too vague with this post.

 

Note: I won’t be penniless after purchasing this car… I still have the money in my personal savings and checking accounts.

 

Thank you very much for your input!

MinTea

[shlee]

I didn't read your entire post.

 

I think if you are only working part time, don't know how stable this job is or what kind of hours you will get or $ you will make, DON'T TAKE OUT A LOAN YOUR PARENTS WILL END UP PAYING FOR YOU (or will be sent to collections) when something bad happens.

 

It sucks that you are 23 and your mom won't give you your money, but I think taking out a loan in your situation would be a big mistake.

 

If you want to build credit get a credit card, make small purchases and pay it off every month, or put your cell phone in your name or something like that.

[Tayla]

Can you perhaps expand upon the fact that you gave YOUR money over to you mom entrusting that you would get it back and in your own account? Sorry, but your first mistake ,and one that I hope you can resolve, was turning your earned money over to another being. First way to establish credit is to have credibility. That was not a wise move to gain self sufficiency.

 

To build credit - start with a small department store card...or a gas card...then build in that direction. Yes a variety of credit is important but at this time you are at the beginning stage...a loan may not be such a grand idea given that you may not be granted one or require a co signor.

[Angel1111]

Yeah, I'm having trouble with this one, too - why on earth did you give YOUR money to your mother? And I'm guessing that you're not even a co-signer on the account. To put it bluntly, your mother is a control freak. My son is only in his 2nd year in college and I don't have anything at all to do with his checking account, and I only occasionally look at his college finances online. If your mother was still controlling your brother's money after he was married, then she's nuts. Sorry, that's the only way I know how to say it. The thing is, you need to realize this and keep her as far away from your finances as possible because she doesn't understand the concept of boundaries. People like this are very subtle manipulators.

 

My thoughts on the car situation is that while it may be good to establish credit, I think it's smarter to pay cash for the car. If you want to establish credit, go open a Macy's account, spend $100 and then pay it back in 3 mos. Don't get sucked into this idea that you need to get into debt in order to have good credit. Those are banks and credit card companies spouting those ideas because THAT'S HOW THEY MAKE MONEY. Don't buy into the debt game. Get just enough credit to get established and then kiss it goodbye.

 

Regardless of what you do with the car situation, get your money back from your mother. If you can, find someone else to live with, too.

[MinTea]

Tayla: My mother has always had access to my bank accounts and she would occasionally take out money from my savings and place it in her money market because she earns better interest than I do. If I questioned her about it, she'd say that she didn't want me to blow it on unnecessary things. It's not as if I was voluntarily giving her my money.

[Angel1111]

Tayla: My mother has always had access to my bank accounts and she would occasionally take out money from my savings and place it in her money market because she earns better interest than I do. If I questioned her about it, she'd say that she didn't want me to blow it on unnecessary things. It's not as if I was voluntarily giving her my money.

 

How do you figure that you weren't voluntarily give her your money, honey? A checking and savings account are 100% private - they belong to you and to you only. If your mother is a co-signer on your account then that means you agreed to that. This is the equivalent of handing your money over to her. I suggest that you change that very soon - right after you get your money from her.

 

It's completely ridiculous that she have any kind of access whatsoever to your accounts. As I said earlier, my son is 20 yrs old and has had a bank account for two years. The only thing I know is his account number and I can only use that to make deposits into his account. I'm not a co-signer on his account and have no need to be. I have no idea why your mother thinks she should have 24-hr access to your bank accounts.

[KikiW]

I agree with what's been said - build credit with small department store credit cards, or gas cards. Use them to pay for one thing, then immediately pay it off. The thing about car loans is that you end up paying thousands in interest, so if you have enough to pay cash for the car, I would pass on the loan bit.

 

Also, you need to get your money away from your mother. Take $100 and go to your local Chase, or Bank of America, or whatever, and open an account. Heck, most of the time, once you start and account, you can open separate accounts right online - like you want a checking that your paychecks go into, and a savings account for a house, and a savings account for fun/vacation money... Also, you can usually set it up to puyt all those little department store and gas cards right on your account so after you buy something, go home, pull out the receipt, and immediately pay the bill. point is, while she may think she is doing you a favor by taking money that is YOURS and putting it into HER investment accounts, she is still stealing your money and not giving you a say in what you want to do with it.

 

So open your own account, get all your money out of her accounts, and put it where YOU think it should go. So she may be able to make you an extra $20 because she has a better interest rate? I say the extra $20 is worth the piece of mind you get by being on control of your own money.

 

(She has no business telling you, a 23 year old, what to do with your money - thinks you blow it on unnecessary things? It's your money to blow. Kids make mistakes, one of them is often what they spend their money on.... she needs to let you and your siblings learn how to handle your own cashflow and stop being a helicopter parent).

[New Again]

Agree with what everyone else has already said.

 

As yet another frame of reference, I have had a savings account that my dad's name was on since I was 5 years old and had an allowance that I was required to put half of into savings.

 

When I turned 16 and got a job and a checking account, we took my dad's name off my savings account.

[Crow9726]

I suggest you pay cash for the car and build your credit in other ways.

 

One of the best ways to get credit...and not have to start off with a credit card...is to borrow against money you already have in the bank. You said you already have your own checking and savings accounts separate from the car money your mom controls. Since you won't really "need" the money you borrow...ask your bank for a loan of $500 secured by your savings account of equal or greater value. You pay them back monthly. You don't have to worry about not being able to access your savings account since you now have $500 in hand you aren't planning on spending. Make your payments out of that money and chalk up the little bit of interest the bank earns as your "admittance fee" to the world of credit.

 

Or...to assert your independence and prove a point to your mother...pay cash for the car. Title it in your name only...add nobody else's name. When your clear title arrives you can approach your bank and take out a small loan using the title to your car as collateral. That will establish a small amount of "car" credit...which is much more beneficial to your credit score than a credit card is. The insurance cost your mother mentioned can only mean she is recommending liability coverage only on a fully owned car as opposed to full coverage on one that has a lien against it.

 

I do agree you need a credit card...it's just that a card alone can potentially do you more harm than good.