My Sister: The Plan

Woah little sis! Nice ride you got there!

So in a little less than 3 weeks my 16 year old sister will be coming to live with me. I’m supposed to be her “half-way house” between living with her mom and living on her own. She graduated high school in October (online charter school) and has been loafing around in California and Arizona the past few months.

While she’s living with me there are a few things that I have to ensure she gets done:

1. Teach her about finance. I plan on using Gail’s jar technique for our grocery spending to help teach about budgeting. I’m making her get a part time job, in addition she’ll be getting the $200/month that I would be getting from her mom. In exchange I’m going to charge her $100/month rent and utilities and have her contribute to the groceries (in the jar, of course!)

2. Get her educated. We’ve got her application in for the local community college. Right now she’ll have out of state tuition (suck) but after the spring semester is over she’ll be in state (win!). I have her signed up to apply for financial aid. Her mom has told me that she plans on helping pay for some of her college tuition, but knowing her mom I doubt this will be very much. I’ve always assumed that it would be my responsibility to help pay for her tuition. The goal is for me to be able to pay her tuition and her to buy her books (from her part time job). Once we’re at in-state tuition rates this shouldn’t be more than $2,000/year on my end (without financial aid).

My plan is to pay for her AA degree out of my pocket and then she’ll take out loans to pay for her last two years at a 4-year school. Thankfully I know some tricks to getting her a really good price at the school I teach at if she decides to go there.

Those are the two big goals. But here’s the thing…

I like my life right now.

I like having the house to myself. I like BF coming over whenever. I like my things where they are and not worrying about another person. It will be such a huge change having her around.

I love her. But this is going to be an enormous change for me.

Even with classes and work she’ll still be around a lot. I’ve decided that the only way that I’ll be able to keep my sanity (and a good relationship with BF)Ā  is to get her a car. Give her freedom to go hang out with friends she might meet, get her to classes, get her to work. The nearest bus stop is a 20 minute walk and her school and mine are in opposite directions from each other, so I’m thinking this is the best idea for the two of us.

So a few ideas crossed my mind:

1. Get myself a new car and give her my old one. While this is a sweet idea, I don’t really have the money to afford the debt/car payments of a new car. So as much as I would like to get myself a snazzy 2009/2010 Toyota Yaris – I’m afraid this one will have to wait. The plan is to start saving for a new car when the debt is paid off… *sigh*… when….

2. Get her a decent car for $3,000-5,000. There are a lot of cars in this range that wouldn’t be too bad. They are reliable, dependable, and will last her through college. The problem? I don’t want to PAY that much for her car when my car is barely worth the bottom end of that price range. Secondly, I’d still have to finance, though the payments wouldn’t be terrible for a 24-month loan. Also, I have a pretty strong aversion to buying teen agers decent cars – if they want a nice one I feel like they should work for it and pay for it with their own money.

3. Get her a clunker. This is the option I’m leaning towards. Spending $500-$800 on a car that is old as mud, still runs, but won’t last forever. I’d use the extra money in my Yearly Fund and the money I’d spend on her birthday (Dec 20th) and Christmas gift to get her a throw away car. Then she has something to drive around in. She can start saving up money from her part time job. And when it dies she can use the money she’s saved from her job to get herself a car of her choice (within reason). She can even sell it or trade it in if she wants when she gets a newer car.

I did some searches on Craigslist in the area and found 3 cars the fit the bill: $500-800, currently run, not too bent up, made in 1995 or later, reputationally sound brands. I emailed all of the owners, we’ll see if I get any responses. Who knows, I may be the owner of a new car this weekend. šŸ˜‰

As much as I deplore the idea of buying a car for a teenager, in some sense I’m not just buying it for her I’m also buying it for me. She gets freedom… and so do I. I think this is the best scenario budget-wise for me and a great way to teach her about how to save up for a car and pay for it in cash after she gets a job.

….sure do hope she gets a decent paying part time job!!

Advertisements

16 Responses to My Sister: The Plan

  1. Dave says:

    What about if she worked full time through the spring semester until she’s established residency to get in-state tuition for next fall. She’d learn a lot more about finance working full time than going to school and working part time. Then she will have saved more money toward her own education. It sounds like you’ve got some big changes. Good luck!

    • SS4BC says:

      It’s a good idea. To be honest, she’s already taken nearly a semester off now, I don’t really want her to take any more off. And when the different is $700 vs $900 for the semester it is hard to justify postponing a semester for $200. Keeping her on educational track is more important to me than $200.

  2. I am in awe of all that you are doing to help your sister. It is absolutely amazing.

    My advice is that if you go with the $500 car, make sure you have a little bit saved up for repairs, at least until she is able to work and establish some savings for the same purpose.

    • SS4BC says:

      Absolutely. I considered upping my monthly car maintenance savings from $40/month to $70/month. Not nearly double, but should help cover some things until she is able to afford a better car.

      That said… the thought of a new car for me keeps nagging at me…. Then she’d be driving my car which I *know* is reliable and should last her the entire time she’s in college (I’m guessing it has about 5 more years left before it starts to cost more to fix it than it is worth).

  3. I’ve driven the 15 year old clunker before … and I think that, when you include repairs and the costs of getting stranded, you’re paying the same over 5 years as you would if you’d just bought the reliable car in the first place. So I’d be honest with myself about how likely she is to bear the financial cost of repairs and strandings, or if you’ll be footing the bill for that anyway. I know how reliable I would have been about that sort of thing at her age (not at all), but hopefully she’s more mature than I was (I spent my first year of college, at 16, in the music major version of Delta Tau Chi).

    • SS4BC says:

      You’re absolutely right. My “idea” is that she would drive that around for 6-12 months, during which time she’ll save up around $2,000. Then we’ll use that either as a down payment on a $5,000 car or to buy a $2,000 out right in cash.

      I’m still mulling this one over for sure…

  4. Revanche says:

    How much of this plan has she been involved in? My thought is that if she’s going to learn from you as a financial resource but not take advantage of your responsibility (as many younger sibs can tend to do if there’s no pressing need to step up, being one myself I’ve been there) – she should be given the options to “rent” or “borrow” the car from you while she’s earning the proceeds for her own car. If she’s not contributing to the car she’s driving then I’m not sure how healthy it is in a sibling to sibling dynamic to be giving it away.

    My experience has been that the sense of obligation/responsibility when the counterbalance of parental discipline isn’t in the same vicinity changes things up.

    Perhaps I’m just paranoid, I just worry about teenagers in this stage of life where giving them that extra freedom without vigilant guidance feels awfully scary. Then again, I definitely don’t know your sister and she could probably be super responsible and nothing like my friends’s siblings who we worry about constantly. šŸ™‚

    • SS4BC says:

      You make a really good point for sure. Part of the reason I want it so cheap is so that she can just have it as a gift, but having a rent option may be a really good idea. Until she gets a job though, I’m not sure how viable any of this is.

      When I was a teenager I had a really, really crappy car from my parents. And after working for a year I upgraded it with my own money. I WANTED to get a new car because it was always my understanding that the car was theirs and I wanted my own. So maybe I should do that, just get a second vehicle that is my own. Tell her she can use it, but reaffirm to her that it is mine but she is borrowing it until she can afford her own.

  5. eemusings says:

    HOLY SHIT! How can you find such new cars for under 1k??? Our 1998 wagon we just bought cost us nearly 5k.

    /smh.

  6. Ninja says:

    You are a good sister, I hope your lil’ sis knows that šŸ™‚

  7. Pingback: The Car Post «

  8. Brenda Helverson says:

    One strategy is to forget the “must finish in four years” syndrome and work during school, either with or without financial aid. Generally, you only need to be enrolled half-time to qualify for aid. There are often jobs to be had around campus that can be easy but let you stay in the campus environment.

    A part-time student can keep things on track by going to Summer school. This can be a lot more fun because there are fewer students competing for resources, like reserve library books and seats in the cafeteria. It is fun to be on a 50,000-student campus with 15,000 of your fellow students.

    Summer school can also be a nice option while you are enrolled at the Community College to give you a taste of University life.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: