Magic69

A friend of mine has complained for a couple of years about being "broke", even though he and his wife make over $200k a year between them. So I've shared a few tips found on this site (thanks everyone!) with him, and they've been cutting down on their debt this past year.

I asked him the other day how things were going, and was thrilled to hear they have paid off a couple of credit cards and will pay off a couple more by next year. However, he still complains that they are "broke". And I believe him because he has a hard time coming up with $20 to go golfing or to the movies, etc.

He said life will be better once they are out of debt, which he said he thought would happen by next year as well. I asked if that included cars and he said no. But, he said, he has learned his lesson with cars (he is currently EXTREMELY upside down in a Hummer H2) and never wants a car payment again... over $600 a month.

I had to laugh. You would too, right? Maybe not. Maybe I'm a bad friend, but $600 a month when you don't have a casual $20 for spontaneous fun seems, well, really really stupid.

Anyway, this statement about car payments made me wonder if he really understands why he is so broke and how he can really change his financial life around. A couple of years with a more reasonable car payment (say $300 or less a month) would make a HUGE difference to their bank account balance.

$300 x 24 = $7200

Add insurance premium savings on top of that and you have a nice chunk of change that can go a long way.

So does anyone have suggestions on how I could help my friend see that huge car payments aren't necessary and probably a big reason he is still "broke"? Because he sure doesn't seem to get it right now.