Need some financial advice. Here's my story.

[aquatect]

Hello,

I am new here. I have been struggling to figure out what I want/need to do to maximize my returns and keep making money.

Here's how it breaks down:

My credit score is 668. This is artificially low and I expect it to rise in the next couple of months.
Before two weeks ago I was carrying high balances on my five credit cards totaling about $4k, but more importantly utilizing a significant amount of my avail. credit.

I took a $6000 personal loan to refinance this debt, which was accrued over a period of about 5 years while I was in college.

I am now out of college, but I still don't have a good job. Presently I work at a jewelry store, but my girlfriend and I are moving to the suburbs of Philadelphia for a job she got there so I will be starting new work in the New Year.

My debts include:
- About $20k in student loan debt in my name, which I am paying.
- 5 credit cards, all with $0 balance. One is a secured credit card from Capital One. They have $200 of my money. I have considered closing this account to get that money back as I no longer need the account. I don't know how closing a secured credit card account will affect my credit, though.
- $6000 loan at 3.8% which translates to about $120 per month. I plan to pay at LEAST $200 per month and get this paid off early.

I have $3500 in savings and $4000 in a money market account (stock ticker VPMCX own just shy of 60 shares). I also have about $2k in silver and gold that I've bought at lower prices over the years tucked away in a safe deposit box.

My car is a 2001 Chevy, it has never had any major mechanical problems, which leads me to believe that my good luck in that area is always likely to run out. It is probably worth about $4500 if sold privately.

I am 25 years old and I have no retirement savings accrued yet. This makes me sick to my stomach as an early retirement is my ultimate dream. However, in each of the two jobs I've had since freshman year of college have no paid me enough for me to not miss any percentage of the paycheck. I have saved enough now that I can begin investing in my future in the next job I get and I 100% plan to. I would ideally like to contribute at least 10%...more if I'm able to.

So my financial situation is probably best described as "stable". However, I am not able to get a mortgage or even a high-end credit card with my credit. As I am no longer using high percentage of credit I would think my credit score will slowly rise of the next few months. However, I have two late payments on my credit report to credit card companies. Both in October of 2011 when my mother was hit by a car and I had far more expenses than income that month. Other than that I've never been late. I have asked both companies to remove these on good-faith and they have refused (indians in india named patel write me emails telling me they're "very sorry" but due to their goal of maintaining the fairness of the credit reporting procedures they can't remove things from my account). So there's nothing I can do about that I guess except wait 7 years for them to drop off.

The bad stuff is that my girlfriend, who I do plan to marry, is like $100k in debt from student loans. The good news for her is that she will be tripling her income in Jan. when she gets her new job. It's still not enough to pay that down in any reasonable time and her credit is complete ****, but I am hoping I will have high enough credit eventually to be able to buy an inexpensive house.

My question, I suppose, is what should I be doing right now? I am not working after Friday and I will find a job in January as soon as we move. I plan to take whatever I can get to start while I look for something better but I actually have a line on a decent job so I believe I will be ok.

What should I be focusing on when/if I have a little disposable income? What should I try to be investing in? Should I remove the $4k I have in VPMCX and try to invest it in some higher risk higher reward stocks or maybe a different mutual fund?

I really hate dealing with this kind of stuff, to be honest. I just need some solid advice from people who know more than I do.

[bjl584]

Forget about two things.

1) Your credit score
2) buying a house

The first thing that you should do is find a job. I wouldn't make a move with my debt or my savings until I had a job and had some idea of what my income will be.

Be careful closing old cc accounts. It will lower your score. Close a few of the newer ones if you must close any.

The 3.8% personal loan is a low interest rate, but I would want to get it paid off ASAP anyway. Sell the metals and anything else that you can to get it paid off. DO NOT wipe out all of your savings to pay off your debt! If you have an emergeny you will be forced to use your credit cards again.

A house should be the furthest thing from your mind right now. You will want 20% down and a 6 month Emergency Fund in place before buying a home.

Your credit score will fix itself. Focus on your debt not your score.

[thecollege123]

RE: "Money is only useful when you get rid of it. It is like the odd card in Old Maid

"It was said that money is only useful when you get rid of it"

though this may be true, you can never save money once you only see money as something you can dispose. Yes it is true that money can only be useful, however you may never see its true value unless you save it...

[Gailete]

Absolutely forget about your credit score and focus on paying off your bills. I realize at the risk of getting in hot water here, take a good hard look at girlfriend and her debt and think about do you really want to take that onto yourself? Why is she in such huge debt? Was it all strictly for school debts then hopefully that is why she is getting a well paid job, but if she was living on this money while going to school, charging clothes, shoes, food, etc. and never held down a job, I would want to see how she handles her money and her debt obligations with her job before ever thinking about marrying her.

[snafu]

You have a plateful of decisions to make in the next few weeks. Those choices will impact what happens in the next five years I figure. How will you fund the upcoming move? When moving to a new location there are always unplanned costs like damage deposit atop of 1st month's rent, deposit for utilities [electric, heat, trash] and possibly parking. I'd skip a landline and hope you & GF have modest cost cell phones.

What has caused GF's poor credit rating [***]? What is her money management philosophy? What is the plan for paying joint expenses? Is it 50-50 split for basics like rent/utilities, food, transportation [gas/maintenance], insurance [auto/rental], entertainment, clothes etc. less payments for personal loan, student loans for example? Will you split costs via percentages based on earnings?

As others have mentioned, your 1st priority needs to be funding an emergency fund. Life throws challenges and those are more easily overcome if there is funding in place. 2nd would be to start retirement plans linked to employment particularly to take advantage of any matching employer funds which is free money and worth sacrificing immediate gratification for long term benefits. Retirement counts on long term compounding. There is nothing to stop you from squeezing every dollar to clear your personal loan of CC debt asap and snowballing that sum to savings for a 20% DP. It all comes down to the choices each of you makes. Buy a newer car, delays home ownership, every restaurant or take meal further delays your goal. I presume you've already seen what happens when you miss a payment or are even a day late. You can get much better interest rates if you have a high credit score; you get a ghastly interest rate in the 600 range.

The reason we advocate a 20% DP is that anything less requires inordinately expensive mortgage insurance on top of regular mortgage payments, municipal taxes, maintenance utilities and regular home insurance. Over the l-o-n-g term of a mortgage it's a horrid expense. Most people don't understand how amortization tables work. The first half of all payments are merely interest, it takes a long time for 50% of the mortgage payment to reduce the principal.

Hoping you make all the right choices to move you seamlessly to your life goals.

[maat55]

Personally, I would cash out the stock. Once you are employed and can make a budget, I would start working on the 6k debt. And, I think I would leave your PM's as they are.

Like the others, I would not worry about your score. I had one card(PIF) and a mortgage, and my score was/is in the upper 700's.

When you move, you should find a place you can afford on her salary. You should be using your income to payoff debt and build for a down payment. Do not worry that housing prices will go up, they are going nowhere for quite a while.

Consider her SL as part of your rent/mortgage.

At 25, you are showing good signs for doing well with your finances. Before you say "I Do" make sure you and your GF are compatible with money.

Good luck.