Romance & Money
Setting Realistic Financial Goals
Order those annual credit reports
Tammy in Reno, Nevada:
"We have trouble saving money and aren't sure how our credit looks. We both want a big wedding, and our parents are able to contribute only about $5000.00. We'd like to go to Jamaica for our honeymoon. Our parents say we should save our money and use it for a down payment on a house in a year or so. We're torn which direction to go. Should we finance the rest of our wedding and honeymoon costs? Should we take out a loan or use our credit cards to have the wedding of our dreams?"
Well, Tammy, first I'd like to offer you best wishes on your engagement. And, yes, the Jamaican culture is exciting and colorful, and I don't blame you for wanting to visit there. I advise you to keep your curiosity, but also make and stick to a plan that will deliver you to your dreams without too much debt attached. I preach this consistently throughout the year, ORDER YOUR CREDIT REPORTS! Before you go forward in your credit future, you must understand your credit past. Chart your course as you would a trip on a map. Your credit report is the big red dot on the map telling you, You are here!
If you want a wedding, travel, and a house, then those are
the destinations for your trip. Plan and chart how you will make the trip. You
may have to trim some of the things you would like to do. I would advise that
you consider how nice a wedding you can have for the generous $5000.00 your
parents have offered. Create a wedding budget on which you and your spouse can
agree. Keep your parents involved
If you also want to travel and to buy a house shortly after
your marriage, develop a sound plan for the longer term. Travel is certainly the
dream of many people. If you want to travel, and youâ€™re young, unencumbered by
children and other ties, then you may want to put off buying a house and save
for and plan the trip of your dreams. Later, you can save for your home. That
may not seem like conventional, conservative advice, but youâ€™re only young once.
A mortgage lasts for thirty years, and children at least eighteen years. Travel
now if thatâ€™s your hearts desire, and if you can afford it.
If you choose to pursue the home first, learn about your
purchasing power. How much home loan do you qualify for? Can you get a zero-down
loan? Remember, zero-down loans generally include $1000.00-$3000.00 in closing
cost. Go to a loan officer now, and let him/her know you would like to be
pre-qualified or approved for a mortgage, but are planning to purchase in the
future. Most will be willing to work with you in developing a plan to meet your
goal. Ask for the copy of your credit report and credit scores so you also will
know how they look. Saving up a down payment wonâ€™t help you if your credit is
damaged. Early research will help you get a realistic idea of how much you need
to save. Saving doesnâ€™t seem so difficult if you have a plan and a goal.
If you truly want a house, and a life free from financial
arguments and worry, you need to tread carefully right now. Every decision you
make will dictate the happiness you and your spouse will be able to attain from
this day forward. Financial stress is the number one reason couples argue. There
is no romance to be found there.
Finally, create a budget for your daily life: one that you
and your spouse can manage on a day-to-day basis, month-to-month, and
year-to-year basis. If you want to spend large sums in the future on travel
and/or a house, you need a plan, especially if, as you say, you "have trouble
saving money," as many couples do.
Errol Flynn (1909-1959) once said, "My
problem lies in reconciling my gross habits with my net income." Wise
man. He never succeeded, but you can.
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