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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 you’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 you’re only young once. A mortgage lasts for thirty years, and children at least eighteen years. Travel now if that’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 won’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 doesn’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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mindy@overcoffeenotary.com

 

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