Are Your Current Spending Profiles Destroying Future Financial
Personal spending and credit profiles
Debbie in San Francisco, California:
"My fianc├ę and I recently have ordered our credit reports in
preparation for our wedding expenses and buying a home. My credit is
fine, but his has some problems. He has always been flamboyant, which I
love about him, but his spending sometimes is overly generous.
There are two collections on his report, one for a cell phone bill and
another for a doctor bill. Both he says arent his. His credit card
balances are extremely high, and the car I thought he was buying is
actually a lease with a high payment.
Will these things hurt us when we go to buy a house?"
Debbie, you deserve a pat on the back for doing your homework and taking
preparatory steps before spending for your wedding and finding a house...
Spending profiles are one of the most important aspects of any financial
relationship and yet the least understood.
If your spouse tends to be flamboyant, yet is having financial
difficulties, you need to talk about budgeting. If your profile is much
more conservative, a good understanding of each other is critical in the
beginning so you can head off problems later.
The word budgeting will sound like nails on a chalkboard to the
flamboyant spender. But chalkboard it must be if the relationship is
going to survive.
If you love this man, and his benevolent nature is part of his appeal,
certainly dont clip his feathers completely. He wont survive.
For example, explain to him that an extra $400.00 a month spent on
restaurants and dining out with friends could be spent on a mortgage
payment for a home where he could really entertain his friends.
Yes, if the collections are not paid, it will hamper your ability to
purchase a home. If he disputes them, pay them anyway before they grow
larger with penalties and interest. Settle later. In my experience, 98%
of the time the collections are accurate, and the client simply doesnt
recognize or remember them. If he insists they are not his, then contact
the credit bureau with a dispute form. They are required to have
documentation proving the validity of the claim, or they should remove
it from his report.
As far as his credit balances being too high, all I can say is that its
all-relative. I dont have enough information to tell you if his high
balances would interfere with your ability to qualify for a mortgage or
not, or if his income is adequate.
To find an answer, you should make an appointment with a loan officer
and go through the pre-approval process for a mortgage, whether you buy
now or two years from now. This would be a good learning experience for
both of you and let you know where you stand.
Every situation is different because we are all individuals. But one
rule of thumb that will always help regardless of your situation is:
Start tracking where every dime is spent. Keep a running worksheet of
your expenses and expenditures. I have attached an example worksheet.
Actually seeing in writing where your money is spent is the best
behavior modifier I know.
Remember, you cannot overcome an obstacle you cannot see.
Additional information on this topic:
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