Thursday, March 31, 2005
More Bang for Your Buck: Managing Money
First comes love then comes marriage then comes money management. For most newlyweds, operating the checkbook is often the first major obstacle in the relationship. But in tonight's more bang for the buck, we found there are lessons to be learned any young couple can take to the bank.
WSVN -- For Tim and Kami McLaughlin, the honeymoon didn't last long enough. Like most young couples, they weren't prepared for saying "I do" to reality.
Kami McLaughlin: "We came up with a way to pretty much get ourselves out of debt in a year and a half and work towards that."
Getting out of debt is a familiar dilemma for financial advisor Meg Green. She suggestsyoung couples start off by figuring out who is best at balancing the checkbook.
Meg Green from Meg Green & Associates: "Couples very often have different talents. Sometimes people are really good at handling money and doing the check books and other people say I can't balance my check book."
Next, Meg says create a budget together and stick to it.
Meg: "They need to be able to say can i afford this, and know the answer."
But knowing the answer doesn't mean buy now, pay later.
The rule of thumb is don't let your loans and credit card payments take over more than 30 to 40 percent of your take home pay.
Meg: "I think younger people need to step back and say - i really need to be appropriate about my money issues so that i can be ok later."
One way to make sure you're OK is set short-term savings goals.
Meg: "I think every person should be able to live for three months if possible without the income coming in."
But don't let your long-term goals be pushed to the side. Planning for retirement needs to be a top priority.
Meg: "The truth of the mater is, every study will show a little bit of money put away when you are young has a lot more value when you are old then trying to play catch up."
Tim and Kami are starting to make all the right money moves. With some smart planning, they'll soon be shopping for their first home.
Kami: "I enjoy paying off bills. When they are done it's such a great feeling."
Also remember, it's very to be realistic about your monthly expenses. Most young families underestimate their expenses by at least 20 percent.
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