Wednesday, October 28, 2009

Financial Friday

Now I am no financial genius. My dad handled all my finances until I moved to So Cal. When I moved in with Hubby, I finally got my own bank account, because they didn't have my bank down here. When I was in college, I lived the good life. Mani/pedis, tons of new clothes, going out to eat all the time. Now that I have my own bank account, all that as stopped. I am the spender in the relationship though and he is the saver. I think its probably because he makes more than I do. I have learned a lot living with Cheapo (Hubby) and was able to support myself (seriously, no money from Hubby or Dad) through three month of unemployment. My husband and I are completely debt free. How many other college educated people in their mid twenties can say that? We were really lucky we didn't have to take out student loans and have gotten help along the way. I am so grateful because it is a very secure feeling.

I think people have figured out how to save money and not get into credit card debt. But there still seems to be a lot of people making mistakes with their money. My poor friend became a victim to a "financial reality check" courtesy of me recently.

Here are some of the things I wanted her to realize and hope you learn something from too. If you all don't need help in this area let me know and we can come up with something else to discuss on Fridays. Hopefully, its a good reminder before we go blow all our cash partying this weekend!

This friend was telling me that they were going to buy a house. I personally don't like to discuss how much money my husband and I make or how much money we have saved from what we have made, but this friend has told me how much money they make. I have used this calculator before to find out how much of a house we could afford, just out of curiosity I learned from using this calculator that we could afford more of a house if Hubby paid his car off (which he has since done). I also learned that we could not afford a house in the crazy expensive city we live in. I knew that my friend would not be able to afford a house either.

They have a car that is not payed off. They have student loans. A little credit card debt. This is one people need to consider more, a car that is 10 years old or has 100,000 miles on it. That car is going to need to be replaced soon. Will you still be able to afford your mortage payments and a new car payment? These friends were also not preparing for the worst. I just started following a blog of a lady that experienced the worst. She lost her husband to cancer. When I told my friend that she can't buy a house just because her husband makes good money because something could happen to him. She said, "You can't think like that". Well, you might end up with a big financial problem if you don't.

I know that there are deals out there right now, but that doesn't mean everyone should buy a house. This friend actually went to the bank to get a loan and was told what I had already told her, that they can't afford a house. Now don't go do the calculator, find out you can't afford a house, and stop saving! Save up an emergency fund, save for a house, save for that car you might have to buy, pay off your debt!

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