Marriage or Mortgage?
There is a new show you might want to start binging on Netflix if
you are a Millennial called Marriage or Mortgage, where young couples have to
choose whether they get the house or whether they get the wedding. The real question is can you have both if you
plan sensibly with your money?
Excuse me… does this house come with a walk in closet?
One of the biggest mistakes young millennial couples make is
starting with their near close HGTV dream house as their first home instead of
putting a down payment on a starter home.
Your first house should be practice so you can get the feel of the cost
and effort of owning a home and certainly the purchase should be more practical
than aspirational.
Younger couples should not extend themselves beyond a mortgage
payment of 25% to 28% of their pre-tax income including principal, interest,
taxes, and insurance. The reason this is
such an important number is that first time homeowners often underestimate the
cost of furnishing their new home, the cost of ongoing maintenance and upkeep
of a home, and most notably the increased cost of basic bills such as gas,
electric, and water when they move from an apartment to home ownership.
Doesn't a wedding last for a lifetime of memories?
It's true that a piece of real estate is a physical investment
that you can touch and feel whereas a wedding is an intangible emotional
investment. In 2007, the average cost
for a wedding was $16,000 and today is has ballooned to more than $34,000. Much of this fueled by the over the top
'Instagram' moments and shows including Four Weddings and Say Yes To The Dress
which may plug ideas that aren't a reality for your budget.
Young couples need to recognize that making smart money choices
doesn't have to mean you avoid having some wow factors at your wedding, you
just may not be able to have it all. In
the end, the people who come to your wedding are there because they want to be
a part of your special day and aren't entirely concerned if they take home a
fancy centerpiece.
Under no circumstances is it worth it to put yourself into
personal or credit card debt to fund a wedding that you think will impress your
friends and family only to be gambling that you'll make the money back in the
envelopes you open up late night at the hotel from the wedding.
If you would like to receive more information on making smart money moves for your future, be sure to contact us today!
