“Marriage or Mortgage”? That’s what financial advisers say
What is more important to you: a cool party or a dip in a hot housing market?
That’s the question on the current Netflix show Marriage or mortgage, poses for a select few residents of Nashville, Tennessee.
In each episode a couple has to decide: a lot of money for a wedding or a down payment?
But, in making this important choice of choosing between the practical and the romantic, are you overlooking other important financial considerations?
We asked some financial advisors how they would guide you in making your choice buy a house, throw a wedding and everything else in between.
Here is what they said.
How to Make a Responsible Decision
Deciding how to spend your savings can be an overwhelming process.
Facet Wealth co-founder and chief evangelist Brent Weiss advises clients, when faced with a big decision, to take a step back and redefine the choice from three perspectives:
What are your values How does this decision suit you?
What’s the bigger picture? Are there other goals that you have lost sight of?
Ignore the noise and get back to your values. Log off social media, forget about the FOMO (fear of missing out) and get back to your values.
“One of the first tasks I give new customers is between meeting number one and meeting number two. I ask you to come back and define what success will look like for you when we sit here three or five years from now. “
Usually, this reveals a number of other priorities that couples have overlooked when considering emotional decisions, like buying a home or a wedding.
What other financial priorities should you consider?
In reality, buying a home or going to a wedding is not necessarily a wise investment. Especially when you consider what you could do with tens of thousands of dollars if you invested it.
Weiss ran the numbers: “Let’s say a couple spent $ 30,000 on their wedding. So I asked myself, ‘What if they do it for $ 15,000 and they take the other $ 15,000 and invest it?’ ”
“Assuming a normal return, it’s not just $ 15,000, but even $ 150,000 or $ 200,000 in 20 or 30 years. It’s really worth the money. “
With that in mind, we asked Weiss and Dan Demian, a financial advisor to Albert and Tom Mingone, an advisor to Equitable Advisors, about the other priorities you should consider before dropping money at a wedding or a deposit.
An emergency fund
Building an emergency fund is an essential first step.
Mingone says he generally recommends putting the cost of living aside for at least three to six months.
And, instead of just sitting in the bank, you will be better off putting your money in a high-yielding savings account where it can continue to grow.
Dealing with Debt
“When you have high-interest debt like credit cards, you shouldn’t rush any of these decisions, whether it’s paying money for a wedding or a down payment,” says Demian.
Especially with high-interest credit card balances, you should have a low interest debt consolidation loan to help you break your budgets.
And remember, the lump sum you would spend on your wedding or down payment could save you thousands of dollars in interest on other types of debt in the long run.
“It might be worth taking the extra cash you have on hand and reducing some student loan debt,” says Demian. “It will free up more space in your budget and help you save more money on your goals later.”
“Once credit cards are paid for and an emergency fund in place, you can focus more on long-term goals like retirement,” says Mingone.
If you Putting money into retirement, you have compound interest on your side.
“That means if you start earlier, your money can grow much longer,” says Demian.
“If you neglect your retirement account and choose to go to a party or buy a house when it’s not necessarily cheap, these amplifying effects will really reduce for you.”
So you have it all
Each of the advisors stressed that it was is possible to have it all. But it takes planning, some sacrifice, and some serious thought about your values.
And if you need a little more space in your budget right now In order to achieve all of your financial goals, you have a few options.
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Save like a pro. Even if you’re on a tight budget, you may need to stock up on supplies every now and then. And when that time comes Use a free browser extension scoured the websites for the best prices and coupons so you never overpay.
Turn your pennies into a portfolio. Investing doesn’t require large sums of money or fluency in Wall Street jargon. With a popular app, you can Automatically invest your “change” without breaking your tight budget.