Hi Money Minder,
I’m in a bit of a financial pickle! My hubby (M30) and I (F27) tied the knot last December, and we’ve got a little one on the way. I used to pull in $85k as a teacher, chipping away at $22k in student loans by just paying the minimum (big oops). Managed to save up $20k, then paid off my car. Blew a bunch on our wedding and honeymoon, saved some more, then dropped $8k on those pesky loans. Now I’m left with $17k in debt. My hubby’s a financial wizard, raking in $88k as a lawyer after acing law school without borrowing a cent. He’s only just started saving again after running low on cash last August.
I quit teaching, job hunting for something new that won’t break the bank. Moving apartments soon ’cause our rent’s going up, and our two furry pals need a bigger space. Looking to buy a house within the year, hoping to have $10-15k saved by April. If all goes well, I’ll score another teaching gig here. We’re thinking of moving forward with a home purchase in April. Should we make a smaller down payment or hold off for a bigger nest egg?
Cheers,
House Hunter Hannah
Response from THE MONEY MINDER:
Hello There,
Congratulations on your recent marriage and upcoming addition to your family! It sounds like you and your husband have been diligent in managing your finances thus far. Given your current financial situation, here’s a practical approach to consider regarding buying a house in April.
Firstly, it’s great that you are looking to aggressively pay off your student loan by April. This will not only reduce your debt but also improve your overall financial health. Once your loan is paid off and you secure a more permanent teaching job, your financial stability will be strengthened.
In terms of buying a house, while you may have $10-15k saved up by April, it may be wise to wait another year to save closer to a 20% down payment. A higher down payment can result in lower monthly mortgage payments, reduced interest costs over time, and potentially avoiding private mortgage insurance (PMI). Additionally, having a larger down payment can give you more negotiating power and potentially better loan terms.
Considering your husband’s $180k in investments and your good credit scores, it seems like you both have a solid financial foundation. Waiting a bit longer to save for a larger down payment can put you in a stronger position when it comes to buying a house. In the meantime, continue to save and work towards your financial goals.
All the best from THE MONEY MINDER.
