Dear Dave,
My wife and I are trying to pay down our debt. We’ve got a long way to go, and it’s pretty scary sometimes. We’ve also started thinking that we’d like to have another child. We’re not getting any younger, but we know this would prolong the time it would take us to get out of debt. Do you think we should wait until we’re out of debt, or until we have most of it paid off?
Holland
Dear Holland,
The only time I tell people to let their financial situation dictate when to have children is when it’s an extreme case. I mean, if you’ve got six kids and you want 20, I’d probably tell you to slow down and get control of your money first. Or, if you’re sitting square in the middle of bankruptcy, it might be a good idea to wait a year or two while you straighten things out and get back on solid ground financially.
If everything else is within reason, and you’re talking about a normal number of kids and a normal income, the idea that children will cause you to go broke is simply not true. It might slow things down a little if you’re trying to get out of debt, but chances are it won’t be anything earth shaking.
Generally speaking, I guess what I’m saying is when God wants you to have a kid, have a kid!
—Dave
Dear Dave,
I’m 18, and I have a job making $30,000 a year. I’ve also got about $40,000 in stocks and $10,000 in savings. I want to buy a house in the near future. Should I pay cash and buy it outright, or is a 15-year mortgage okay?
Sam
Dear Sam,
I love the idea of paying cash for a house, but I’m even more impressed that you’ve got $50,000 you could put toward a house and a job making $30,000 a year at age 18. Man, you’re really kicking it!
It’s a great time to buy a house. Interest rates are low, and prices are great. But the thing that keeps sticking in my mind is that you’re still just 18 years old. Now, there’s nothing wrong with being 18, but there’s also nothing wrong with waiting a few years and getting a little more life experience under your belt before you saddle up with a mortgage.
At times like this, I think about what I’d tell my own 18-year-old son. And honestly, I think I’d advise him to wait and let life happen for a while. I’m not putting you down because you’re 18. You’ve done some amazing things. But I think the best thing would be to keep piling up cash, then take a look and see how you feel and what your life is like in two or three years.
You’ve got lots of time and a huge head start already. Plus, there will still be plenty of properties out there. Then, when the time is right, either pay cash or do a 15-year, fixed-rate mortgage. And if you take out a mortgage, make sure the monthly payments are no more than 25 percent of your take-home pay!
Great job, Sam!
—Dave
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