Trying to teach my fiancé about money and financials

[azdisneylover]

Even then, $40K for a "work" truck that gets messed up??? TOO expensive!

True work trucks will get dings, etc because they are MADE for work on construction sites, hauling equipment, tools, etc to and from the job site. They aren't for looking pretty while driving on the freeway. $40K is a reasonable price for a decent work truck that is certified used. That isn't with all the bells and whistles either.

 

[MomToOne]

I hate to break it to you, but a LOT of people live "paycheck to paycheck" forever. We have been married almost 17 years, and we have 2 kids. We STILL live paycheck to paycheck (although we fund IRAs, a 401K, two college savings plans, and investments). We use up everything we take home, in some way or another.

If you are investing, you are not living paycheck to paycheck. "Living paycheck to paycheck" refers to the fact that you are not saving, and should you miss a paycheck, you almost immediately won't be able to pay for necessary expenses - food, bills, etc. (Or per Investopia you are "unable to meet financial obligations if unemployed because [your] income is predominantly devoted to expenses.")

It sounds like you are zero-based budgeting, where every dollar is designated to a purpose, be it bills, fun or saving. That is a very different thing than living paycheck to paycheck.

 

[redsonja76]

Ok, that makes a lot more sense. Of course to GET a mortgage with low interest, you NEED credit history and for that you probably needed a credit card. Or student loans.

Not necessarily true. If you have a good downpayment and a bank that does manual underwriting you can get a mortgage with no credit history.

 

[Jen and Ashwin]

Not necessarily true. If you have a good downpayment and a bank that does manual underwriting you can get a mortgage with no credit history.

This may be true, but you would have a much higher interest rate than someone with a good credit history.

 

[Westcoastwild]

This may be true, but you would have a much higher interest rate than someone with a good credit history.

Right. Nearly anyone can get a mortgage. But you can't get a low interest rate if you haven't got good credit.

There are businesses that make money because they offer mortgages with obscene interest rates to people who can't get a mortgage through banks. They're counting on the idea that their customers won't be able to pay the balance off quickly thus they'll get a lot of interest. It's the same idea as a car "discount". Bad idea to go into a car lot and tell them upfront you'll pay in cash. If they assume you'll do a car loan, they'll throw in more and lower the price because they think they'll make the difference up plus profit on top of it in the interest they'll charge you.

 

[kymom99]

Right. Nearly anyone can get a mortgage. But you can't get a low interest rate if you haven't got good credit.

There are businesses that make money because they offer mortgages with obscene interest rates to people who can't get a mortgage through banks. They're counting on the idea that their customers won't be able to pay the balance off quickly thus they'll get a lot of interest. It's the same idea as a car "discount". Bad idea to go into a car lot and tell them upfront you'll pay in cash. If they assume you'll do a car loan, they'll throw in more and lower the price because they think they'll make the difference up plus profit on top of it in the interest they'll charge you.

I'm not sure about that because the last 2 times we bought a car they put our application out there and a local credit union gave the best rate. The dealer wouldn't have gotten anything for either of those finance deals.

My husband had a credit score over 800 but no one would pick up a car loan for him because he simply did not have enough credit history. True story. I had to consign. The reason is that he had a judgement against him many years ago and couldn't have any assets in his name for a long time. We just got in the habit of putting everything in my name. He eventually got a credit card with a low limit that he has had for quite a while but it wasn't enough for anyone to give him that car loan.
I'll add that not having credit or having bad credit can be crippling. When my husband had that judgement I couldn't even refinance my house for a better rate, even though it was in my name only, because as my spouse he was tied to it because it was marital property. I bought it before we were married. When you get married you inherit the other person's baggage.

 

[Mackenzie Click-Mickelson]

Even then, $40K for a "work" truck that gets messed up??? TOO expensive!

Even though it was already sorta discussed I'm going to chime in. When I worked at the insurance company the underwriting rule was an F350 and above was prohibited in personal lines because it was common for F350s and above to be used for business purposes such as on construction sites. Even then F250s and F150s are also used for business and it was something that would come up where an accident would happen at the job site and the truck was under personal lines when it should have been under commercial lines since it was used for business. Now the rules talked about other trucks it's just for this example it was easier to only discuss the Fords.

My in-laws just bought an F350 custom version King Ranch for something around $80k. Before that they had an F150 Platinum edition that cost something like $70k-$75k. They use the truck to haul their boat, their horse trailer, their flatbed trailer, and now their 5th wheel (which is the reason they traded the F150 for the F350). Of course yes they bought custom versions and whatnot so their price tag went up but still. Just know that trucks people buy for work mainly speaking construction sites or places where towing capacity is required are often expensive because they are rugged, they have nicer bed liners for example, they have built-in tool storage, they have better towing capacity, etc. Don't just think of the price and say "why buy if it will get messed up".

 

[hedg12]

Been there, done that. I was very much like the OP's boyfriend when I met my wife - horrible with money and waaay too much debt. But I learned.

The best advice I can give is to be honest with each other and don't be afraid to talk about your finances. Get on the same page NOW. I'd suggest reading Dave Ramsey's book the Total Money Makeover, or at least listening to his podcast. It'll steer you in the right direction.
FWIW, 26 years later we're debt free, own our home free and clear, and she retired last year at 48.

 

[crisi]

This may be true, but you would have a much higher interest rate than someone with a good credit history.

You don't need much credit history though. Get a credit card, use it, pay it off, put it away. Maybe get a few. Maybe put something like your Netflix subscription on it and then set it up to autopay the card every month and shred the card so it isn't a temptation.

You CERTAINLY don't need to carry a balance to get a credit history.

 

[manning]

Even though it was already sorta discussed I'm going to chime in. When I worked at the insurance company the underwriting rule was an F350 and above was prohibited in personal lines because it was common for F350s and above to be used for business purposes such as on construction sites. Even then F250s and F150s are also used for business and it was something that would come up where an accident would happen at the job site and the truck was under personal lines when it should have been under commercial lines since it was used for business. Now the rules talked about other trucks it's just for this example it was easier to only discuss the Fords.

My in-laws just bought an F350 custom version King Ranch for something around $80k. Before that they had an F150 Platinum edition that cost something like $70k-$75k. They use the truck to haul their boat, their horse trailer, their flatbed trailer, and now their 5th wheel (which is the reason they traded the F150 for the F350). Of course yes they bought custom versions and whatnot so their price tag went up but still. Just know that trucks people buy for work mainly speaking construction sites or places where towing capacity is required are often expensive because they are rugged, they have nicer bed liners for example, they have built-in tool storage, they have better towing capacity, etc. Don't just think of the price and say "why buy if it will get messed up".

All at once?

 

[Mackenzie Click-Mickelson]

All at once?

lol no not all at once boy wouldn't that a sight