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Posted 24 Feb 2001   For week ended May 21, 2000
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Sent on Mormon-News: 16May00

Summarized by Kent Larsen

LDS Couple Gets Financial Advice Through CNNfn
CNNfn 15May00 P2
By Alex Frew McMillan: Staff Writer

NEW YORK, NEW YORK -- An LDS couple wrote to CNNfn's weekly Checks & Balances column seeking financial planning help in meeting their family goals. The couple, Sean and Elena Ransom, are struggling to get by while Sean studies for a master's degree in journalism at the University of Missouri in Columbia. The couple find that hopes for starting a family conflict with a desire for further education.

The Ransom's have been married for 10 months, following Sean's graduation from BYU-Hawaii. They survive on student loans and on Elena's salary of about $13,000 from work as a admissions office file clerk. While they had hoped to start a family within two years of getting married, Sean realized in his last semester at BYU-Hawaii that he was interested in biospsychology more than journalism. "I started reconsidering my career plans, but by then it was too late," he writes. Since Missouri had already accepted him and applications to medical schools were closed, "I was stuck with journalism."

Meanwhile, Elena still wants to finish her degree in linguistics, started at BYU-Hawaii. She plans to start back to school part-time in June, taking classes when she isn't working.

Now the two are looking at their situation and the options they have for accomplishing their goals: education and a family. "We are asking ourselves a lot of questions," writes Sean. "These are questions that make a young husband into an old husband. We want to take care of our family and invite children into our home, but we want to do it with wisdom, and with an eye to the future."

Their budget is tight, but Sean and Elena are also committed to keeping the law of tithing. The article makes clear that they "view that as essential." The article details the rest of their budget, savings plans, and the amounts they owe for a car and student loans.

Sean assesses their situation as feeling like they have to choose. "Me getting my education and having children are tied. And that's what is giving us problems," Sean said.

The financial planners consulted by CNNfn agree that the situation is tight. Greg Zandlo, a certified financial planner and president of North East Asset Management in Coon Rapids, Minn., commends the couple for their budget, "Considering the sacrifices both of you are making to obtain Sean's advanced degree, you are to be commended for really living on a shoestring budget," He observes that the Ransoms are in a state of flux, but encourages them to stick to their goals.

Zandlo suggests that they carefully consider what loans they should take on, "Going into debt is never easy and, in your case, going deeper into debt is a necessary evil," he says. Zandlo says that the Ransoms could be looking at $15,000 or more in loan payments each year, "Unless Sean is at ease with that course of action, it's quite an albatross for upwards of two decades," Zandlo said.

Certified financial planner Robert Tull of R.W. Tull &Associates in Chesapeake, Virginia agrees, saying that it is vital for Sean to look for grants and subsidies. He says that their low income level should make it easy to meet income qualifications.

But both financial planners suggest that the Ransoms abandon attempts to invest using mutual funds, and instead simply put their money in savings accounts and money-market accounts. Zandlo suggests that instead of putting $250 a month into savings, they put $150 a month into a money-market account and $50 into an "everyday" account. "Both of you have done a great job to this point, but a little breathing room might be welcomed," Zandlo said. Tull agreed. "They're trying to do too much," he said, suggesting that they try to keep their savings as liquid as possible. "A savings program is going to help them when the car breaks down or the washer isn't working," he said. Otherwise, "the first time they're going to want to take money out, it's going to be after a market correction. It's just not worth the risk."

The two financial planners both suggest that the Ransoms get out of credit card debt and stay out, paying off the card balance immediately, if they use it. "That piece of plastic has interrupted the best-laid college plans for many a student," Tull said.

Zandlo suggests that the education should be their primary goal, before starting a family, "I would prefer both of you ... to finish school," he said, even if it's just Sean's master's and Elena's undergrad degree. But Tull isn't comfortable with giving that advice, "It's tough for me to tell them they can't have kids," he said. But he does say that the financial impact could be devastating, observing that Elena is the breadwinner right now, and stopping to have kids means no family income. "I'm not sure that you can do both," Tull said. Having children "may be something to be delayed for down the road."


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