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