On Shaky Ground

definitely loved to spend money. Now, I ask myself if I really need what I want to buy.” he says.

Adriene wants to purchase a home. Furthermore, the couple plans to start a family in the next couple of years. Their one-bedroom apartment in Philadelphia is a modest $475 a month, but Rob owes $2,000 on his credit card, and together they owe about $46,000 in student loans. Rob still has to pay the $10,000 left on his car loan.

Adriene has set a yearend goal of having $5,000 in her savings account, and Rob is shooting to save $3,000. “We may not reach our goal, but we’re talking about money,” says Adriene.

THE ADVICE

Danny Freeman, principal adviser with Darda Wealth Management in Winston-Salem, North Carolina, talked with the couple about coming together financially.

Arrange a financial intervention. Rob’s financial irresponsibility could prevent the couple from purchasing a home, starting a family, or living a stable life. Rob must immediately cut up his credit cards and stop all spending beyond basic necessities such as food and shelter. Before any progress can be made, Rob must drastically improve his habits. It is imperative that he make an appointment with a credit counselor. The National Foundation for Credit Counseling (www.nfcc.org) can offer him assistance with devising a payment plan with his creditors and controlling his spending. In addition, it is vital that Adriene and Rob meet with a financial adviser on a regular basis.

Stop the hemorrhaging. “Adriene and Rob have anywhere from$500 to $1,000 a month slipping away as untracked spending. They need to track their expenses for a month to get a sense of where their money is going,” says Freeman. They also need to discuss their financial responsibilities, devise a budget, and stick to it.

Establish a credit history. Though Freeman understands Adriene’s fear of credit cards, she needs to conquer that fear—quickly. “She has student loans that she is paying that should help her establish a credit history. But in the post subprime mortgage era, having no credit history will become a much bigger problem than in recent years, as lenders will be more ‘by the book’ when granting credit. In fact, no credit history will be almost as bad as having bad credit,” he explains. If a lender can’t determine your creditworthiness because of no credit history, then they will assume the worse. That

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