Today’s advice for young couples looking to buy a house is: don’t take out a significant loan until you have a safety fund built up. This is accessible cash that you will have left over after you make your down payment. This should be at least several thousand dollars. Some financial advisors suggest that you have enough money saved up to pay for six months of expenses at your current standard of living.
The reason for this, of course, is that you never know what troubles may find you after you are in debt. Your car may break down, your furnace may quit, etc, and you want to be prepared. The Bible has quite a few verses that talk about the wisdom of being financially prepared for tough economic times (Proverbs 21:5,20, 27:12, 30:24-25). It’s just common sense.
However, there is another point of view that is sometimes used to counter this argument. My Senior Pastor Paul Tautges’ mentions on his webpage some advice by John Temple that those who are experiencing serious credit card debt stop saving money. Actually, John has a point. Someone who is up to their necks in debt might be better off paying off their high-interest credit cards rather than saving money. But his policy clearly has some risk to it. That is why I advise young couples to take certain steps ahead of time to avoid getting into the situation that John describes in the first place. The advice given in my articles is not intended to show you how to get out of a bad situation as much as it is to show you how to never get into that kind of situation to start with. There is a lot of advice out there on how to get out of deep debt. But instead I am trying to give some practical advice on how to avoid deep debt in the first place. I don’t want to assume that everyone is going to make the wrong decisions to begin with. I want to give advice to young people so that they can be financially wise throughout their entire lives!