Determining Money Values
Your values play a big role in determining the way you spend money. If you don’t understand how your values and emotions influence your money decisions, you’ll never be able to gain control and make better money decisions. Take the money personality assessment to understand your money values.
Steps for Decision Making
Making financial decisions is a huge process. Decisions to buy big tickets items such as homes or cars should not be taken lightly. Here are a few questions to ask yourself or discuss with your family:
- What is the money issue or decision you need to make?
- What are the possible options or choices for making the decision?
- What are the possible results (pros and cons) for each option or choice?
- What is your decision? When will you look at the decision again?
- Additionally, using a decision satellite map may be helpful.
Can You Afford a Home?
When buying a house, it’s important to stick to a price range that meets your needs and will be affordable with your current income. Keeping this price range in mind, you can have confidence during the application process. Consider the following:
- Overall Cost: If you have good credit, a steady income and a reasonable amount of preexisting debt, it may be safe to estimate that you can afford—and will qualify for a mortgage on—a home that costs 2.5 -3 times your gross annual income (the amount of your paycheck before deductions). You’ll also want to factor in steady income from other sources, such as retirement, disability, child support, social security or alimony. For all income, you must be able to show a history of at least two years, and a likelihood that the income source will continue.
- Mortgage Payments: Before approving your mortgage loan, a lender will examine two different ratios:
- Housing ratio = the maximum percentage of a borrower’s gross monthly income that can be used to make the monthly mortgage payment, including principal, interest, taxes and insurance (or PITI). This percentage will be pre-set based on the type of loan that you are applying for, and is typically between 28 and 33 percent.
- Debt-to-income ratio = the maximum percentage of a borrower’s gross monthly income that can be used for the house payment, plus all other debts. These debts can be from credit cards, vehicles, student loans, etc. The debt-to-income ratio is predetermined based on loan type and ranges from 36 to 41 percent. It’s important to know how much outstanding debt you have before applying for a mortgage. If you find you have a lot of debt, you might need to pay some of it off before applying for a mortgage.
Communicating About Money
Are you a good listener? The I-Message is a helpful tool for couples and families because it helps you express your feelings in a calm way. For example, if you were discussing paying bills with your spouse, you may say, “I feel nervous when I notice that the phone bill is not paid because I worry about bad information on our credit report.” Additionally, these steps may help you communicate better about money:
- Find the real problem
- Talk only about the problem itself
- Face the problem
- Brainstorm and talk about options
- Agree on a plan
- Support the plan
- And keep talking!
Setting S.M.A.R.T. Goals
Do you have financial goals that you wish to reach, but it seem like you never do? Maybe you’re not being detailed enough or writing your financial goals down. It’s time to get SMART about your financial goals! SMART is an acronym that stands for Specific, Measurable, Attainable, Realistic and Timely.
Michigan State University Extension Educator Wanda Roberts explains SMART goals in the video above. Use our SMART goals worksheet and work toward your SMART goals today!
Events
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Apr 12
Adulting 101 2024- Full Listing of Monthly Sessions
April 12, 2024 – November 19, 2024 Zoom
Are you ready to leave for college or be out on your own? Join us monthly on zoom to learn real life skills to help you successfully transition to living independently.
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May 9
Homeownership Education Webinar (MSHDA) - May 9, 2024
May 9, 2024 4:00PM – 8:00PM Zoom webinar
This homeownership seminar from MSU Extension will provide you with valuable information about the home buying process.
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May 10
How Much Home Can You Afford?
May 10, 2024 12:00PM – 1:00PM Zoom
Looking to buy a home? Learn how to calculate how much home you can afford based on your current income during this 30-minute lunch and learn event.
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May 16
Retirement Myths and Facts
May 16, 2024 12:00PM – 1:00PM Zoom
Thinking about what your future will look like? To reduce confusion about retirement it is important to separate fact from fiction.
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May 22
Homeownership Education Webinar (MSHDA) - May 22, 2024
May 22, 2024 9:00AM – 1:00PM Zoom
This homeownership seminar from MSU Extension will provide you with valuable information about the home buying process.
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May 22
Protecting Your Identity
May 22, 2024 12:00PM – 1:00PM Webinar
This one-hour webinar will discuss how to protect yourself from identity theft, what to do if someone has stolen your identity.
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May 22
Savvy Tips for Starting a Small Business - May 22, 2024
May 22, 2024 4:00PM – 5:00PM Zoom Webinar
The class provides financial tools to entrepreneurs and potential small business owners who are considering starting a new business.
News
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MSUFCU offers three educational videos on business planning and financing for entrepreneurs
Published on February 13, 2024
MSU Product Center clients are encouraged to access this information to help grow their businesses. -
The newest pick-up line: What’s your credit score?
Published on June 15, 2023
Research has been found that examines the linkage between relationship status and personal credit scores. -
5 facts to know about mortgage insurance
Published on June 15, 2023
Add mortgage insurance to costs if your down payment is below 20 percent when buying a home. -
Buying on a land contract instead of a mortgage
Published on June 15, 2023
A land contract may give you the option to purchase a home after foreclosure, bankruptcy, or low credit score.
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