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A young couple balance needs,
wants, dreams and earnings
By Laura Shanahan • Bankrate.com
 Claudia
Jane and Michael Davenport, who now plan their life and personal
finances together, first met in a bar where they were both taking
a break from serving diners.
"That was five years ago," recalls
Claudia. "We've been together ever since, though we made it
official by getting married this year."
Claudia and Michael seem set to become a husband-and-wife
success story, complete with the large family they want. And why
not. No reason at all, but marital money matters can be tricky and
sticky and, if mishandled, they can be disastrous.
To get a clear picture of where this Rhode Island
couple's been and where they're headed, we asked a psychotherapist
who specializes in couples counseling to review the Davenports'
situation and offer comment.
But first, Claudia and Michael.
"Michael's parents have been overwhelmingly
hospitable and generous," says Claudia about the couple's temporary
abode -- Michael's family's sprawling four-bedroom home in Cranston,
R.I. "They have extended to us every possible thing they can
-- living quarters, utilities, I mean, everything -- to spare us
expense, as we save for own home."
Our very first house
But soon comes the next step: a nearby two-bedroom rental they'll
move into this month.
"Amazingly, it's only $695 a month,"
says Claudia. "Everything else we looked at, if it included
heat and utilities as this place does, was more like $1,200."
"It may not have the famous New England
charm and character," adds Michael, "but that's OK. It's
economical and practical, with an extra bedroom we can use as a
guest room for family, which is very important. It will also allow
us to save for a home sooner than a showier place that may be nearer
my job. We're willing to give up 'character' and convenience for
cost-effectiveness."
To save on the cost of housing Michael, a software
consultant, is also logging about 500 miles a week in work-related
travel.
"We looked in Massachusetts, but rents
are much higher there than in Rhode Island," notes Claudia.
"We decided to stay here for now, and are just grateful we
got the place we did."
Michael, who earns between $45,000 and $50,000,
depending on bonuses, and Claudia, who pulls in $27,500 as a paralegal
for a plaintiff litigation firm in Providence, RI, figure they can
achieve that dream house in about a year -- if they keep their belts
buckled tight.
Wedding-bill blues
"We had a $15,000 wedding," says Claudia. "A big
church affair, with a clambake the next day for the same 100 guests.
I think we only put my wedding gown on credit. We've been paying
off all the other expenses, from rings to reception and all the
frills involved, in cash."
"We've been paying it off for almost a
year -- sending in whatever we could to whoever was demanding it
first, and in whatever increments were necessary," says Michael.
"The wedding was so special," adds
Claudia. "It was an enormous expense -- but worth it to both
of us."
With the wedding debt shrunk, the couple are
busily trying to do away with $10,000 in joint credit-card debts.
They're considering consolidating with a low-cost credit-union loan
from Michael's former job.
"Besides my wedding dress and a costly
move here from Atlanta, the bulk of that debt is for Michael's education
-- he took four classes, costing from $1,500 to $2,000 per,"
says Claudia. "But as a book I read said, debt is OK, if it's
for education."
The couple expects those costly classes to soon
turn into income. His base pay will rise, as will his bonuses, as
Michael attracts new clients to his company.
Post-rebellion reformation
Claudia has also gotten a grip on what she describes as a rebellious
spending habit she developed as a teen.
"I used shopping as a way to fill certain
emotional voids," she says, reflectively. "Those needs
are being met in other ways now."
Eyeing her $200 Kate Spade handbag, she laughs,
"A gift, I swear!"
In fact, Claudia concedes that, as a style-conscious
young woman who's worked in retail fashion, the shopping habit's
been a little hard to break. But, she says, she's wrestled it to
the ground.
"Michael and I spend no more than $100
a month on clothes now," she says. "Our motto: no cash,
no purchase."
The real temptation for both, they confess,
is food.
"This is something we both agree on,"
says Claudia. "My own indulgence used to be clothes -- whereas
Michael might spend $100 out with the boys. But we both love to
dine out. It's a true mutual pleasure. We used to spend from $50
to $125 on dinners about once a week. Yes, $500 a month! We've whittled
it down to $35 to $40 lunches."
Deals on wheels
Less posh are the couple's work-related autos: an '87 Toyota Camry
and an '89 Honda Civic, which cost $2,000. Insurance for the cars
runs $1,200 yearly.
"We've got a lot of friends who have SUV's
and Volvos and really great cars," notes Michael. "They're
just a little further along the curve -- but we'll get there."
Fortunately, the couple has excellent health
insurance from Michael's job, so that's one less speed bump on their
path.
Their priorities are in synch: Pay off the credit
card debt, build up the joint savings account they've long maintained
(with no balance worth mentioning, they note) and put a down payment
on a house.
Their timetable: One year.
Laura Shanahan is a freelance writer based in
New York
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