Solving 3 big money challenges
By Leslie Geary • Bankrate.com

In tough economic times, it's easy to panic and lose sight of your long-term financial goals.

However, you can turn a slowdown into an opportunity by rethinking your financial objectives -- and planning how to achieve them.

Three of the biggest and most common money challenges are buying a home, saving for your child's college education and investing for your retirement. Here are three road maps to success when saving for these goals.

1. Buying a home
Buying a home can be a richly rewarding or a devastatingly expensive experience. Savvy buyers do their homework.

First, know where you stand financially and how much you can afford to spend.

"You have to look at your overall financial situation. How much do you need to save for various goals, like retirement?" says Eric Tyson, co-author of "Home Buying for Dummies."

Map to success Proper planning can help you succeed when facing three of the most common money challenges.

3 big money challenges 1. Buying a home 2. Saving for college 3. Planning your retirement

Experts traditionally advise spending no more than 28 percent of your gross income on total home costs. That includes mortgage, property taxes and insurance.

Total debt expenditures, including home and other long-term debts, such as hefty credit card bills, student loans and car loans, shouldn't exceed 36 percent of your gross income.

Also, check your credit rating. These days, borrowers need credit scores of 720 to qualify for the cheapest mortgages, which come in a slew of options.

Typically, adjustable-rate mortgages, or ARMs, allow homeowners to have payments that are lower than those of a fixed-rate mortgage.

However, in recent months, the spread between ARMs and fixed-rate mortgages has narrowed, causing many people to sign up for fixed-rate mortgages, which offer the peace of mind of an unchanging payment.

"They're the overwhelming choice these days," says Keith Gumbinger, president of HSH Associates, which publishes mortgage data. "There's no benefit to choosing a product that adds additional risk to your transaction."

For help determining how much home you can afford, go to Bankrate's "How much house can you afford?" calculator.

With a budget in place, you can start hitting open houses. Look to the future as you go. Will your family grow in coming years? What are a community's trends? Is the crime rate getting worse or better? What about school quality?

Even if these factors aren't important to you now, they may be important to future buyers of your home. So do your homework -- call the police department, get test scores from the high school and so on.

When you choose an agent, word-of-mouth recommendations are helpful. But it's more important to pick a pro whose track record fits your lifestyle.

"If your friend was looking at $2 million houses and you're looking for a $300,000 town house, your friend's agent may not be the best person for you," Tyson says.