How Establishing An Emergency Fund Could Help Manage Debts, Boost Saving

By George Erb
The Seattle Times

WWR Article Summary (tl;dr) This article takes a look at Seattle couple who are among the members of the millennial generation wrestling with such big-ticket items as costly housing and student loans before they have reached their peak earning years.

SEATTLE

Seattle’s soaring home prices drove renters Kathryn Jacoby and Jeff Whitehill to a sobering conclusion last summer: If they didn’t buy a house before prices rose higher, they could never afford to own a home in the city.

So the young couple lined up financing, raised a down payment and started house hunting. In July they bought a 72-year-old house for $550,000.

Then things got even more interesting.

Their monthly expenses now included a $2,478 mortgage bill. Jacoby wasn’t sure how to pay back a $30,000 loan from her parents for buying the house. And Whitehill’s repayments on his $60,000 student loan are expected to reset this year, jumping from about $100 a month to between $500 and $600.

“There were so many things to think about,” Jacoby said. “It was overwhelming.”

Jacoby and Whitehill are among the members of the millennial generation who are wrestling with such big-ticket items as costly housing and student loans before they have reached their peak earning years.

In the Seattle area, home prices have jumped 59 percent since 2012, when the market hit bottom during the housing bust.

Meanwhile, about 57 percent of Washington state’s college seniors graduated with student-loan debt in 2015, according to The Institute for College Access and Success. Their average student debt that year was $24,600. Graduate students typically accumulate even more debt.

Dana Twight, a Seattle financial planner who volunteered to help Jacoby and Whitehill, said the couple “have a common problem, a problem that many millennials have.”

“Young couples like them are between a rock and a hard place.”

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