Important financial decisions many people make don’t necessarily revolve around stocks, bonds, or the markets. We’re talking instead about certain major life purchases that shape our financial future for years to come, things like buying a home, purchasing a vehicle, managing debt, and preparing for unexpected expenses. Our next guest is going to share how families can better prepare for the big life purchases. Mike Switzer interviews Gyles Laney Headley, a certified financial planner with Jeter Hrubala Wealth Strategies in Isle of Palms, SC.
TRANSCRIPT:
Switzer: Hello and welcome to the South Carolina Business Review. This is Mike Switzer. Important financial decisions many people make don't necessarily revolve around stocks, bonds, or the markets in general. We're talking instead about certain major life purchases that shape our financial future for years to come. Things like buying a home, purchasing a vehicle, managing debt, and preparing for unexpected expenses. Our next guest is going to share how families can better prepare for these big life purchases. Giles Laney Headley is a certified financial planner with Jeter Rubala Wealth Strategies. She joins us by phone now from her office in the Isle of Palms, South Carolina. Giles, welcome back to the program.
Headley: Thanks for having me.
Switzer: So let's go ahead and start with preparing for a big purchase.
Headley: Yeah. So financial planning for most people really begins long before they open an investment account. reality is that most people will actually make the most important financial decision when they think about things like homes, cars, education before making that large purchase. We often like to encourage people to think about what are they spending and what are they earning? And that may sound simple, but many people don't know what their monthly cash flow looks like. And if you're thinking to yourself, you have no idea what you spend, we'd encourage everyone, especially potential purchasers, to start tracking an estimate of what they think they spend in an average month, making sure to account for any of those annual expenses as well.
Switzer: Let's turn our attention to debt then. I'm sure just about every family has debt, and we can't really say that all debt is bad, right?
Headley: Yeah, not all debt is necessarily bad. really the biggest concern that we have is with high interest debt. So maybe that credit card balance that you're not necessarily paying off every month, and that's where things can get bad, is when you have that compound interest working against you. So even if you have a relatively small purchase, you know, you might end up paying hundreds of dollars because you're paying on that interest that's continued to accumulate. So when someone has multiple debts, we often encourage them to either try to pay the highest interest obligation or maybe even starting with the smallest balance to tackle that out of the way.
Switzer: Probably a home is the largest purchase a family will ever make. How should they prepare for that?
Headley: Yeah, a, home is really an emotional. In a financial decision, naturally people are focusing on the purchase price. That's really only one part of the story. You know, you have mortgage payments, taxes, insurance, maintenance, unexpected repairs. So often encouraging people to think about that total housing cost and whether that fits comfortably within your cash flow. Hopefully you've reviewed that recently and thinking about that rather than simply just purchasing a home for the maximum amount that a lender will offer. Just because you can borrow a certain amount doesn't necessarily mean that you should. Also thinking about credit scores as well. A strong credit score can save you tens or even hundreds of thousands of dollars over the life of the mortgage by helping you secure a, lower interest rate. Another consideration to think through is whether renting might be more appropriate for your timeline, your geographical location, and your overall situation.
Switzer: All right, now I know most people also know that they should have an emergency fund, but do they need to have that in place before considering any large purchase?
Headley: Yes, I think it's definitely essential. I mean, life has a way of presenting expenses we often don't see coming. The last thing you want to do is take on expensive debt or sell investments at the wrong time because you weren't prepared for that emergency. So with a home, we often see many people pouring every cent of their savings into that down payment. And they don't think about the closing costs, the new furniture, the moving costs, maybe the thing that breaks a few weeks into moving. so for many families, having three to six months of expenses set aside can really make all the difference during a difficult period.
Switzer: Well, Giles, we're almost out of time. Any final advice?
Headley: I think just slow down, consider all the factors, you know, making sure you understand your budget, your savings, thinking about the long term cost, thinking about what priorities matter to you, and really maintaining that emergency reserve. You know, financial planning, we like to say, is the balance of enjoying today and building security also for tomorrow.
Switzer: Giles, as always, great information. Thank you so much for sharing.
Headley: Thanks for having me, Giles.
Switzer: Laney Headley is a certified financial planner with Jeter Rubala Wealth Strategies. She joined us by phone from her office in Isle of Palms, South Carolina. Remember, you can hear this show again at Our webpage, South Carolina Public Radio.org just look for our show and you can find us wherever you find Podcasts with the South Carolina Business Review. This is Mike Switzer.
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