Some of the best things in life are free. Others are really expensive. Like college, weddings, houses, cars and babies.
Life ain’t cheap. But when you start piling on interest payments, things can get downright unmanageable.
So in the spirit of “we feel you,” here are the five costliest pieces of paper you’ll ever own—and how to afford them without adding extra debt payments to your plate.
1. College Diploma
The graduating class of 2015 holds a new debt record with an average of $35,000 in private and federal loans per student. As for the rest of us? Nearly 1 in 10 Americans are still paying for their degrees (or their kids’ degrees). Yuck.
What to do about it: If you still have student debt, get rid of it ASAP with the debt snowball. Then encourage the teens in your life to work part time, apply in-state, and go for every scholarship they can find. Start with Dave Ramsey’s $55,000 Financial Literacy Challenge. High school seniors can enter for a chance to win one of three college scholarships, including one worth $40,000. That should cover most expenses at an in-state school for four years!
2. Marriage License
Weddings have become lavish affairs. In 2014, the national average price for a wedding was $31,200. And that doesn’t even include the honeymoon. According to the Real Weddings Survey, two-thirds of couples either went over budget or didn’t have a budget to begin with. Oops.
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What to do about it: If you or someone you know are planning a wedding anytime soon, take note! Make a budget and figure out who’s paying for what. Save up cash for the big day and stick to your budget at all costs. A big reception and fancy photos are nice, but they’re not worth starting your marriage in debt over.
3. Mortgage Papers
We love our houses. Maybe that’s why we’re willing to pay interest for 30 years for them! The average American household carries $168,600 in mortgage debt. Yes, your house may increase in value (unlike most other debts), but it can also put serious stress on your finances if you lose a job or suffer an unexpected medical event.
What to do about it: Before you buy a house, make sure your emergency fund is ready and waiting (make sure it equals three to six months’ worth of expenses). That way, a costly financial setback won’t jeopardize your family’s home. We also recommend a 15-year fixed rate mortgage—you pay way less in total interest that way.
4. Car Titles
The average auto loan in 2015 was roughly $28,500 for a new car, according to Experian Automotive. That’s about $483 out of your monthly take-home pay each month. Then you’ve got gas costs, repair bills, and tags and insurance too! Talk about a drag on your finances.
What to do about it: If you can pay off your car in less than two years, do it. The quicker the better. But if it’s going to take much longer, sell it and buy another (more affordable car) with the cash. For your next ride, save up before you buy. When you have cash in hand you also have the negotiating power that comes with it!
5. Birth Certificates
From haircuts to health care, the average cost of raising a child in the U.S. hovers around $245,000. Multiply that by two or three kids and you’re out half a million bucks or more. Oh, and these estimates don’t include the cost of college. Gulp.
What to do about it: Kids are a blessing—we think one of the best blessings out there in fact. But they need medical care, clothes, food, school supplies, etc. They don’t, however, need name-brand clothes or to go to the best private school in three states. Look for ways to lower your costs in the non-necessities, while you gladly pay for the items your kids actually need.
Life is expensive enough. That’s why we’re excited about Dave Ramsey’s $55,000 Financial Literacy Challenge, sponsored by Zander Insurance Group. The Challenge is open April 7–25. High school seniors can enter for a chance to win one of three college scholarships, including one worth $40,000! Underclassmen can enter for a chance to win one of three Chromebook 2 laptops. Have your high school student enter at daveramsey.com/challenge.