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Money Make-Overs : Putting our personal finances in order is something most of us vow to do--about once a year. To help three households fulfill their New Year's resolutions, The Times put them together with area financial planners, who recommended fresh courses of action for 1994. : Couple Sees Path to Home Ownership


NEWPORT BEACH — Erin and Chris Futterer are 20-somethings who know what they want--to be homeowners. One hitch? The down payment.

With combined incomes approaching $85,000 a year, the two salespeople hope to trade their $1,160-a-month Newport Beach apartment for a $200,000, three-bedroom house in South Orange County. That, they figure, will require at least $27,000 for a down payment and closing costs.

"We want the tax write-off, and we want to know our money is going to something we own, not to just some Irvine Co.," said Erin Futterer, a 24-year-old UC Irvine drama graduate. "First, we get the house, then we get the kids. I want that white picket fence."

Their dream of such a well-ordered life would seem certain to be realized, given their income, but the young couple faces the roadblocks of meager savings and debt.

With about $3,000 saved and $3,500 in stocks, they have a way to go to get that down payment.

Fortunately for the Futterers, they are not too concerned about being able to maintain a high income, though they live mainly on commissions that can vary from year to year. They each earn about $7,500 a month, from which they take home about $5,700.

Unfortunately, both said, they learned "zero" in college about money management.

Chris is a manufacturers' representative selling office supplies and furniture at Byram Tri-West Associates in Commerce. Erin sells forms, marketing materials and other printed products throughout Orange County for Versyss Inc., a Boston firm.

Donald Chou, a certified financial planner in San Juan Capistrano who recently met with the couple, said their jobs are among the toughest for good fiscal management because their income depends so much on commissions.

Still, Chou said he was confident that the pair could be shopping for a house in two years, based on their current cash flow.

"I think they are highly motivated, unlike other couples their age," said Chou. "They have a higher income for their age, and an average amount of debt. The key for them is to control their debt."

The Futterers owe about $1,500 on their credit cards and another $3,800 on personal loans that they took out to pay for their wedding last Feb. 20. In addition, they are making payments on an $8,000 loan for a 1991 Mazda and on a $15,000 note on a 1992 Honda Accord.

After paying the bills and rent, the two usually have about $1,400 in discretionary income each month.

Chou advised the couple to put at least $1,000 of that into a limited-term municipal bond fund. That way, they should have enough for a down payment in about two years. Erin said she hoped to have the money in about eight months.

Chou also advised them to eliminate their credit card debt right away and to pay off the personal loans as soon as possible.

"They have good income and good instincts," he said. "Considering the fact they just got married, they're actually in pretty good shape. I was impressed."

Chou said a "definite plus" for the couple is that neither has any outstanding student loans. Chris, 26, said his parents paid for his education at UC Santa Barbara. Erin's parents paid for most of her schooling at UCI and she recently repaid a small loan from her sorority.

Chou cited other smart fiscal moves. The couple paid cash for their Christmas gifts and prepaid a $1,400 skiing trip to Taos, N.M.

According to Chou, the Futterers need to begin thinking about retirement, not just housing. He suggested that Chris set up a Keogh plan--tax-deferred pension savings for people who are self-employed--and that Erin keep on contributing to her company's 401(k) pension plan.

"They need to set up a balance between how quickly you want to get into a house and the advantages of putting away money early for retirement," Chou said.

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