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Californians Learning How to Succeed in Personal Fiances

A Couple's Plan to Keep Everyone Happy


Having six people living in a two-bedroom house has left Wayne and Mona Skinner with just one big wish: a room of their own.

The Los Angeles couple share one bedroom with their two children while Mona's parents live in the other. It wasn't an issue when the Skinners bought the house six years ago, but the quarters are claustrophobic now that their older child is 12.

"We need to buy a house where we can all fit," said Mona, 30, with a characteristic bright smile. "When the kids are out of the house, we can go back to something smaller. But until then, we need three bedrooms."

The catch: Although Mona, a shipping clerk, and Wayne, a pressman, can afford a bigger house, they also want to move closer to Mona's job. They're looking at houses in Lakewood and Downey, but Mona's parents, John and Carol Cota, don't want to leave their downtown Los Angeles neighborhood, where they have lived all their lives. Complicating matters is that the Cotas aren't working.

After years as a roofer, John Cota was recently felled by a disability. His union has been providing a small stipend to keep him going, but it's a far cry from a living wage. The Cotas, who are less than 20 years older than Mona, don't have retirement savings either. Their living arrangements are by necessity rather than choice.

That makes Wayne and Mona liverwurst in the growing "sandwich generation," said Percy E. Bolton, a Pasadena-based financial planner who reviewed the Skinners' situation for The Times. How can the Skinners, who earn $40,000 to $50,000 annually, provide for their own retirement and personal goals when they're taking care of both children and helping support Mona's parents?

"In order to do a financial plan on the Skinners, you have to do it on the in-laws--or at least get enough information to know how much they [the Skinners] may have to subsidize in the future," Bolton said. "Some families actually include their parents in their annual budget."

Families that don't have sandwich generation issues may think that this is a simple problem and might suggest that the Skinners put their needs and the needs of their young children first. But it's not that simple.

Mona's parents were also a sandwich generation--they had moved into the current family home first, to help Mona's grandparents when they had trouble making ends meet.

When Mona's grandmother put the two-bedroom house up for sale, the Cotas couldn't afford to buy it at the $80,000 asking price. That's when the Skinners stepped in, knowing that the Cotas came with the house.

In the ensuing six years, there have been many advantages to cohabiting, including built-in baby-sitting and the warmth of a close-knit family, the Skinners say. Additionally, because they were such young parents--Mona gave birth to their son, Matthew, when she was barely out of high school--she also needed lots of help and advice from her mother, Carol, who gave birth to Mona when she was just 18.

"My parents help us a great deal," Mona said. "I'd be lost without my mother."

The good news is that with a little luck, this couple can make it all work, largely because they've been thrifty throughout their marriage.

Most importantly, they are already well on the way to breaking the chain of dependency on the younger generations in their family. At this point, their only debt boils down to a $73,000 home mortgage; an $18,000 car loan; and about $700 in credit card bills, which will soon be paid off. Meanwhile, they've got between $50,000 and $65,000 in equity in their home, emergency savings of about $9,000 and retirement savings of roughly $36,000.

But meeting everybody's short-term needs will be tricky.

Their future hinges on the house. Their home, a modest stucco bungalow wedged among several apartment complexes, has a one-bedroom guest house in the back that Wayne and Mona rent out for $500 a month. If they can get city approval, they believe they can make everyone happy by splitting their lot in two. They'll sell the two-bedroom home in front and keep the one-bedroom guest house in the back. The Cotas could live in the guest house rent-free, at least until they get back on their feet.

Meanwhile, Mona and Wayne could take the profit from the sale of the two-bedroom bungalow and reinvest in a bigger house.

The couple have researched the market and believe that their house could sell for between $135,000 and $150,000. That would allow them to pay off their current $73,000 mortgage and reinvest between $50,000 and $65,000 in a new home, after commissions and costs.

The houses that the Skinners like in Lakewood and Downey are pricey--$200,000 and higher--given their budget. However, Bolton believes they can handle mortgage payments of up to $1,500 a month as long as Mona goes back to full-time work.

But Wayne, 33, who is the more cautious of the two, is uncomfortable with taking on a lot of debt. He knows they can make $1,500 payments when he works a lot of overtime, but he can't count on that.

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