by Hope
The message I heard from your comments on my post about changing direction to focus on savings was – Not a good idea.
Sounds like staying the course to focus on paying off consumer debt should continue to be priority one. While balancing in some savings. What I’m doing now.
Then pivoting to saving over the student loan debt. Then returning to student loans.
Am I reading the room correctly in this?
Big Rock Priorities
- Pay off the remaining $8,600 in credit card debt
- Pay off the $2,600 personal loan
- Save a solid 6 months of daily living = $36,000
- Pay off student loans
Sit Still
I know that selling my house is not a good financial move. I know that.
And as commentors pointed out, it is definitely a decision driven my emotions. Versus smart and logical reasoning.
So for now, I’m going to sit on that decision for a bit longer. It’s still rolling around in my head. But the extended trip and staying with my daughter for a week during her surgery, definitely gave me a different perspective. And really, it’s not something I have to decide now or put a timeline on.
Even they wonder what I’ll do next.
Having some stability and figuring out why that’s so hard for me is probably a better priority now. I had a good, heart centered talk about just this with my daughter this weekend. Hearing her perspective was eye-opening.
Now I will go forth and devise plans to pay off debt. A plan that is achievable. And not a game. One that can be tracked and measured. That doesn’t rely on me earning extra money from side gigs or selling anything. A real, honest to goodness plan.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 3 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
This is a pretty good read of the room, though I would still pay the minimum payment on your student loans in case you’re incurring penalties.
One other thing I think I suggested a year or so back is to take a hard look at how you can reduce your monthly expenses. You want to strike a balance between austerity and exorbitant that feels comfortable, allows some travel (or other highly valued treat), savings, retirement and health insurance.
Please share the amount you currently have saved, including your investments, as this influences answers. However, I would not try to save $36K before paying off student loans. How long have you been dragging those along with you? It will be so freeing to have no debt. I’d aim for a middle ground savings and attack the debt like it insulted my child.
I love that “like it insulted my child” that is a very motivating statement. I’ll have to keep that in mind.
I’m not sure why you mentioned $8600 in credit card debt, as your last update had $5000 in credit card debt. Whatever the credit card debt is, yes, pay it off first, and then go in the order you specified with the rest of your steps- you are reading the room correctly for those steps. And I suggest staying put in the house. Why is your house payment $1000/month now instead of $600/month? That’s a huge difference. Perhaps you also need to refinance to a lower interest rate if you’re really paying that much? https://www.bankrate.com/mortgages/mortgage-calculator/
The additional CC debt was the cost of Princess oral surgery. I paid off a credit card and then used it immediately for the cost of the surgery.
YES! I’m so glad you listened – there is a lot of wisdom in these comments.
Here’s my advice:
1. stay put
2. pay off non-student loan debt
3. save $5,000 emergency fund
4. pay off student loans
5. save 6 month emergency fund
Then you can sell you house, move, be nomadic, fancy free – won’t that feel amazing!
You are right there is no rush on the house. But making the decision to sell the house or not should not be made on what little information you now have anyone. Some of the repairs or upgrades you’ve made may not be up to code and you should be taking this time to make sure there isn’t work to be done to even make it saleable.
I’d get a realtor or a contractor in there who is licensed to make sure. That floor scares me a bit as it looks like it was just laid on top of the original. You should have someone make sure that there aren’t things you could be doing to maximise the house.
Deciding to sell without even knowing what it’s realistically worth or what repairs need to be made is never a good idea. Numbers and facts sell a house, not how you are feeling about life at this one moment in time.
I’m confused by your $36,000 goal amount because with your debt paid off your monthly expenses shouldn’t be anywhere near $6,000/mo. You can share whatever details you want but you continue to dodge the same questions over and over – how much do you already have saved? Why did your mortgage increase so much? etc etc
Im confused on the CC debt too. I thought you were using the card and immediately paying it off (for surgery) and why use it if you can just pay cash and likely get a discount? I am also interested the house payment increase (and what the interest rate is). Glad you are taking some diffferent steps than you initially mentioned.
You should see how Steph handles her budget. She does “forecasting” based on concrete numbers and adjusts throughout the month. She’s also very clearheaded and consistent. I recommend it: https://www.sixfiguresunder.com/oct-budget/