Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
OP, why don't you consolidate your debts into a HELOC or similar, if it's less than 4% after tax? (Note that it is tax-deductible.) Your other loans aren't; and student loan probably isn't, based on your total income.
HELOC payments may be lower, and/or more uniform.
Also, say you maintain separate loans as they are now. After 2-3 years the car and brace payments will fall off and you can breathe a little easier.
Hey I'd trade with you if I could (esp the "31 YO" part) - sounds like a fun life, with little kids and a boat. Why fix what ain't broken?
We have been in our house for 1 1/2 years. We wouldn't be able to sell anything until we hit the 2 year mark anyways to avoid capital gains. While I agree that owning the depreciating assets while still owing on our home isn't ideal, I also think in this situation it depends on your point of view. If we were to look at our house as a 2 year investment where we simply made 200k for living in it for 2 years, which then pays for the things we bought. Then really is it silly? The argument can definitely be made that you could have taken that 200k and invested it, saved it, etc... I'm not too proud to say that my way might not be the correct way. It really just depends on lifestyle and what you want for your family and in life. We wanted a boat to enjoy with our kids, I wanted a dependable and capable truck for work and for play with some bells and whistles, My wife wanted straight teeth to correct her bite, etc. Everyone has different priorities and goals, and I feel if you're intelligent then you continue to monitor your situation and try to educate yourself constantly so you can improve. I feel that a forum like this is a good way to pool multiple ideas, viewpoints, and opinions so I appreciate all the advice given
You make 200k but then buy another property in which it too all things considered should have appreciated over the same time period so why not cash out refinance instead?
Toys are great and it's wonderful you can buy them. But the best toys are paid for toys. I would get rid of the boat, car, and truck. Forget the boat for now and buy 2 decent used vehicles you can pay cash for. Your insurance will go down too.
Babies and boats are not a great thing. After the kids are old enough to have been through drownproofing and had swimming lessons is the time to buy a boat. When you take babies boating, the person watching the kids is having no fun at all because they have to be watched every nano second. Kids drown in kiddie wading pools 6 inches deep. Believe me they can get in much worse trouble in a big lake. Plan to buy another boat when the kids are 5 or 6 years old, and pay cash for it.
And no more spending till all that's left is the mortgage, insurance, and utilities. Here's why. The economy is very uncertain. I hope both of you keep your jobs and continue to do well but what would happen if your job just ended next month? They decide to send the work to India or something. If you are relatively debt free, you would have some breathing room and time to find something else. Bad things can and do happen to good people all the time. Lower monthly expenses and more dollars saved and invested can save you. I know these things for sure because it happened to me. I went from low 6 figures to less than 30K per year. No one can guarantee it won't happen to them. But you can prepare for bad times and if they never come, you can retire early or do other things.
Huge car payments are just like throwing money away. It's a losing investment plus you have to pay a lot more insurance too. And it's all about transportation. A dependable used car will get you where you need to go for a lot less money. You get to pocket that money and laugh all the way to the bank. Put your money in things that will become more valuable over time. Not vehicles that will be worth practically nothing in a few years.
$1300 a month for food is a bit excessive. Do you shop at Whole Paycheck? It's for 2 adults and 1 child, right? Work on this one after those other things are under control. And where's the health insurance? Employer paid? Have you ever checked to see what it would cost you per month to replace it? Just in case?
This is my philosophy and it served me well. Learning how to stretch your money and still live well is a good skill to have.
Sell and buy usually totals about 10% of value in closing costs. So that is $60k you are going to spend right there, not to mention moving costs to move twice. So you are going to rack up $60k in unneeded expenses just to pay down debt that you aren't over your head in.
Seems like stepping over dollars to pick up pennies, to me.
I'd sell the boat and rent one when you want to use it. The old saying that "the 2 happiest days in a boat owner's life are the day he buys it and the day he sells it" is an old saying for a reason.
I'd then take a hard look at your budget and figure out where you can cut back so that you can accumulate more savings and not have to go into future debt. You literally owe more on your vehicles than my mortgage was when I bought my house in 2003, and your car payments are quite a bit more than my total house expenses (mortgage, taxes, insurance, maintenance, utilities, everything). If you don't own the boat, you don't need a $70k truck, which I'm going to guess is also a gas hog. My dad buys $70k trucks, but he puts 300,000 miles on them in just a few years as a builder, property manager and real estate agent. So he needs a pickup for his career, not to pull a financed boat. So I'd sell the boat and the truck, and buy something more reasonable. My advice on the car is keep it, but drive it as long as possible.
Where do you live that groceries for 3 people are $1300/month? My husband and I only spend about $400, and that is including all household goods, not just food. There has to be some waste there.
With the income you listed, and the expenses you can't easily change, you should still be having easily $4000 left over for saving/investing each month.
That's what hits our bank account every month. Minimal deductions besides 401k, medical/dental/vision is $250/month. Plus on top of that we even owe taxes to the tune of a couple thousand every April.
Why don't you take the almost $4k you have left over every month and start paying down your debt? You say your jobs are safe but you (and most other people) are one serious illness or accident away from financial trouble.
Also, the three of you spend $1,300/month on groceries? That seems outrageous. There are 3 in our family and we spend approximately $500/month on groceries and household items.
You don't need to sell your house. You need to rein in your spending.
OP, are you upside down on the boat and the truck, and if so, by how much? Also why is your grocery budget so outrageously high? You perhaps should sell the boat and the truck instead of the house. The 70k truck can be replaced by a 20k truck, reducing your debt by 50k. The boat should go (unless you live on it more than you live in the house, in which case sell the house.)
If you are upside down on the boat and/or truck, cut your grocery budget from $1300 to $400 and throw the difference at the negative equity in the boat or the truck, until you can sell it and break even. Then throw all the extra money at the other negative equity if applicable to pay it down and get it sold. You do not need such enormous financed depreciating goods in your life. They are (evidently) crushing you. Get rid of 'em.
OP, are you upside down on the boat and the truck, and if so, by how much? Also why is your grocery budget so outrageously high? You perhaps should sell the boat and the truck instead of the house. The 70k truck can be replaced by a 20k truck, reducing your debt by 50k. The boat should go (unless you live on it more than you live in the house, in which case sell the house.)
Not sure if that includes dining out, because mine is more than that if you include dining out. We dined out 25 times per Month.
Neither me and my wife like cooking, and we cook so bad, no one wants to eat it. So we let the professionals do it for us.
Not sure if that includes dining out, because mine is more than that if you include dining out. We dined out 25 times per Month.
Neither me and my wife like cooking, and we cook so bad, no one wants to eat it. So we let the professionals do it for us.
If you can afford it that's fine but to say as adults you both cook so bad no one wants to eat it really means you are too lazy to actually try. It's not overly complicated and the internet is readily available as a guide
Our child care situation now is pretty good. My wife works 3 days a week and I work 48 straight hours so we usually are able to arrange our schedules pretty well to not have to shell out a ton for child care. We are close to her parents and my grandparents as well which always helps. We have a great nanny we use when we need help with a babysitter who is a family friend, and our sons day care is right up the road from us. As far as child care goes we are fairly well covered. I agree tat affordability is not equal to being able to make monthly payments.
I should also clarify that we don't feel we "need" to sell our home to afford the situation we are in, we were just having a deeper hypothetical conversation about how we "could" sell our home and eliminate all of our debt, and then start fresh with another home of equal value--mortgage being the same on the new house. Thousands of $$ saved on Interest payed on each of those loans as well as being less likely to finance things due to the fact that we would have so much left over after our mortgage was paid each month. Our plan has been to chunk our debt down and max out on our savings and will continue to do so. There is just something gratifying about know we "could" sell our house and eliminate all of our current debt in a short time vs. over many years. There will always be new expenses, voluntary or not.
A penny saved is a penny earned. The easiest way to save money (and therefore compounding interest) is to not buy the stuff in the first place. Now you seem to be planning somewhat drastic measures on something that should never have even occurred. If you're so stressed by your current debt, why did you get into it? With a child and another on the way?
Also, you said that you have "$3924 approximate left at the end of each month for entertainment, dining out, projects, etc" - meaning your very large food bill does NOT include eating out. I know you think you deserve to enjoy yourself as you have large salaries...but you also have a LOT of kid help you're paying for that should give you more time to cook for yourselves. And, you don't need to shop at Whole Foods (how else would you spend $1,300 on food). I think you've gone a little crazy with the recent raises you've gotten and are succeeding at rapidly adopting the lifestyle you THINK you have to have. This will cost you hundreds of thousands of dollars over the years.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
