Jan 30, 2010

To Sell or Not to Sell: Other options...

In my last post, I talked about our debt load and how we were considering selling our house in order to free of the "slavery" that being in debt feel like. I know we're not alone in this. So many circumstances can contribute to excess debt that can take YEARS of our lives to get rid of. We've lived with this debt for several years already and we're ready to make a violent, drastic move to get out of it!

So, what are our options? In order to get out of (and stay out of) debt, we need a plan. We were NEVER in debt until our mid-30s. We always paid our credit cards off each month. We bought used everything and paid cash. I was the coupon queen when it came to groceries.

We KNOW how to live within our means.

The problem is that our means aren’t enough to cover what we've accrued and the cloud hanging over us is quite stressful. I know many of you know exactly what I mean about that cloud. So, what to do? Here are the thoughts we’ve come up with:

  • Be more frugal and buy nothing that isn’t needed. (We haven’t gotten down to the bare minimum yet, but we’re moving in that direction.)
  • Pay cash for everything so as not to add to the credit card load. (We’ve been doing that since May. I LOVE paying cash!)
  • Husband could take on a third job. (Here is where it starts to get sticky. He already works 55 hours a week on his paint contracting business. As a part-time pastor, he spends 20+ hours a week in church related time, 6 hours go to the commute, and then there’s always that pesky need for sleep…)
  • I could get a paying job. (I homeschool full-time and do the books for my husband’s business. Neither brings in income, of course. If I were to work, then my husband would need to be home to take care of Son. I would have to find something that I could do FROM home in order for this option to be remotely feasible.)
  • We can sell everything (except Son) to gather up the greatest amount of funds as possible. (That would possibly result in about 25% of the amount we owe. Definitely what I'm getting ready to do. And I thought my yard sale last spring was my last . . .)


  • We can sell our house which will pay all debt and leave approximately a $30,000 profit.

In my next post I will attempt to compare and make SURE that selling the house would make sense.


The Glamorous Housewife said...

Question: Have you tried to get a loan on your home equity? Rates are at an all time low, however it is also much harder to qualify. But it might be worth a shot. Maybe you could get an equity loan and then pay off your credit cards.

Question: How many credit cards do you have? What are the rates on them?

One way to pay off debt is to pay the minimum on all the cards EXCEPT the one with the least amount owed. You pay as much as possible every month until that card is paid off. Then you move to the next card. DO NOT cancel the card, just leave a zero balance on it.

The best thing about the above is the feeling you get by seeing a big dent in one card every month and then checking off that card when you pay it off. It is a psychological win.

Question: Have you looked into how much you could rent your house for? Would it be worth it to rent your house out while you rent a lower priced apartment or move in with family? That is a way to make money off your home without having to sell.

These are just a few ideas. I will try to think of some more.

Thanks doll,
The Glamorous Housewife

weenie_elise said...

i don't know about in the US... but if your husband could be paid as a contractor... then you can be paid as his subcontractor, which would spread the income load and be more beneficial tax wise.

Roxanne said...

Q1: We checked on that. The loan % would be higher than our current credit card debt % which is 0% and 4%.

Q2: We've consolidated all the CCs down to just two with the above rates. We originally had 7 cards with rates from 9% to 16%. That was a relief to get them to a low rate!

RE: Not cancelling the zero cards. We've been wondering about that. We currently have about 10 cards that are zeroed out. WHY is it better not to cancel them?

Q3: Renting the house out. We've LIGHTLY discussed that one, but your bringing it up will spark us to revisit that option. Thank you!

Bring on the ideas!!

Roxanne said...

Weenie--Another brilliant idea! We discussed that years ago and I can't even remember WHY we decided against it. I bet it had something to do with me whining about more paperwork LOL!

We will definitely look into that as a way to improve our financial situation.

Thank you!

Keep the ideas coming, please!

The Glamorous Housewife said...

The reason you shouldn't cancel credit cards is because for some reason it dings your credit! Isn't that stupid! But true.

Well, it sounds to me like you may have a lot of cc debt, but to have such low payments is excellent.

I was also thinking maybe you could moonlight as a tutor? You already home school your child, maybe someone else needs some help?

Also, because you are home, maybe you could be a babysitter/nanny for a younger child? You could earn some cash that way, and working moms are always looking for a good person to watch their kids. My only concern here would be liability.

I will keep thinking.

Thanks doll,
The Glamorous Housewife

The Glamorous Housewife said...

Sorry, I just remembered something: if you get an equity loan the interest can be written off your taxes. This *might* help with your tax bracket, and *might* end up being lower, even though the rate is higher.

Also, have you factored in the fact you wont be able to write off your mortgage anymore?


Roxanne said...

Glam--That IS ridiculous about the canceling of CCs, isn't it?

Tutoring would be a possibility, but I am NOT up for taking care of kids. My son is lucky I take care of him (JUST kidding!)

It's really tricky to compare all the little details with the tax stuff. We're going to have to really lay everything out and carefully comb through all the "what ifs" and the hidden costs and benefits.

My brain hurts just thinking about it now!

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