New here! Help me wrap my mind around this...

[MoneyMama]

Hi! I have enjoyed reading posts on here and I thought you great people can help me too!

Here is my situation:
DH and I moved across the country in 2007 with two kids and no debt at all and purchased a foreclosed doublewide on 2 1/2 acres for $70,000. It was in really rough shape, and our plan was to fix it up and sell it for profit. Well, that seems to still be the plan, although it's taken longer than planned. We paid for most of the reno's with cash, but still managed to accrue $5900 in cc debt in the process. I really want to get out of this house because, coming from the North, living in a manufactured home comes with a certain stigma. I would like for my clients to be able to come to me as this would save me hours of driving time a week. I need to meet with each client about 4 times, so this would be major to have an office to "host" them in. I just feel like I live in a "trailer in a field" and I really can't get past that. I am so incredibly embarrassed when people drop by. Ugh! The only problem with moving is, we'd have to literally double our mortgate debt load to get into a "real" home. Our home is now worth over 100k and probably would not be too hard to sell. I have no qualms with renting but my husband is dead set against it.

DH and I are both in our twenties and self employed so we have variable incomes. We have no college education.

We are also foster/adopt parents(of one...we have 3 bio kids). Our home has to maintain a certain amount of sq footage and rooms, though I would not mind going smaller than the 2600 sq ft we have now. I would love to have less land to care for and a garage to store things in(like the stroller that sits in the hall)

I know you all will ask, so here is our breakdown:
DH income: 0-11,000/mo with average being $4333 (over 50k annual)
Me income: 0-1500+ with average being $500
Tangent---my plan was to work when the kids got old enough for activities/ private school...that time is now! DH would rather me stay home with the kids, so this works for us now. My plan is to go to nursing school and become an RN during the day when all kids are in school(4 years from now). I may start school sooner in the evenings, but this will be paid as I go.
Foster care income: $600 (This in not really "income" but helps cover costs of gas for child's visits, food, clothing, etc. This month I have started putting this amount into savings, since we just went 8 months with too little coming in and had to use our emergency fund to get through)

Emergency fund: $1000
Extra Long term savings(goals): $900
This month we had extra income, so we were able to pay off three other credit cards and add the $1000 to our savings! Only three cc's left!
Debts:
$1500 cc 1
$2500 cc 2
$1900 cc 3
$13000 Truck(my husband's work vehicle) we also have van we paid cash for
$900 Hospital (this is 0% interest so I have been paying $20/month for 3 yrs now this will be the last thing I pay off)

BUDGET:
$743 Mortgage including taxes and ins.
$360 truck payment
$150 electric bill
$30 water
$30 garbage
$250 phones (both needed for our businesses-tax deductible!)
$33 internet (needed for my business)
$11 netflix(recently dropped cable)
$125 car insurance (great coverage, cheap rate!)
$600 groceries (includes household, toiletries, diapers for 2 kids, etc)
$100 DH lunches (only time of day he gets to sit down, only thing he spends $ on period)
$400 gas (we both commute a lot)
$30 life insurance for both
$65 ballet for two kids
$300 private school for one kid(alternative is homeschool, tried that, not happening again! Also, reason I am working in first place)
$330 cc payments
$20 hospital bill
TOTAL: $3557 (usually slightly lower)

Notice no spending money, this just comes from extra but we don't shop much.
Also notice no health insurance. It would be over $800 for 2 adults and 3 kids.(foster child gets free care) Our kids can't get state coverage and I have a surgery coming up for several thousand that I am just going to have to pay cash for.

I just really want to move! I feel like I've put in my dues in this place and now I want our "real" home. I know so many people have so much less, but I just don't want to live here anymore. Most of my clients are high end and I am sooo not trying to live beyond my means to "catch up" to them...I just want to be presentable to them...if that makes sense.

Oh, and at this rate, I hope to have the cc debt payed off by christmas with any extra monies.

[artwest]

It looks like you have a pretty good plan.

Here is what I would do if I were in your shoes.

First it appears that your average monthly income is $4,833 and your expenses are $3,557. Using those figures, I would go ahead and get health insurance. You may be able to find cheaper insurance than $800. I suggest you check out a site called gohealthinsurance. Using your $800 figure, you still have $476 per month left over. I would throw that at your debt. Anything over $4,833 per month I would save for when you have months with less than a $4,833 income.

I would also adjust the order of paying off debt. I would list them smallest to largest which means the hospital would be the first to be paid off. There are 2 reasons for this. First, when you pay something off quickly it is motivation to keep going. Second, the money that you were paying on that debt gets freed up to apply to the next smallest debt.

I am also curious about your husband's truck. Since he is using it for work, it does not have to be an expensive truck. It is going to be getting a lot of wear and tear so it just needs to be a sturdy, functional truck. Maybe he can trade down and lower the payments.

Finally, the extra $900 that you have in savings, I would roll into the E.F. until your debts are paid off. Then I would build the E.F. up to 3-6 months expenses and THEN start the long term savings goals.

[cschin4]

There seems to be part of the story missing. If you are self employed, who is paying for your health insurance? How can you afford to both be self employed without a reliable income or bennies? And, taking on foster kids as well.

[BuckyBadger]

A double wide trailer home is 2600 square feet? I never would have guessed...

[cschin4]

Other points: If your plan is to go to nursing school , then what does it matter what type of home office you have? Or if you really have a viable business that requires an office, rent some office space downtown. Most clients would rather come to a real office than somebody's home, especially with kids and so forth. I know that i feel more comfortable dealing with someone in a formal business setting rather than out of their home. So, if that is a business to pursue, i think that would be more valuable and less expensive than buying a home for that reason.

[maat55]

Personally, I would:

Sell the truck and replace it with a beater.
Downsize the cells(my wife and I share a plan for under 100).
Lower my insurances to liability with a 1k deductable(after truck was gone).
I pack a lunch myself.
Eliminate the ballet.
Eliminate the private school for public(Temporarily if possible).

The last thing you need to be considering is moving. I've lived in a mobile home and would again if necessary.

The reason you have cc debt is because you are over-estimating your income. You need to lower your expenses dramatically in order to payoff debt, then build a decent EF. You need to prioritze getting health ins, I would find an HDHP to cover major events and pay out of pocket for office calls.

IMO, you are confusing wants with needs. People got along just fine without cell phones, netflix, private schools, ballet lessons, eating out, cars over 5k and internet. I could also lower my food bill by at least 200 per month by buying cheaper staples.

I'm not suggesting you make this a lifestyle, but just a temporary solution to achieve your priorities.