Finance help needed!!! Major changes needed. Sell home???

[startover40]

Even running rough numbers my mortgage and tax would be decreased by about $3300 a month. That's significant! I don't disagree that there are a lot of areas where we can tighten our budget but nothing will immediately make a large impact like reducing our debt by $280K just in the home. Add in the less expensive utilities, etc and the move will make a huge difference in our debt and payments. I'd rather sell, wipe out the HELOC and CC debt and only have a mortgage to deal with. Not sure if the wife and I on onboard with a long drawn out plan to dig out of CC and HELOC debt. Even if we wiped out the CC and HELOC the mortgage would still be $5400/mo and taxes are 15k a year and only going up.

Dumping my jumbo loan at 5.75% and going to an attractive conventional at 4.3% would be nice too...

[Petunia 100]

Even running rough numbers my mortgage and tax would be decreased by about $3300 a month. That's significant! I don't disagree that there are a lot of areas where we can tighten our budget but nothing will immediately make a large impact like reducing our debt by $280K just in the home. Add in the less expensive utilities, etc and the move will make a huge difference in our debt and payments. I'd rather sell, wipe out the HELOC and CC debt and only have a mortgage to deal with. Not sure if the wife and I on onboard with a long drawn out plan to dig out of CC and HELOC debt. Even if we wiped out the CC and HELOC the mortgage would still be $5400/mo and taxes are 15k a year and only going up.

Dumping my jumbo loan at 5.75% and going to an attractive conventional at 4.3% would be nice too...

I like your plan to sell the house, Startover. A 5300 sq. ft. house has to be very expensive to maintain, heat/cool, etc. It's fine if you can afford it, but not if you have to struggle. It makes much more sense to buy a home one-third to one-half the size and have plenty of money to save, invest, and spend, IMO.

Best of luck to you, and please do keep us updated.

[startover40]

That's how I feel. If we shed every bit of debt, which would take a long and very dedicated time, the mortgage isn't a total killer. But I really don't think we are up for that and what helps us is we don't absolutely love this home/development and don't feel as if it's worth that much sacrifice. I'd rather downsize from this 5700sq/ft place and get into a more reasonable home and mortgage.

Now I know a lot of people here won't agree with what I am about to say, but here it comes. If we do move to this smaller, older, dated home there is no way we could live in it as is. We'd have to invest money into updating most of the home. I feel that when you look at the savings just in the mortgage, these upgrades seem much more reasonable.

[Petunia 100]

That's how I feel. If we shed every bit of debt, which would take a long and very dedicated time, the mortgage isn't a total killer. But I really don't think we are up for that and what helps us is we don't absolutely love this home/development and don't feel as if it's worth that much sacrifice. I'd rather downsize from this 5700sq/ft place and get into a more reasonable home and mortgage.

Now I know a lot of people here won't agree with what I am about to say, but here it comes. If we do move to this smaller, older, dated home there is no way we could live in it as is. We'd have to invest money into updating most of the home. I feel that when you look at the savings just in the mortgage, these upgrades seem much more reasonable.

Well, you do have to make this decision jointly with your wife. If she flatly refuses to consider the smaller home without putting some money into updates, then that is where you are and you have to work with it.

Perhaps you might try though to just find a different house to buy.

[startover40]

Still thinking things over. We've looked at the older, dated, smaller home several times and still have not made a decision. There is absolutely nothing out there in terms of inventory of homes in our price range.

I don't want to make a knee jerk reaction and move to this home if it truly makes everyone in my family miserable. Yet, this current home is killing us with the bills and our current consumer debt. i still see the only timely way to get on the right track is to sell this home and move to the older home and spent a bit of $$ renovating it.

[scfr]

Without the possibility of action, all knowledge comes to one labeled "File and Forget." - Ralph Ellison, The Invisible Man

In the time you have spent weighing the "move or not" question, I'll bet you could have easily come up with at least $10K just by trimming some of the fat from the budget.

I know you want to take some sort of "grand step" (like downsizing) that will have a big one-time impact on your bottom line, but while you wait to do that you are missing out on other opportunities. You will be amazed at the results if you & your wife focus on cutting back on expenditures. Some of the results you will see immediately, but for most you will need a little bit of patience. After a few months you will start to see a real difference in your financial situation and after a couple years you will just shake your head and ask yourself why you didn't do it earlier.

Where to start? These are my suggestions:

1) Auto & Home Insurance: Good for immediate results. Low-hanging budgetary fruit. Comparison shop. Look in to either switching providers, or staying with your current provider but changing your coverage, perhaps increasing your deductible a bit. If you decide to stay with your current provider but change coverage, ask them to mail a refund check to you. Throw the proceeds at the debt.

2) Back to School Shopping (because it's that time of year): Just say no! Trim the list back to the bare essentials. Scour your house for school supplies that you already have. (Why buy a box of crayons when you already have an extra one that you forgot about in the playroom cabinet?) Use last year's lunch box. Don't buy any clothes that aren't required (school uniform). I'm not talking about sending your kids off to school shoeless with clothes that are 3 sizes to small. I just bet that you already have plenty at home. If you absolutely must get clothes, check Freecycle or see about getting some hand-me-downs from a family member. Or just wait a bit until the shopping frenzy is over and the stores start to take more mark-downs.

3) Food: I'll go not very far out on a limb and guess that there is already enough food in the house to last for a good long time. Between what is in the fridge/freezer(s?)/pantry, how long could you live if you were suddenly cut off from the rest of the world? Take a look. You may be surprised. For a month or two, why not limit grocery shopping to once a week with a very limited budget? I'd suggest $40 for 4 people, per week. All you will need to buy is some stuff from the perimeter of the store: Dairy, eggs, some fresh fruit & veggies (focus on loss-leaders), maybe a bit of meat or seafood when the freezer stash runs out, perhaps bread. No beverages except milk & OJ. Stay away from the center aisles and don't even think about going near the deli! Don't think of this as punishment or torture. Make it a fun challenge to see what creative ways you can come up with to use up all of the food that is already in the house. There are a lot of dishes that lend themselves to "throwing in whatever you have around" (for example, fried rice). And there is absolutely nothing wrong with having modified breakfast-type foods for dinner (scrambled eggs, whole grain toast, and frozen veggies).

4. Winter Holidays: December is only 4 months away. Time to come up with a budget. Trim it back. Don't spend anything on decorations; use what you already have. You and your wife could agree not to exchange gifts with each other. If you usually buy gifts for your kids to give to you and your wife, choose practical things that you would buy anyway but that is still a "gifty" such as facial cleanser, lotion, coffee pods, etc. For the kids, talk it over with your wife and decide how much you could cut back without the kids feeling deprived. Remember those clothes that didn't buy for back-to-school? Give some as Christmas gifts if they will be needing more by December. Start checking the toys that are on the clearance rack. If you're not good at tracking expenses, make a "Holiday" cash envelope and use that to fund your holiday purchases. When it's gone, you're done, nothing more.

My wish for you and your wife and children is a happy, peaceful, secure financial future! You have the capacity to make that happen! Now stop burning daylight and do something!

[startover40]

I know the small things add up but there is no escaping the 625K balance on mortgage, 119K HELOC and 50K in CC (forgot about an extra 15K). The mortgage and HELOC are 5800/mo. Add in the CC debt and everything else and it all points to us living beyond our means. Hence my startover40, we need a start over that begins with selling this home and starting over in a smaller, less expensive home.