I started a post in the DIY section about the issues with my house and the next step for me is to figure out how to pay for it.
http://forum.mrmoneymustache.com/do-it-yourself-forum!/looking-for-advice-on-sheetrock-damagemold-remediation/Im still waiting to see what the insurance company is going to cover, but at this point Im assuming they will cover the damages. The permanent fix will be on me. And if Im going as far as has been recommended, then we are thinking about getting a construction loan and putting an addition on the house.
Quick background on where I was last September. (I DO expect a few face punches here)
- We have 25 years left on a 145k mortgage at 5.25% (We paid 165k for the house in 2010, had it appraised 2 years ago for around the same, Im assuming it still is)
- We owed around 12k in credit cards.
- We owed 12k on a clown car
- We lived pay check to pay check
- I sold my beloved '94 Honda Civic because it just started making less sense to put my 2 yr old int he back of a 2dr hatchback...and Im 6'6". We bought a '05 Outback and owed around $8k on it.
- We got heavy into changing our spending habits and started throwing everything we could at the credit cards.
- I started driving the Nissan Xterra that my wife had been driving. After realizing how bad the mpg really was (like...17mpg was a good tank of gas), I decided to trade it in. I got hosed on negative equity and some repairs it needed. Got a '08 Mazda3 and day one was way upside down.
- My christmas bonus went straight to credit cards.
- A large christmas gift from my grandmother went straight to the credit cards and....finally were credit card debt free.
- We did our taxes on 2/1, already got our federal return and most went straight towards the highest interest car payment. Rest into savings. Still waiting on State.
- 2 weeks ago I sold my race car for 14k.
Between the tax return and selling the car, we were set to pay off one car completely and within 2 months have the other paid off. That is the only reason I was okay getting into the car loans as I knew Id be able to sell the race car before spring time. I live in Maine where less than 5k gets you a rust bucket unless youre lucky. My Honda was the best <5k car Ive ever seen. The plan WAS to start splitting around 1k in surplus every month between Emergency Fund and 401k or mortgage (hadnt decided yet..). But then the house issue happened and the smoldering hair fire was not put out.
Current debt
- '05 Outback, $6200 @ 4.5%
- '08 Mazda3, $14500 @ 4%
- Mortgage, $145000 @ 5.25%
Once our state return comes in, we have roughly $4k in savings. And I have $14k in my other account from the car sale. We also have around 15k in credit limit available, some on 0% cards until next year.
So...I have some decisions to make as far as how to go about spending the money the most efficiently to get rid of the car loans and get the construction loan going. I do not have estimates and do not know how much insurance is going to cover.
My initial thought is to pay off the Outback just to get out of one of the payments. Then put some of the money towards the Mazda. If there is cash left over after getting through the house ordeal, we will put it straight towards the Mazda.
What would you do?