My wonderful wife completed her Masters last May and by seer grace managed to score an excellent position as an intel analyst. But she while doing this she racked up 174K worth of student loan debt.
Scoring her job was a last minute deal for us, and we moved from Va Beach to Saint Petersburg, FL. And while the area seems too flat and is missing mountains for my taste, the housing market here is prime. I've looked at so many houses that seem for the first time in my life realistically own-able. The problem is, rents are going up here. To purchase would significantly reduce our cost of living compared to continuing to rent.
And that's my biggest dilemma. We have no debts outside of that student loan. It's sitting at 6% interest. And the math just gives me a headache every time I run numbers. If we acted antimustachian, we'd have it paid off by the time she is 51 years of age. Oh and we would have made Sally Mae over 200K richer. No thanks.
Currently, our month to month is $2,400 in expenses and there isn't much left to shave off. I was debt free when we got married and I spent the first two years helping bring my wife onboard with my concept of minimalism and the debt free lifestyle. We worked together to pay off 8K of her credit card debts and now this is the last debt we are facing.
My wife earns 80K and we automatically save 15% of every paycheck she makes. My income isn't as steady. In 2010 I made 60K but last year was a disaster for my business. I'm hoping to turn that around this year, so far off to a good start, and hoping I can hit my business goal of 5K every month.
I feel like a lot is riding on me right now. If I can hit my goals and stay on it then I feel more confident in our ability to just throw everything at her student loan.
But I guess my question is, should we keep leasing, or would it be in our best interest to take $20,000 and put it down on an 80K home if we can get a rate under 5%?
Right now our rent is $1200, and unless we want to live to far away from her commute or in a one bedroom apartment we can't really find cheaper in this area that meets our needs. But owning could reduce this cost significally.
Allowing us to focus on her student loan.
We're comfortable with our lifestyle, we're pretty frugal. And thanks to this blog, I am will be selling my Audi to a young man this Friday. I just bought a bike to start riding (I work from home) and we're going to sell my wife's TB and roll ourselves into a more fuel efficient smaller car. And just have one car.
Advice? Thoughts?
Keep renting or buy?