Author Topic: Move or pay off debt first?  (Read 1712 times)

lackofstache

  • Bristles
  • ***
  • Posts: 313
Move or pay off debt first?
« on: August 19, 2013, 11:44:20 AM »
My wife & I have decided that to truly fulfill what we want out of life, we'll need to relocate. We currently live in Indianapolis, which is nice enough, but terribly sprawling for our lifestyle. I've commuted by bike daily for 2 years, prior to that at least 3 days a week (my second job at the time was delivering pizzas...by car). My current work is 9.5 miles away, our son will start school next year, which is 9 miles away. My wife works at a farm co-op three times a week about 2 miles from home & watches, educates & feeds our 2 children along w/ managing the homefront.

We have no CC debt, owe $7500 on our car, a used Mazda5 w/ low miles, about $10K in student loans and another $10K I erroneously borrowed from my brother on a failed business plan & $83K on our home.

We have $2K in my Roth, no 401(K), no HSA & about $4K in checking.

About 3 months ago, we got serious about paying down our debt and have cut our spending tremendously. We bring home about $50K in taxable income, spend about $2000/mo on food, insurance, luxuries, bills, etc. We are currently throwing $1.5K/ mo at our debt & building our liquid-ish emergency funds with excess ($500-1,000, depends as I am paid partly on commission).

My question is this: Does it make more sense to be out of debt (except for the mortgage, we'll probably rent this house as our area can easily get $850/mo rent while our mortgage is closer to $550/mo.) before we move; at our current rate about 17-20 months depending on changes or save extra for that same time period (our car will be paid off by that time regardless, as will my brother) and move when we're able to find jobs/make a living?

Thanks for all your advice in advance.

Best,
Eric

lackofstache

  • Bristles
  • ***
  • Posts: 313
Re: Move or pay off debt first?
« Reply #1 on: August 19, 2013, 12:00:36 PM »
I should've stated, where we'll be moving has comparable cost of living, is much easier to walk/bike around, has better public schools, etc. We have made the most of our cities free activites; libraries, velodrome, parks, etc., but I hate living in a city where my wife doesn't feel safe riding from our home to get downtown.

mustacheme

  • 5 O'Clock Shadow
  • *
  • Posts: 35
Re: Move or pay off debt first?
« Reply #2 on: August 27, 2013, 06:33:25 PM »
I think it would be a good idea to build up more of a cash cushion before moving. The things I'd try to save for would be the expenses of moving, expense of your new living situation (if renting 1st & last months rents etc; if buying then down payment and other purchase expenses), a few months of your house payment (in case it takes awhile to rent it out and/or in case you have vacancy between tenants later). Also, consider if you would be able to find similar or better jobs in your new location.

If you can't cover those expenses or if you'd have to take pay cuts in the new location, you might be better off to try to pay down the debt and stay where you are for awhile.

You didn't ask about your car really, but that's pretty extravagant for a mustachian ride.