Buy new home or pay off debt?

[bananastand]

Hey everyone!

I am coming out of a VERY antimustachian young adulthood and paying for it.  Long story short, my partner and I bought a house in 2006 with no money down and now the cost of living here eats up my take-home pay.  Add in student loan debt, some credit cards, a car that we're still paying for, and some Little 'Staches...and we're lucky when all the bills get paid on time.  Getting ahead?  A foreign concept.

But I'm a regular reader, so I'm no complainy pants I've found a much cheaper town where I'd like to relocate.  Salaries are on par with what we make now, but housing is a great deal cheaper--and the public schools are excellent!  Right now foreclosures are going for $30k-$100k.  Since our smallest just finished daycare, we're finally in the black again.  We could easily put down 20% or more on a foreclosed property in our new town.  We've been watching the market in our current neighborhood and even though our house lost value at our last assessment, we live in an "up and coming" neighborhood near several graduate schools and it's probable that we'd break even on a sale. 

But.  Our debt is an emergency.  So would it be wiser to stay up here for another year and pay off the debt faster or is it better to dump the big expensive lifestyle ASAP? Am I looking at this situation through rose-colored glasses?

For those who like numbers, here are ours:

CURRENT BIG CITY:
My take home [after family health & dental]: $2616
Partner's take home [after IRA]: $2484
Total take home pay: $5100
 
Mortgage: $1698
Security system and phone line: $45
Home insurance: $180
Utilities: $175
Partner's car: paid off
My car: $165
Kids' school expenses [uniforms, supplies, activity fees]: $100
After school program/childcare on holidays: $150
Gas: $100
Tolls: $100
Groceries: $400
Cell phones: $70
Student loans: $655
Credit cards: $300
Total expenses: $3963
+975 to put toward debt, savings, etc.


NEW SMALL TOWN:
My take home [after family health & dental]: $2616
Partner's take home: $0 [for the first few months, until the kids get settled.  Then partner would start a design business or work part time or both.]
Total take home pay: $2616

Mortgage: $400
Security system and phone line: $0 [town has low crime]
Home insurance: $100 [insurance goes down because of low crime]
Utilities: $175 [estimate, based on Google fu for the area]
Partner's car: paid off
My car: $0 [I'd sell it.  The town is small and bikable, and if partner stays home, I don't need to pick up kids]
Kids' school expenses [uniforms, supplies, activity fees]: $20 [I'm estimating.  There are no uniforms in this system, which make up the bulk of our expense.  $20/shirt and $50/gym outfit!]
Afterschool/childcare: $0
Gas: $50 [This goes down if I'm not driving]
Tolls: $0
Groceries: $400
Cell phones: $70
Student loans: $655
Credit cards: $300
Total expenses: $2170
+446 to put toward debt, savings, etc.

[arebelspy]

we're lucky when all the bills get paid on time.  Getting ahead?  A foreign concept.

Gosh, the advice I was given about money and bananastands was flat out wrong!

Welcome to the forums!  :)

[impaire]

we're lucky when all the bills get paid on time.  Getting ahead?  A foreign concept.

Gosh, the advice I was given about money and bananastands was flat out wrong!

Welcome to the forums!  :)

Beat me to it!

Now the question: why does your partner have to stop working if you move?

[SunshineGirl]

What's your total debt?

[bananastand]

I love that everybody gets the banana stand reference!

Now the question: why does your partner have to stop working if you move?

Part-time work isn't exactly plentiful and one of the downsides of the small town is that while there's a lot of seasonal opportunities, the job market is otherwise limited.  Partner has spent 10 years in newsrooms (with intermittent layoffs throughout).  It's not impossible to find work, but I don't want to write income into a hypothetical budget that won't materialize. [My skills are more diverse and transferable to a number of industries.  I'm confident I can find similar work at the same salary or greater.] 

Plus, childcare.  We've been using it to try to get ahead in our careers and it's put a strain on everyone.  One thing that seems apparent from these forums is that there are varying levels of badassity, but once you bring kids into the mix, you're way too late for the most effective practices.  I'd rather pare down while the kids are young so that one of us can be around more and provide more stability (and fewer crazy-long days in before-care/school/after-care--my kids "work" longer hours than I do!), even if it means paying the debt off more slowly.  Of course, as I'm typing this out, it seems stupid not to plan on partner taking on at least seasonal work--four months out of the year won't kill anyone, and would make a big dent in debt.

What's your total debt?

Credit cards (3 total): $12,295
My car: $8,650
Loans: I'm on IBR and I work in public service, so my loans are capped at $655/month for 120 payments and then the balance is forgiven.
Partner's loans: $13,672

It was mortifying to type that out.  But rest assured, the credit cards are in the freezer and we're on a strict budget now. 

[daverobev]

Can you sell your house and live in a rental for less? Might be worth doing that. You could potentially do the crazy - buy the new house after selling the old one, but rent it out if it cashflows, but stay in the big city renting for less than you currently spend... so doing a double-whammy.

[impaire]

Did I hear newsroom? Sounds to me like the perfect type of job to negotiate a distance-working agreement, and/or build some freelance income. Of course, to have a better idea of how that would work out, I would start on testing the freelance waters before any kind of other move...

Plus any money made during the "test run" of the freelance income could go straight to debt, no matter what the final decision is :)