I’m now simply at indebtedmom.com (and having some issues moving followers and such). Hope you’ll join me there for my new posts 🙂
We can’t afford our house.
Perhaps on paper we can, but even then, just barely. We bought this house just nine short months ago, with less than a 20% downpayment and it should have been obvious to us then, with a new baby on the way, that we were biting off more than we could comfortably chew.
But correcting the mistake of buying a house is not an easy one. If we were to walk away now, we would likely have to bring money to the table at closing. But not walking away means a giant chunk of our budget is non-negotiable and we are barely making ends meet, much less paying off debt.
Which is an interesting position to place yourself in when what you really want to do is stay home. This house is standing in the way of our life.
Our Own Stupidity
We made a lot of missteps buying a house when we moved here about two years ago:
- First, we shouldn’t have bought a house here until we were sure we wanted to stay for at least three more years. I won’t go into the reasons here, but we have industry-related issues that could force a move as early as next year.
- We ended up buying a house 30 minutes from work, church, pediatrician, and gymnastics class (the class is funded by grandparents, so don’t roll your eyes at me). We couldn’t afford any houses closer – a giant red flag about the general cost of living here. So instead we traded a too-expensive mortgage for a manageable mortgage, plus extra gas and vehicle maintenance. I’m thinking we didn’t come out ahead.
- We were keeping up with the Joneses. We moved everything from our stuffed 2700 sq ft house in Texas and put it in a 1700 sq ft town home when we got here. We were tripping over each other, furniture, and dogs. We did not sell anything. Nope. Not one thing. We needed it all for a future house.
What Would Dave Do?
After our recent budgeting exercise had us so tight on vehicle maintenance, medical care, and groceries, I got nervous. I found a forum of Dave Ramsey believers and submitted my budget for review. You know what they said? They told me we needed to make more money.
Seems kinda crazy telling people whose combined income is well over six figures, but these folks couldn’t find too many areas to shave, considering we write four-figure student loan payments each month.
Due to the nature of our professions, we don’t have other viable employers in this area. If we want to make more money, that means we have to move or take on second jobs. We work 40 hours a week minimum, so with a long commute and small children, second jobs are hard to fit in.
Two Steps Forward and One Step Back
Let’s say a new job opportunity presented itself to my husband. And let’s say it didn’t pay relocation, but the salary offered was good enough to entice us to move. We’d lose money on the sale of the house. We’d lose money moving. But isn’t it still the right call?
I think the answer is yes.
We are not ready to sell the house today, but I thought undoing our mistake might still be the best call. And then we could be prepared to quickly move if we needed to or wanted to. And what if we sold our house now for a fair price? We’d end up renting where we started out, which was across the street from our daycare and 5 minutes from work. Time is money. And location is money, especially with rising gas prices.
With that plan in mind, my husband and I decided to list our house on Zillow.com as a “Make Me Move”. “Make me move” is a premarket listing on Zillow, which some owners use it to see if their listing price is fair and some are using it to post a house that might need a few things before being placed on the actual market. The process is simple – it only took me about 15 minutes to do a thorough listing.
With the house (sort of) listed, we have a few things to start tackling. We want to be prepared for moving back into a 1700 sq ft place with an extra body (after all, we’ve had a baby since leaving the townhomes).
- We need to downsize. We have two couches, for example. And two washers and dryers. Craigslist, get ready!!!
- We need to minimize. We have too. Much. Stuff. My daughter has a playroom filled to the brim with toys. I have clothes in three closets (to be fair, one closet is maternity clothes, which I am still in, and the others contain various sizes I hope to one day be. Again.) I think I have something like 6 cake pans, which is a lot for someone who rarely makes a cake. Yard sale and consignment shops, here we come!
Anything we net from Craiglist and the yard sale will be set aside to help us bridge the gap at closing. If we get lucky and don’t have to bring money to closing, we’ll roll this money back into our debt.
What about you – have you ever had to lose money to put yourself in a better financial position?
All I want to say is: sure am glad that I have the extra money I posted about yesterday. Details to come soon…
But it brings me back to the me vs. Dave Ramsey thoughts (and I’m not really against Dave – I have serious respect for him and his teachings). If I was following Dave’s baby steps, I’d be out some cash that I might need in order to make a more serious investment toward paying off our debt. But I’m not following his baby steps (although the 10 stones aren’t all that different) because I think my personal situation and comfort level don’t really jive with them.
But if Dave works for you – great! I am glad you have found an approach that you can dedicate yourself to. I have, too! And we can still support each other in our efforts and not pass judgement on who is doing things right or who is doing things wrong. (I’d say personal finance has no right or wrong, but I think if you are reading this blog you totally know that there is a wrong.)
While we are at it, let me confide in you that I am contemplating not doing a debt snowball of the smallest loans to the biggest because you end up paying more in interest. But I ran the numbers and attacking the highest interest rate loan first (with little snowball) only saves me a few months in repayment, so that hardly seems worth it. What is worth it: a combination. Clearing out a few of our tiny student loans, using them as the snowball, and then attacking highest interest rate to lowest. My quick estimates say that could save us over a year on our repayment. We will be running the numbers again as we approach this possibility because of the variable interest rates that our loans have.
The other consideration is keeping momentum. We have 12 loans, so I want to set us up to be able to pay off about three loans a year. We may want to hop back and forth between small balances and high interest rates in order to keep our momentum going.
Some of you are going, oh geez, I don’t want to run numbers once, much less multiple times a year. But as a rocket scientist (really), running numbers isn’t intimidating and I think it’s actually sort of fun. I know. I’m a glutton for punishment.
Seriously, though. We are in debt with over 100k in student loans after 10 years of repayment. So I think momentum is important, but so is finding the way that works quickest. And if that means I have to adjust course here or there, rather than just sticking to some solid advice because it’s easy and clean cut – that’s the way I want to go.
There are tons of people who offer really solid plans for getting out of debt, it’s not so much about who’s (solid) advice you follow. It’s about just starting. Just picking a direction and heading down it as fast as you can. And while we are at it – some folks are going to run breakneck speed down that path and some are going to crawl. That’s fine, too. Just keep moving!
What about you? Are you a Dave Ramsey believer? Or have you found your own path out of debt?
One week ago, I wrote that it was our goal to have a Murphy Fund by the end of the month. Guess what? We have a Murphy Fund. That means we have completed the second of ten steps in Steve Digg’s No Debt! No Sweat!
We actually have just a bit more than is required for our Murphy Fund. Now here’s where it gets difficult for us. The extra should go straight toward debt. But. (There’s always a but.)
A while back I wrote how crushed I was that a certain opportunity didn’t come through. It was an opportunity to move close to family. An opportunity to be home. And possibly, for me to stay home. Although I wrote that it didn’t come through, to date we’ve received no official notification to that effect. In the online system, his application still shows as “under review”. I’m fairly certain that the month that has passed between the final interview and, well, now is a bad sign. but I can’t seem to let go of it. The whole family had such high hopes and we were all praying night and day. It seemed so perfect.
So, remember – the opportunity didn’t pay relocation. We would have needed to fund our move somehow. And here I’ve come up with this small pot of money…
Part of me says this opportunity just might come through. That I should save the money and be thankful that God has provided.
And then. Then there’s the thought that I’m being tested. That the moment I turn loose of the extra funds and actually get busy paying down our debt, we will have the most awesome opportunity laid at our feet. That I need to show my faith.
The last thing I want to do is rush into a decision. Financial decisions have not been a strong point (hellooooo! Blog!). Sometimes the wisest thing we can do is wait (and pray!) So that’s what we will do for now. Nothing but pray. At some point, that position will be filled. And if it’s filled by my husband, we are going to end up with some extra cash on hand to help us move. If it’s filled by someone else, we are going to end up with cash to start paying down our debt. Either way, it’s exciting to me 🙂
How have you quieted your impulsive tendencies with money?
You can find me on Twitter now @indebtedmom 🙂
Awhile back I asked if anybody had ideas – besides a garage sale – for making money. We have plenty to sell and we intend to hold a garage sale later on, but as a full-time working breastfeeding mom with a baby who doesn’t sleep through the night (gasp), I’m fresh out of energy to organize a garage sale.
I’m not the only one looking for some ideas, so I consulted the expert. You know, Google. Because if I had original ideas about making money I wouldn’t be writing a blog about debt. I found a few ideas repeated over and over but what follows is a list of things I would possibly try (no direct sales – #notasalesperson) and things that have the potential to allow a mom to be with her kiddos (no call center jobs). Because I’m not afraid of a little controversy, I’ve even included a couple of rarely mentioned ideas that might not sit well with everyone. But let’s still be friends, k?
Baby steps – easy ideas, but generally low or limited return:
- Appraise Collectibles. Anything from jewelry to china to weird, old hand-me-down kitsch could bring in more money than you might expect. We just found a very old quarter in my daughter’s piggy bank that might be worth over $100. Look everywhere!
- Sell your old cell phone. This is one we’ve been discussing for awhile, as we’ve had several iPhone upgrades. Our old phones are just lying around, but there is a market for them!
- Sell plasma. I have a friend that sells plasma about once a week. It’s a 90 minute commitment that he does while his daughter is at dance class and he gets about $40.
- Use apps. Do a little research on apps that pay you for something you might already be doing or buying anyway. I used Ibota before – didn’t like it. Now I’m trying out ReceiptHog and hubby’s going to use Gigwalk during lunch breaks. The list of apps paying is seemingly endless. Here’s a starter list.
- Rewards programs. Rewards programs are not just for credit cards, although, if you have a credit card that’s an option. Upromise.com allows you to shop your favorite online and local merchants and save money for college. No, it doesn’t add up fast, but every little bit counts, especially when you were going to spend the money anyway.
Preschooler steps: ideas that require more effort, but earn a little more
- Flipping cast-off items. One lady in a forum told me she was on track to make $100 this month from scrap metal finds like grills, set out as trash. We drove by three sets of couches last Saturday and the thought did occur to me that I could take them and possibly sell them. Good friends of ours in Texas were notorious for finding their (cute!) furniture on the side of the road, so not everything being thrown away is really “trash”. Some people frequent garage sales and antique sales for the purpose of reselling the items at a mark-up. You can apparently become a millionaire!
- Surveys. Each survey takes a bit of time and the money made is not awesome, but the important thing is that money can be made! Check out sites like swagbucks.com or through Money Savings Mom (which I did to weekend).
- Clinical research. Note that you might have to make some adjustments to you life to comply with the terms of the research.
- Launch a craft business. I’ve seriously thought about taking up jewelry making and selling my items. I just don’t know if I’d even like it, so I hate to waste money on that unknown, but if you are already doing something and enjoying it – think about how you could market it. I know a knitter who has made quite the business for herself!
Teenage steps: takes quite a bit of time, but potential to make a living
- Monetize your blog. Hmmm. I might have to do this. I am already switching to WordPress.org soon because I want to post a widget with a debt ticker, so I’m moving the right direction. Even just $50 a month would make a difference in when our loans get paid off…
- Sell your photos. My husband is a decent photographer. It’s one of his hobbies and he posts his work to Facebook. From that alone, he’s sold prints of his work and been hired by folks to take engagement and family photos. So there’s that, but stock photo sites are always paying for photos if every day items, like forks or diapers.
- Babysitting. Be honest with yourself. If you don’t have the patience or desire, then do not do this. Especially full time. When we first moved to this area, none of the daycares had openings, so we hired a sitter. She was young and wanted to stay home with her newborn, so it seemed like a win-win, but she was in over her head with our energetic toddler and quit in three weeks, leaving us in turmoil.
- Pet sitting. Again, gotta be a pet lover to do this, but also take precautions. One lady in Tennessee was dog sitting for a friend when the dog attacked the sitter’s toddler.
- Micro task. I recently heard about sites like fiverr.com and taskrabbitt.com, which is only available in a few larger US cities. Then then I ran across Amazon’s Mechanical Turk site which seems promising. One reviewer says you can possibly make minimum wage at it, but it’s really best for work to fill in some time. Elance.com also offers small time commitment opportunities.
- Teach a class. If you can play piano, teach piano lessons. If you are a photographer, offer basic photography lessons. I was so in love with the natural birth class I took, I got certified as an instructor (and have stupidly let that certification slip).
Adult steps: actual job ideas that offer flexibility
- Virtual jobs. I’ve registered for flexjobs.com – you have to pay for this service, but you can locate a flexible, work from home opportunity that aligns with your talents. Virtual assistants are becoming quite the “thing” lately; I keep seeing successful bloggers who employ one. Also: Leapforce hires folks to work from home and some Elance.com opportunities are long term.
- House cleaning business. I’ve read about women who take their children along when they clean houses with the approval of the client. Face it, your children have to be of a certain age to make this work out. And you have to clean.
- Franchises. I’m a runner and am totally gaga over the fitness / nutrition industry. I was pointed to a low startup franchise in that field and have really wanted to do it, but current franchise owners tell me it’s like a full-time gig and it doesn’t make money immediately. Ideas like this are best if you have the investment capital and are just looking for extra income – not working full time and not trying to survive.
- Paper route. I’ve seriously considered this one! Papers have to be delivered early, so, depending on your family’s schedule, it’s possible to get back before the kids are up and your spouse heads out the door.
Crazy Aunt: takes a special person and might offend some people
- Selling Breastmilk. Some moms pay up to $4 an ounce for breastmilk pumped by a mom on a special diet that jives with their child’s tummy. It’s more common to be paid about $1 an ounce, so the mark-up for a child that already has some problems seems like price gouging to me. Also know that some moms donate huge amounts of milk after weaning – not everyone would be on board with your decision to earn money this way.
- Surrogate mom. I really, truly liked being pregnant. I didn’t find it hard or uncomfortable and both my labors were unmedicated and still pain-free. I could be pregnant 30 times, but I’m no Michelle Duggar; I think I can only raise two kiddos. Surrogates are paid several thousand dollars during their pregnancy, but you’d have lots to consider before under taking something so life-altering and emotional. And not everyone would feel comfortable charging for this. This is altogether a very personal decision, and don’t forget how hubby and kiddos could be affected, too. This article addresses how much money can be made.
One note on selling plasma, breastmilk, and renting out your womb: the people on the other side are in need. A medical need, maybe very tragic. On top of that, these people are quite possibly fretting about money more than you are. At the same time, over and over I read blogs and forums advising – with contempt, in some cases – for people to sell clothes and furniture and toys to make headway on debt. So, as long as you are consistent in your outrage, comment away 🙂
I have no idea why you are reading this post today (you might be asking yourself that, too ;-)). Maybe it was just something to read. Maybe you are short a little cash each month or need a little extra to be able to do something fun. Or maybe you are like me – motivated to stay home with your kiddos and/or pay off some debt. Please examine your motivations and don’t deceive yourself that you needy ideas to provide when, deep down, you are working to seek wealth and comforts. (Prov 23:4). Because it’s much better to seek a God first, to make Him a priority. Allow Him to be your treasure and you just might be surprised at how that changes the view of your finances.
Have you tried any of these ideas with any success? What ideas are you most likely to try?