Dear Mary: We live in Nevada and have a second home in Arizona. My husband wants to sell Arizona property and then use the proceeds to pay off our credit debt, auto loan and home equity loan on Nevada property – about $ 165,000 in total.
I disagree. I think we should rent Arizona property to generate revenue and benefit from its future appreciation.
My husband is worried that if we can’t rent him, we won’t be able to handle two mortgage payments plus our other debts.
Dear Lorna: Say you sell Arizona property and pay off your debts, and then it seems you were right that you could easily rent the property and kill their esteemed.
Even if you forget about a return on investment, you are debt free, and have a home in Nevada.
But say you don’t sell, and it was understood he was right: You can’t rent the house, and you can’t keep up with both mortgages plus the huge burden of unsecured debt. In that case, you could lose everything. You have to see that as a real possibility.
My advice is to see this as an opportunity to show great respect for a husband through the confidence of his decision.
There is something about this for you too. This gives him the opportunity to meet your need for care and feel financially secure.
This looks like a win-win. Before doing anything, however, be sure to check with a tax professional to find out what taxable incident, if any, could trigger the sale of an Arizona property.
Dear Mary: I am a pilot of a major airline and have a $ 70,000 credit card debt plus a mortgage. I am not proud to say that we have no savings or emergency fund.
Soon, I’ll get wind of about $ 40,000. Should I use that to pay off the unsecured debt? – Stán
Tin: If you did that, you would still have $ 30,000 unsecured debt and a mortgage. Sounds much better, sure.
But what will happen next month, when you have an unexpected emergency, or next year, when you lose your job? You’ll feel like you have no choice but to run to the credit cards for relief, and before you know it, you’ll probably be back at $ 70,000, or more.
My advice is to use that wind money to fund your contingency fund, which is a pool of money equivalent to three months ’living costs (six best), known to many as an emergency fund.
Delete it in a savings account, where it can earn a certain amount of interest. Now survive as frugally as you can, and attack the $ 70,000 nut with all the gusto you can collect.
Put yourself on a strict spending diet. Knowing that you are not sitting on the edge of financial harm will give you the courage to endure a short – term sacrifice.
All you need is perseverance and determination.
Mary invites questions, comments and tips at EverydayCheapskate.com, “Ask Mary,” or c / o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740.