The Debt Fog Will Clear
Based on my last post about our debt, “Runaway Budget“, and some friendly advice from some reddit users over at r/DaveRamsey I believe we have a good way ahead. The fog will not clear quickly but we recognize it; we know what caused the fog and we know how to blow it all away. Even if it looks like “ghost” Mufasa in the sky; that debt has got to go. Feel free to criticize our proposed plan here; really we’re looking for valuable and viable feedback!
- Sell the truck ASAP (2k) for *just in case for baby*
- Pause Baby Step 2 and pay the bare minimums on everything until baby arrives home safe and sound (Projected early January)
- Trade my paid off car(5-6k) in for decent van 6k-8k value, take on no debt
- I drive the wife’s Nissan for another month or two to save and facilitate #2+#3
- Sell Nissan, use money all money saved (not including bs1) to pay off difference
- Buy, outright, a 4-6k honda/toyota as my work vehicle
- Continue with Baby Step 2 with 14k less debt (Roughly 82k – 14k = 68k left)
Extra planned stuff:
The entire time while Baby Step 2 is on hold (while paying minimums) I’ll be attempting to increase any side hustle I can, selling whatever I can, and saving wherever I can to hit Baby Step 2 after the baby/holiday/vehicle dust clears.
I believe we can worry about selling the rental AFTER all this and apply all of the profits to Baby Step 2.
We may be taking on slight risk with the housing market as it seems likely to be in a bubble but:
- We owe 35k ish
- It’s currently worth around 55-75k
- I can’t imagine the market destroying us on that
- We have active and good tenants
- Even if we didn’t have tenants, we could carry the mortgage (400 a month)