Dealing with alternative courses of action in your financial plans

For those who asked, Diane is still here with us; she just took a small detour along the Road of Life to reconnect with those important to her … under such a situation, personal finances can wait a tad

But, Diane is weighing up lots of options, primarily geared to – I think – sensible steps to paying off her debt. What do you think?

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Adrian wrote:

1. What, if anything you will change in relation to your current financial situation?

2. How / when you intend to go about it?

3. What results you are hoping to achieve?

4. What (if anything) you intend to do about your current debt?

BTW: if you are planning to increase/decrease your current debt via a debt snowball, avalanche, bazooka, cash cascade, all, none, or I don’t know … this would be a GREAT place to discuss it.

5. What questions that you may have (if any), in relation to how you are (or should be) handling: (a) MM101, (b) questions above, (c) comments on last posts?

Basically I need to bring in enough income to satisfy my costs.  That means getting a job with a retirement or a good salary, and most likely in the local area.  (There are some exceptions, as always.)  So, I am working on some connections, jobs in one or more of my career fields, as well as working on zumba and writing – from a business perspective.  I’ve also considered strongly setting up a business for making pillows and quilts – two things I do – and selling them commercially.  I don’t feel that starting any of these as a business are LIKELY to help me reach my number in my time frame, unless somehow I write the next Harry Potter and “get found” but I will go with the odds on this one.  So, find a job.

I have not yet decided which debt I am going to pay down first;  I use the method of best return on the investment, but I have also to deal with real options and how to value those.  Should I pay off my 2nd mortgage which balloons in 7 years or pay off a credit card?  Currently the card is at zero percent and the mortgage is at 8 percent.  Hmmm.  I can roll over the card to another one, but that will cost 3 percent, plus whatever rate I find (I have finally received one for zero, with a 1-year time limit, like this one was).  Still, better than 8 percent and gives me a year to find a J.O.B.  if i don’t find one soon.  It also makes the rent on the house close to covering my mortgage.  Ahhhh, another avenue to pursue.

I have applied to refinance my mortgages with my mortgage company (the main one anyway) to see if they would be willing to consolidate the two loans and lower my rate.  Given that if something doesn’t break for me by June that I am likely to go into foreclosure, it would seem in their best interests to buy off the other mortgage for me and put me into something lower on both of them so that I can continue owning the house and they won’t have to sell it.  I can keep paying them for it, that is.   Here is  good example of where marriage is a financial decision.   Without a job, I lower my fiance’s (husband then) ability to get a good rate, and he raises mine (much like that commercial on t.v. where they are living in her parents’ basement).   If I get a job this summer, then there is no blip on the credit, only in the working (which is perfectly acceptable to me, given the circumstances).

The mortgage companies probably need more employees right now but probably aren’t hiring (who has time to train?) due to the refinancing going on across the country.  I may need to call someone personally to speed this up for me.  My fiance is also refinancing his house but not thru his company, so he’s getting calls from fly-by-night companies (or so they seem to me).

If this seems muddy to you, it’s not.  It’s just full of options, if/then statements, and the like.  Having a steady income eliminates a lot of those.  Then it will be:  pay off the debt, including the 2nd mortgage as much as necessary to refinance to the lowest I can get, and re-evaluating whether to transfer some of the CC debt to another card and pay the remainder off during the next 12 months.  As different information becomes available, more paths are opened or shut.

Once debt is paid off and income is acceptable, then it is a step back to evaluating how the other businesses are going and whether they should be infused with time/effort/money, left as-is, or stopped.  Constantly revisiting what is working and what is not working is good;  it does not mean that something should be changed right away.  Sometimes waiting and seeing is the best answer, too.

Photo credit: hubpages.com

Debt Free!

(except the over half a million dollar mortgage!)

Ryan, Dave Ramsey would NOT be happy … he would want you to pay that l’il ol’ mortgage off. But, what do you want to do? What do our readers think you SHOULD do?

I would also like to know more about the mortgage (interest rate; fixed/variable; etc.) …

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A short time ago I was deep in debt, and constantly stressed and worried about it. I wasn’t (and my wife definitely wasn’t either!) going to live like that anymore. So I took action to aggressively pay down all my debt and find a job that paid significantly more than I was making at the time.

Since that time (about five years ago) I have paid off all of my debt (including student loans, credit cards, and cars totaling around $60,000) except our house.

Granted the mortgage on our house is $665,000 and our home is worth around $600,000, so technically that puts us about $65,000 in the hole. We don’t, however, plan on selling anytime soon, so that loss is not yet (and hopefully won’t ever be) realized.