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Should I Move My Family To The Next Town Over? Financial Question...?

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Should I Move My Family To The Next Town Over? Financial Question...?

Postby Hillocke » Tue Sep 26, 2017 5:25 am

My husband and I, our 5 year old daughter and our large 70lb American Bulldog live in a house that I own with my business partner. It is EXTREMELY small. its about 600sq ft. total: 3 small bedrooms, one 3/4 bath with washer and dryer in the bathroom a small family room and a eat-in kitchen.


Living expenses:

$150/month "Rent" (Line of credit loan interest against the house, total line is about $28,000)

$350/month for sewer/water/electric (We have electric heat and live in Northern Minnesota, it is extremely expensive)

$75/month for home owner's insurance (Home was built in 1904 and is in great shape, newly remodeled, just very, very small.)

That puts us at about $575/month to live in the "Small House"

Personal financials: We net about $4550.00 per month and have quite a bit of debt we are working really hard on paying off and paying down. (Truck loan, personal loan, Misc credit card debt) Debts total about $26,000. We pay tons of extra on the credit cards, often 2, 3 even 4x the minimum and have not used them to purchase anything in excess of 8 months. Truck payment is $187 a month, and we have 2 personal loans, One for $11,000 and one for $7,000 payments are $275 and $300/month for those two. And we have 4 active credit cards on average we pay about $800-$1000 a month on them.


We are looking at moving to the next town over, 35 miles away. We live in a rural area and this city we are looking at moving to has a lot more to offer.


The home we are looking at renting is 4 bedrooms, 3 bathrooms with a full basement. Probably close to 3,000 square feet. Its a "rental" so there are a few cosmetic things I would talk to the landlord about, but I just can't decide if we should take it?

They want $990/month plus utilities. Utilities are estimated at $250/month for Gas, water, sewer and electric. Maybe $300.


I ran all over our income against what we pay now and what we would potentially pay to live in the large rental home. Living here in the "small house" would continue to allow us to make larger payments on our credit cards, increasing our income to debt ratio (We would like to buy in the future, but don't qualify for a large enough loan - only $68,750), staying put would also mean we wouldn't have to commute 35 miles each way for work. We both currently work less than a mile from home. We are just absolutely miserable in this tiny little place. There is no storage, only 2 closets in the whole house and one is taken half up by the water heater. My 5-year old says she hates it here because she can't even play in her room. (Her bedroom is 8x9 with a twin bed, a dresser, a water heater, another tall cabinet and some toys.) We actually had to put her toy box in the garage because you couldn't even walk in there with it in her room. We really can't have company over because there is no where to put anyone. I would love to be able to have my in-laws over for dinner, my family over for dinner, or BOTH! It would be nice if we could have little sleep overs with my daughters friends or nieces and nephews. We just cant do any of it in here. You literally have to walk sideways through half the house, Lol.


If we moved into a larger house, we could do all of the above mentioned, and more. After looking at the cost vs income it comes out that we would have $1200 left over each month for food, gas personal items etc., still being able to pay at least 2x the minimum on the credit cards. It would just be alot of driving for me. Out of the $1200, $400 would go to food and $450 would pay for my gas (My husbands company pays for 100% of his fuel costs) leaving $350/month left over for saving, fun, repairs etc. Is $350 cutting it too close? I've figured in every possible cent into this equation.


What are your thoughts? Would moving my family be a good step.


Post script: I own a cleaning business, and moving to the larger town would give me more potential clients and I would have a better area to advertise in as it is very touristy and has a lot of rich people that use housekeeping services.
Hillocke
 
Posts: 40
Joined: Sat Apr 05, 2014 3:36 am

Should I Move My Family To The Next Town Over? Financial Question...?

Postby Eliazar » Thu Sep 28, 2017 12:38 pm

I should add that my husband owns a manufacturing company and we get, um, freebies from it. Sometimes he fills up my car on the company account, we have done things over the weekend and used company money to do so, if we come into an unexpected expenditure, we've borrowd money from the company account. Yes, this is OK, he is the owner and his business is in good shape.
Eliazar
 
Posts: 52
Joined: Tue Jan 14, 2014 4:13 pm

Should I Move My Family To The Next Town Over? Financial Question...?

Postby Oskar » Sun Oct 01, 2017 8:30 am

How much money do you have left over from where you are now in comparison to the $350 at the other place? Personally, I'd be a little weird putting less than $350 just into savings per month (thinking about putting money back into a college account for your daughter, putting back money for both you and your husband's futures, etc.)

However, $350 is plenty for little "Oh, the microwave broke." repairs and you shouldn't be spending $350 on entertainment per month. Going out to dinner twice a month should only come to about $100 tops unless it's SUPER fancy, right? A trip to the movies for the three of you wouldn't be more than $30 WITH overpriced popcorn... That's three outings at $130 + a $70 microwave you found on craigslist and leaves you $150 for your savings account. Does that help with perspective?
Oskar
 
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Joined: Wed Jan 08, 2014 9:35 pm

Should I Move My Family To The Next Town Over? Financial Question...?

Postby Cicero » Wed Oct 04, 2017 4:34 am

That's great that your working really hard on paying off your debt. With that said I think you should try to stick it out in the place that your in. Your rent is extremely cheap and you can pay your debt off faster. That should be your number one goal.... just pay off the debt. Don't get a loan on furniture, that's one of the worst things you can do so don't ever do it. If you want new furniture and you don't have cash to pay for it there is always Craigslist or garage sales. I've furnished my entire apartment from goodwill and craigslist and being a young female professional I think it looks pretty dang good. I know your place is small so you've gotta come up with some creative storage ideas. Get the most out of your space. You can buy all kinds of things to do this like for your daughter: It's super easy and cheap to make a bunk-bed style bed with no bottom bunk. In stead of the bottom bunk you put her dresser and hang clothes or whatever you want so she can have more play space. Ikea makes these really cool closet style storage cabinets that are the size of the wall and take up like a foot of space. Hang stuff from the ceiling. Get rid of the stuff you don't use.... you know you've got some ; ). Just get creative with it. I think the financial peace you would have would be a lot better than the extra space you would get.

With that said $990 to rent a house is just ridiculous. I work in the mortgage department for a bank and if you saw what kind of house $990 would buy you your jaw would hit the floor. That's $990 your throwing down the toilet on rent. That's almost 1/4 of your entire income.

If I was you this is what I would do:

1. Pay off the debt like it's your mission in life.

2.KEEP out of debt.... don't finance anything else.

3. I might also look into refinancing that vehicle you have two loans on. Length of payments will go up but you can pay one collector and the minimum goes down.

3.Once your debt is payed off all the money you were putting towards debt needs to start going into a savings account. (This could be your down payment on a home) You qualify for a lot more home when you have cash in the bank to put down and good credit scores which yours should go up with the paying off of your debt. I don't know where you live but where I live $68, 000 will buy you a pretty nice home..... who are you trying to impress? And the monthly payments on that are between like $400-$600 depending on what kind of loan you have and the interest rate.

4. Don't forget to put away money for emergencies and retirement. A good rule of thumb is to have an emergency fund that you could live off of no problem for about 6 months. A comfortable retirement means that 12-17% of your income needs to be going into a 401k or IRA. And that's the recommended rate for your 20s. It increases as you get older(if you haven't already started)

5. Pay cash for everything but the house you want to buy.... you'll end up saving money. If you need a new car... save the money for it even if it's a brand new car. Think about it. If you walk into a dealership with $15,000 dollars and don't budge on what you want, it's going to be pretty hard for that dealer to let you walk away with that cash in your hand and your gonna get a really good deal on a car. Same on furniture and appliances... don't finance. Sit down and do the math and look at how much more you pay when you fiance something. My boyfriend bought a laptop at best buy on credit and I calculated after 10 years of the minimum payment he would have been able to buy 2.5 of the same laptop. Stupid right?

6. Invest your money.... buy stocks and mutual funds. Let your money work for you. But don't invest more than you can afford to lose... it is a gamble.


Hope this helps.
Cicero
 
Posts: 55
Joined: Wed Jan 15, 2014 12:12 am


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