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We Don’t Want to Move, Do We Have to? – Bill

“Dear Steve,

I make 75K a year working for a company, not sure how secure my job is at this point. It could go either way. My wife is self employed, makes about 46K a year. This is all before taxes.

Our house payment is 900 a month, taxes are 258 a month, and insurance is 100 a month. We have about 3000 dollars worth of credit cards that will be paid off in 4 months.
I put away 800 month in 401k, and my wife contributes 5K a year to a traditional savings IRA per year.

We are 55 and 52 respectively, trying to position ourselves for retirement.

Since my job is the big X factor, we decided to put our house up for sale, albeit reluctantly. That way we can buy another home with cash, and survive on my wife’s income.
Here is our dilemma: We REALLY love our home, the location, etc., it is perfect for us, and REALLY don’t want to move. Our gut feeling is that we should though. The best part is all the neighbors. They are family to us. Is there something we are missing, that could enable us to stay in our home, even if I lose my job? A note to add, we wouldn’t have any health insurance if I did. Also, the type of work I do is not found easily, and the job market here is awful.

Please help us figure something out. We feel so strongly about wanting to stay in this house…

Thank you so much

Bill”

Dear Bill,

I’m so glad you contacted me. Is there something that would allow you to stay in the home? Yes, it’s called savings.

Right now you are putting all your money away for retirement and maximizing those investments is a good thing to do, but not at the expense of not having a safety net.

Life is about more than dollars and cents, it’s also about the quality of life and what we do with our lives. We never know when our last day will be. And it sounds like the area you live provides you with an intangible value that is worth something in your life.

It sounds to me that your mortgage payment is not that outlandish but your concern is if you were to lose your job how you would be able to afford to stay in the house. Now imagine you’ve got $8,000 in savings just sitting there to protect you. That would give you a cushion that would allow you several months to regroup and find a new job if yours was lost wouldn’t it?

You might want to consider stopping the monthly 401(k) investment at this time and put the $800 a month in a savings account for a bit to give you that emergency fund. If you were able to build that up you might not have to sell your house and in a worse case situation you could then have a bit of cash available to help you make more drastic changes then.

If you were going to sell your house, with the job market what it is around you I’d suggest you move someplace else to give you a better chance of finding employment. I mean if the house is going to go to protect you then protect yourself by putting you two in a better spot to find jobs.

What do you think?

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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