Wednesday, July 13, 2011

Starting From Scratch

No, we are not selling, although we did very seriously contemplate it.
Back at the time I posted about my shopping challenge I decided I could no longer ignore the fact that we were spending more money than we were bringing in.  Credit cards had become our reliance when we didn't quite have enough to buy something (or pay for such and such bill) and they just began to grow out of control.  Trust me, I'm glad we had them when we needed them, but I will gladly take scissors to them.  The point was we couldn't continue the way we were going - we already were digging our hole deeper each month without paying much more than the minimum balances.  Something had to change.
Hubby and I decided that one option - which also seemed the easiest - was to sell our house, pay out all outstanding debts and buy another (lesser) house we could pay off in 10-15 years and build a "rainy day" savings fund in the process.
We decided that we should get our house appraised by a local real estate agent and look around for a "renovators delight" that we could buy cheap, do a fair bit of work on it ourselves and fix-er-up.  We were satisfied with the price they advised, but to make it worthwhile selling we would have to buy back in at a much lower rate to account for all the costs involved in selling and buying houses.  We looked through about 8 houses in a period of 2 weeks and decided that the ones in our target price range (the cheapest of $270,000 to about $320,000) all had so much work to do on them we could easily spend another $100,000 and be back where we started.  Don't get me started on the house we saw that had a dead rat on the patio and a dead cockroach in the meals area, or the house that had a squeaky floor like you wouldn't believe - you could not take a step anywhere without a huge creak, which meant goodness knows what was wrong with it under the flooring.
In the mean time we spoke to the "olds" (parents) and they tried to talk us into a way to stay put - even offering to help us out financially (which, of course, is the equivalent of selling your soul to the devil).  Everyone else that we told thought we were mad wanting to swap a 3 year old home for one 30 - 50 years old that could potentially be a money-sucking monster of it's own.  I still had the reasoning in the back of my mind "you can't eat a house; it's just a roof over your head" - trying to talk up the idea.
After our fruitless search we decided that we should talk to our bank and see if we could refinance to annihilate the credit card monster, and at the same time fix our interest rate for the next 3 years - let's be honest, who expects things to get cheaper?  So, after our negotiations we have signed up and are staying put for another 3 years at least.
Hopefully Friday we will be taking scissors to the credit monsters cards and closing the accounts, so we will be starting with a clean slate so to speak.  We have drafted both a yearly and monthly budget and intend to stick to it, meaning we will still be creating that "rainy day" savings fund too.  I have been, and intend to, stick as closely as possible to my grocery challenge - I have been averaging about $130/week for food for our family of 4.
It truly is a weight off our minds.
Oh, and there is still a lot to be done around the house and I will post our progress as it happens.

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