I disagree. I think we should rent the Arizona property to generate income and benefit from its future appreciation. My husband is concerned that if we are unable to rent it out, we will not be able to handle two mortgage payments plus our other debts as well.
What should we do? —Lorna
But let’s say you don’t sell, and it turns out he was right: You can’t rent the house, and you can’t keep up with both mortgages plus the big load of unsecured debt. In that case, you could lose everything. You have to see that as a real possibility.
My advice is to see this as an opportunity to show your husband a great deal of respect by trusting his decision. There’s something in this for you, too. This gives him the opportunity to meet your need to be taken care of and to feel financially secure.
This looks like a win-win. However, before you do anything, be sure to check with a tax professional to learn what taxable event, if any, selling the Arizona property might trigger.
Soon, I will get a windfall of about $40,000. Should I use that to pay down the unsecured debt? —Stan
But what happens next month, when you have an unexpected emergency, or next year, when you lose your job? You‘ll feel you have no choice but to run to the credit cards for a bailout, and before you know it, you’ll be back at $70,000, or probably more.
My advice is to use that windfall to fund your contingency fund, which is a pool of money equal to three months’ (six is better) living expenses, known by many as an emergency fund.
Sock it away in a savings account, where it can earn some amount of interest. Now live as frugally as you can, and attack that $70,000 nut with all the gusto you can muster.
Put yourself on a strict spending diet. Just knowing you are not sitting on the edge of financial doom will give you the courage to endure short-term sacrifice.
All you need now is persistence and determination.
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