The Daring Escape
This is where I found myself. There will be a longer post as to exactly how I found myself here, but for now let’s deal with how I got out.
Mortgage $280,000
Credit Card Debt $2,000.
Line of Credit (maxed out) $10,000
Rates (Property Taxes) $2,300
Orthodontist $2,850
Gardener previous house $1,500
Daughter $1,500
Taxes $8,500
TOTAL DEBT $308,650
TOTAL ASSETS $450,000 (House Only)
As I didn’t have enough employment, i.e. I was getting some income but did not have a full time job and could not get one for nearly 2 years, there was only one option in my mind – sell the house.
This took me a LONG time to get my head and heart around. As a generation X it was drummed into me from an early age that home ownership was the one most important thing in the world and I must keep the house at all costs, no matter what happens.
After I had children, I understood this ethos far more deeply. It felt imperative to always have a home, a haven, to raise my babies and make sure they felt secure. But a funny thing happened – the world changed.
During my lifetime I have seen property outstrip wages and capacity to earn by at least 11 times average earnings and there doesn’t seem to be any relief of note coming any time soon. As a general economic guideline, housing should cost 4 times average earnings and a brand new car one year of average earnings. But, it became impossible to own a home on a single wage unless you were earning well over $100K a year, which I’m not.
So I was left with the dire choice to sell or be sold by the bank which I could not bear happening as I would any equity I had. So I sold my house. I found a cheap rental close to the city and will be renting somewhere for the rest of my life. I did the maths and you can read about it in an upcoming post.
employment was still an issue – how was I going to pay the rent without a job? Glad you asked. I’m buying a business aka buying myself a job. But it’s not just any business. It’s a cafe / salad bar that is doing reasonably well but could be doing a lot better. I had been negotiating with the owner for months and finally was able to get it for a bargain basement price after he did the wrong thing by me and it blew up in his face.
So here is the plan now.
All debt paid – did you read that? All debt paid for the second only time in my life, the first being before I got into debt with a shiny new credit card, I am totally debt free. I also have an emergency fund of 3 months expenses. Never had one of those before.
With the income from the business, I plan to stash at least $2,000 plus a week into savings / investment with a view that in 5 years I will have my $1.25million to ‘retire’.
A lot can and probably will happen along the way and good thing I have this blog so I can tell you all about how my plan probably goes all Murphy, but at least, for the first time in a long, long time, I have a reasonable financial plan that will enable me to sustain myself and provide a future for my children. Even if I don’t make it, I’ve already won by being debt free. I am off that particular rat wheel and I am feeling relieved and grateful. Anything I do / save from here will be a step in the right direction towards my children’s future financial stability and that, in my mind, is a good thing.
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