Tuesday, January 20, 2009

The Inauguration wasn’t the only change…

I don’t want to bore you with the lack of progress I’ve made against my debt by doing an update – basically, everything has just been stored up in my checking account as we prepare to move on to the next stage of our life.

The pregnancy has a good chunk of change stored away for it, and, hopefully, the extra I’m saving up won’t be needed.  If it is, then that’s what the fund is for.  I don’t know that I’ve ever had as much cash in the bank as I have right now.  I’m not counting very much towards my emergency fund until after the baby is born, just in case the money is needed.  Once the baby is born and all the essentials are taken care of, then I’ll probably move the money to a MMA or something to separate it from my everyday finances.

Our lease is ending on February 28th.  This makes our second year at these apartments, which isn’t a bad deal, but there are several problems that keep recurring that aren’t taken care of, even though we’ve mentioned the problems.  So we are moving.  The question was:  where?  I decided that if my wife is pregnant, we might as well go for a bigger place while we are at it.  Upgrading the apartment size and quality was the least I felt we should do.  Spending more money per month on rent, while slowing our debt progress, is definitely doable, especially considering the amount of progress we have made.  Budgeting the amount for a nicer, larger apartment put us about even with a decent house payment.  This led me, once again, down the path of buying a house.  Sure, we’d end up spending a little more each month, but it would be ours.

So that’s what we’ve decided.  We are buying a house.  The house has been located, and the interest rate has been locked (5.25%).

I understand that buying a house while in debt is unacceptable to most PF bloggers, but I also feel that there was more to the equation than simply finances.  It was time to begin thinking a little further into the future, and not be so focused on the present that I end up aggressively paying down debt vs. doing what I feel is best for my family.  Don’t get me wrong – a majority of the time, the aggressiveness I’ve shown in paying down debt has been the best thing for our family.  I just feel that the priorities have shifted a bit with the pregnancy, and I’m adjusting our lives to re-align around those priorities.

I know that in this single blog entry, I’ll lose most Dave Ramsey fans – and I know that this is not something that he would do – in fact, he would rail against it.  That’s ok – my purpose of this blog is first of all to have a history of what has happened in my debt-reducing life, and this is part of it.  Of course, I’ll have to add another row on my debt reduction scheme, but, in the end, I feel that my family is better served by this than by spending about the same amount of money on an apartment and having nothing to show for it.  (The mortgage will actually be less than I what I could get an apartment for – the taxes and insurance put me about $100/month more expensive than the apartment  With the tax deductions and exemptions that I’ll get, it might end up being about the same.)

So that’s the big news of the past few weeks.  We have another two and a half weeks until we close, and at that point, we will really have a lot to do.


  1. Congrats on the new house. As for losing DR followers I think that many of the people who like DR realize that his plan needs to be adjusted to fit their personal lives. DR fans may not realize this in the beginning but when they've been at it as long as you have they do.

  2. As far as DR goes, don't worry about that. Life is what you make of it, and this is the path you decided to go. I think a house is totally worth it when you have a family. Your dedication to paying off debt has helped you get to this point too. Sure your progress is going to slow down, but think about the opportunity cost in buying during a down market. The amount of progress you lose could be made up later in resale value. I wouldn't loose sleep over spending 2 years at getting out of debt and then buying a house, the baby will do that for you. Congrats and good luck.