Our man Abelicio Padilla has been blogging about his personal financial situation and he has been seeking advice for making sound money decisions. I wrote this piece as my input into his situation. If you'd like more background before you proceed, read Abelicio Padilla's interesting blog posts here.
Now here's my input:
It sounds like you have a plan Abe. However, I'd like you to think a little more about if you really want to sell that house. The market is down right now which means you probably won't get your best selling price for it. Also, did you consider that if you sell the house, you'll lose your mortgage interest deduction when you file your taxes? That deduction loss will cut into the monthly savings you expect to get by selling. Even though you won't notice it month to month, you'll feel it when you file your yearly income taxes. Consider also the upset that moving can cause. It's expensive. It will disrupt operations. In the long run It could cost you more than you think.As much as it may hurt you, I'd still suggest that you consider selling your Harley. Remember, they're still making them, you can buy another one some day. Is the bike regular transportation or is it just a pleasure ride? Think about it hard. If you sell the bike now, you can probably buy another one in a couple years. If you sell the house now it could be a very long time before you can buy another one. Is $300 a month worth that to you?
Stop stressing about your credit score. For right now, it is what it is. Keep on a path of responsible buying habits and the score will slowly take care of itself. Besides, if you already own a house and you're trying not to buy things that you don't need, what do you need a higher credit score for so soon? Ease up on yourself, be proud of what you have accomplished so far. Hug your wife and kids in your own home. Screw the credit lending companies. They have no idea what you're really worth to us anyway.
Finally, understand that most of the people in this country of ours live paycheck to paycheck just like you. Don't let that bother you for a second. If your plan is to do what it takes to earn next week's paycheck, no one can ask any more than that from you. Worrying about what MIGHT happen if you lose your job is just wasting your valuable energy. Forget about it. It might never happen. If it happens, you'll deal with it then.
So, here's the short version:
1.)Decide if you really, really, really need and want to sell your house.
2.) Decide if you really, really, really, need to keep that bike.
3.) Focus on being financially responsible and let your credit score take care of itself for now.
To sell or not to sell or what to sell. That is the question.