Last week Tonya from Budget and the Beach wrote a great post entitled: Do You Need The Struggle ? In it she talks about how the hard times helped her grow. I had been thinking about writing this post for awhile and felt like it was a good time to go ahead and post it.
Currently I owe a serious amount on my student loans, 1 credit card, and my mortgage. Luckily my mortgage is very inexpensive, and my credit card will be paid by July. The student loans, well, that’s another story.
They are a pain. They’ve been around for too long, and it’s time to take care of the situation. I am over the loans and for awhile I’ve thought about using my “Nuclear Option.” What is that? That’s the option that I have to sell my place and pay off my student loans.
It was and is a tantalizing and enticing prospect. Fix the place up, and sell it to some other person who would likely rent it out to a renter. Like I want to. The more I think about it the more conflicted I’ve become because I’m not convinced that I would be resolving my long-term financial issues by doing things the easy way.
If I sold my place I would have the cash to pay off my loans, but I would also lose out on future passive income, owning an asset, and I would never be able to buy another property for that amount again in the city of Denver. Property prices have gone up substantially in the past 5 years. I also would end up paying more for housing because rents have gone up substantially as well. In fact, in order to live in my neighborhood I would probably have to pay between $920-$1350 a month. I currently pay $600 in mortgage expenses right now. I won’t be able to top that.
So, the Nuclear Option is off the table and the work my butt off till the debts are paid off is back on the table. Why? Because I wanted the feeling of working hard, moving forward, backsliding, then moving forward again to achieve my goals. I want to amaze myself. I want to experience the journey. The journey will prove to me and others what I’m capable of doing. Right now, I’m not really sure what I’m capable of until I try.
Last week I talked about my decision to pay off my condo. This is a big deal because I have created a goal and a direction to focus my debt repayment energies. I am behind on my schedule that I set for transitioning to self-employment. I am recalibrating and looking forward to my journey. Starting my business will increase my income and move me closer to my goals.
It is sort of freeing knowing that I do have an option. If the chips are down I have an easy way out. I ask myself what does it say about me to take the easy way out? How will I build personal character? Don’t I have enough character? We’ll see.
Do you have a Nuclear Option to resolve a financial situation?
Are you using it? How does it make you feel? Secure, fortunate, conflicted?
* This picture was taken on top of Pike’s Peak. If you come to Colorado I encourage you to take the Cog Rail up the Mountain*
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Erin @ My Alternate Life says
I wouldn’t sell either! $600 a month? That’s amazingly low!
Good luck, Michelle. Paying off debt is a pain in the ass, but hopefully the big payoff makes all the struggle worth it 🙂
Michelle says
The debt payoff will be a pain but I’m up for it! Yep, the little place is super cheap.
Chelles says
Personally, and this is just me, if I were to want to go totally nuclear, I would sell the house and get a roommate for a rental. Living with a roommate would cut your rental costs to the same as your mortgage (and most likely will cut the rest of your utilities bills in half). Use your home money to pay off your student loans. Buy a new home.
Michelle says
I’m not at that stage yet (Nuclear) and I’m unable to live with roommates anymore am way older than 20 🙂 It has taken me a long time to decide what the best approach will be and I finally feel like I have a plan that works for me. I would like to buy a new home with my future husband 🙂
Tonya@Budget and the Beach says
I can see where that would be tempting. Let me just say this, and you can take it or leave it. I know you have a soul-sucking job you hate. Believe me I get it, but I would make sure all my deb (OK maybe not mortgage since yours is so low) was paid off before I went to freelancing. I have no debt and it’s stressful worrying about making a certain amount each month. And I think you got it made paying 600 for the mortgage so I’m with you in that I’d keep it and try to earn extra money to tackle the student loan debt as quick as possible.
Michelle says
Tonya, I have taken the safe route for a very, very long time and I am no longer able to do it much longer. It’s not paying off for me anymore. If this were just year number 5 it would be different. But, this is the tenth year of doing something that I no longer enjoy and haven’t for a long time. I just can’t do it. For me to think about, and actually feel that Freelancing would be a viable option I’ve run a lot of numbers and put a lot of thought into what will work.
Luckily, I’m old enough not to be crazy. I know that it is a huge risk, but my concern is also my actual LIFE. I cannot continue living my life in this way. I have applied for a job in Denver that I have a possibility of getting if they haven’t identified a candidate. But, if I were to stay at my job until the loans are paid off I would be on depression meds, still unmarried, and another 5 years of commuting between Denver and Boulder. It’s just not an option anymore. I am open to working a part-time job in Denver as I build up my clientele. But, I’m pretty much ready to go in the next 6-7 months.
My goal is to knock the mortgage out in the next 1 1/2 years. That’s totally doable as I will just owe my mortgage and my student loans. I’m going to side hustle like a ROCK STAR!!!!
I also have good friends like yourself who make sure that I know all of the positive and negatives of switching to this type of career. Without your voices of reason I probably would have jumped last year. You guys kept me sane.
I’ll be ok.
Tonya@Budget and the Beach says
You definitely know what you need for yourself better than I do! 🙂
Michelle says
Chica, it took 4 years of thinking about it. The original plan was to quit and travel…ahem! I blush as I write that because that was the plan pre-blogging. At least I’ve decided to work now. LOL.
La Tejana @ Debt Free Tejana says
It sounds like keeping your place will be a much, much better option in the long run. You can do it with the student loans lady! Best of luck 🙂
Michelle says
I love my tiny place. Once it’s paid off I will use the payments towards my student loans and accelerate that process.
NZ Muse says
I do not have a nuclear plan. Alas.
Your housing situation sounds like a pretty good one overall. As someone in a NY/SF/Vancouver-type property market with very low hopes for ever being able to get into the market, I’m silently shouting HOLD ON TO WHAT YOU GOT.
Michelle says
It has been very tempting, but, I’ve noticed that sometimes it’s hard to get another property because inflation is constant. Also, I plan on leaving my job soon so I need to keep my housing expenses low. I want to rent out this property in a couple of years, then apply that income towards my student loan debt repayment. There are a lot of people out there who sold and aren’t able to buy again. It’s very demoralizing and frustrating for them.