Dear Dave: My wife and I make a little over $50,000 a year combined, and we’re almost debt-free. Right now, we have $50,000 left on our mortgage and $4,000 in student loans left to pay. We’re both really excited about the future, and we’re thinking about selling our home and moving into a trailer her parents own. On top of this, we’d like to save my wife’s entire salary for five years to buy another, better house. What do you think of this plan?
Dear Travis: I think selling your home is going a bit too far at the moment. Despite a really rocky road the last several years, the housing and real estate market is finally starting to rebound. At this point, there’s every indication that your home is going to go up in value. If you go with your plan, you’re going to lose all that appreciation value and lower your standard of living at the same time.
While you have something of a modest income, I think you make enough money to pay off the house and become prosperous during the next five to seven years, without going to the extreme.
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