Choosing Debt Annihilation

Greetings friends!  For those of you who tuned in last week, you know that over the course of the last couple weeks, we have been struggling with a huge decision here at Casa Frugal.  You can read all about it here, but for those of you who’d prefer the short version, the situation is basically as follows.

 

Note: This post may contain affiliate links.

 

We’ve been dying to move back to the mountains basically ever since we left in 2006.  We made this one of our top life goals back in 2010 (when we first sat down to write out our goals).  Basically everything we’ve done from a financial standpoint over the course of the last few years has been with this big goal in mind.

 

Then FINALLY this month a job opened up out there for Mr. CMF.  He interviewed, they offered him a job.  But it involves a 25% pay cut.  Plus a slightly higher cost of living out there.  We still have big student loan debt that we have not yet paid off (although we HAVE slashed over half of our debt since 2012, so we are making progress, just not there yet).

 

Dilemma options:

 

1) Take (better) job in dream location.  Make less money.  And likely take longer to pay off our student loan debt.  We also want to adopt again, which would probably push the student loan debt payoff out even farther.  In this scenario, the student loans would probably be with us for at least another five years, probably longer.

 

OR

 

2) Stay where we are, with Mr. CMF working at better paying but crappier job.  Pay off student loans a lot sooner (possibly as early as 18 months from now if we really rock it out).  Adopt again as soon as we save up enough money (which would likely be sooner in this scenario).

 

Whew!  That’s it, in a nutshell.

 

First of all, I have to say thank you so much to those of you who offered comments and advice last week!  It was truly appreciated.  This is one of the most difficult decisions that we have ever made.

 

 

The Decision

We ended up deciding… to do both options.  Haha, sort of!

 

Many of you who commented last week remarked on the fact that increased happiness is often worth doing something like taking a pay cut.  We wholeheartedly agree.  My own father passed away at age 48, so I know for certain that life is precious and that one day it can (and will) be over in the blink of an eye.  And sometimes far too soon.  So why spend it in a place that you don’t really want to be, always wishing to be somewhere else?

 

That’s why, on Friday afternoon last week, Mr. CMF called the potential new employer to say that he would be happy to take the job.

 

But.  As the weekend progressed, we both seemed to realize that… we weren’t happy.  This was the break we’d been awaiting for years.  And instead of celebrating, we were both quiet, nervous, and anxious.  I woke up in the middle of the night that Saturday night and got out my calculator… and spent hours running numbers.  How long it would take us to pay off the student loan debt using various payoff scenarios, how long it would take us to save up enough money to adopt again, what kind of place we’d need to live in to do both with less income, etc.

 

I approached Mr. CMF with these concerns, and he admitted that he had also been worrying about how we were going to accomplish all of these financial goals.  He told me that he’d been thinking he’d probably try to pick up a second job.

 

That’s when we realized… despite the fact that we wanted to move there because of the happiness factor, it dawned on us that if we made the move at the wrong time this could potentially have the opposite effect!

 

Ugh.

 

We thought about it all weekend and finally decided that we needed to stay where we are at.  It was one of the hardest decisions we’ve ever had to make.  The following Monday morning, Mr. CMF called the employer to say that we’d changed our minds and he just couldn’t take a pay cut like that at this time (they knew at the time they made the offer that it was lower than what he is currently making).  He was super honest with them and let them know that he is most definitely still interested in working for them in the future… but for now we just can’t do it.  I wasn’t on the call, but it sounds like it went really well.  They appreciated his honesty and let him know that he will definitely remain a top candidate for any positions that may open in the future.

 

 

Choosing Debt Annihilation

So.  After trying out both options, we decided to go with choosing debt annihilation and staying where we are currently.

 

Are we bummed?  Absolutely.  We really wish we could do it now.  But the silver lining to this cloud is that now we are SUPER motivated to dump our debt ASAP (and I thought we were motivated before- but this has taken it to a totally new level)!  We now know exactly how crappy it feels to have to turn down something you really want because of debt.  We do not EVER want to have to do this again!  The next time an opportunity like this comes around (and we really hope it won’t be years and years before it comes around again) we want to be debt-free and ready.

 

Suggested Reading:  One of my favorite personal finance books is The Total Money Makeover, by Dave Ramsey.  He has a lot of great quotes, but one of my favorites (and one that ran through my mind frequently over the course of the last week as we weighed this big decision) is this:  “If you will live like no one else now, you can live like no one else later.”  I think of that often as we go through life and make financial decisions.  If you haven’t read this book, it’s one that I highly recommend.

 

Have you ever had to turn down something you really wanted because of debt or your financial situation?  Were you glad that you made the decision that you did? 

 

 

 

 

CMF’s favorite FREE money management tools!

Some of the best online tools out there for money management are at Personal Capital, and the awesome news is that they are all FREE!  Cash flow tracker, 401(k) fee analyzer, investment checkup, net worth monitoring, and many more!  I’m a net worth junkie, so the net worth monitor is my favorite.  Check out my Personal Capital review here, or click here to check out all the awesome tools for yourself!

 

 

 

 

Photo:  Vladi_mir/Depositphotos.com