Yellow's Green

The Adventures of Money Blog.

Tuesday, June 20, 2006

We Can't Afford a House

We were presented with the opportunity to begin home ownership. (Sorta, but I'm not in the mood to get into all the details of the opportunity itself.)
My Mother-In-Law played with several different options on an amortization calculator, and I spent the day playing around with our finance spreadsheets to look at the possibilities. I came to the conclusion that we couldn't afford it. We could pretend that we could afford the smallest amount - but I had only factored in mortgage payments. Considering how it would effect our utilities and food bill would make it out of the question with our current situation. I'm not currently willing to turn me working into a necessity - so we declined the offer outright.

The moral of the story? We need to save save save as aggressively as possible, so the next time an opportunity like this comes along, we can take it.

My question is this: In saving so aggressively, should I make minimum payments on my student loan and put the rest toward the "dreams" pot, or should I remain aggressive in annihilating my debt. On one side of the coin, we're finally earning more interest than we're paying. On the other, getting rid of my loan gets rid of that losing interest all-together, AND would lower our monthly must-haves.

I'm currently leaning toward backing off on my aggressiveness toward paying extra on the loan, but using any extra income we may get - like me picking up part-time job, or selling a car - against my loan.


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