Advice from Nashville's Financial Guru Dave Ramsey
Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
11/30/2004
Husband laid off - Should we sell our home?
Dear Dave,
My husband was laid off a month ago from a very high position as a director of operations making about $80,000 a year. We have no debt except our house payment. We owe about $82,000 on it, but it's valued at around $300,000. We're in pretty good shape financially for the moment. We've got $30,000 in our emergency fund. I work part-time and he's getting some unemployment, so we still have an income of around $2,000 a month.
It's difficult to find positions equivalent to the level of my husband's last job. He's also over 50, which makes it more difficult. He's even tried getting lower level jobs, but no one wants to hire him for those because they know he'll take a better job if one comes open.
I'm trying to figure out if we need to sell our house. Houses in this area are taking about seven months to sell. We've also got a boat worth about $18,000 and we're thinking of selling it as well. What do you recommend?
Sheila in Charleston, SC
Dear Sheila,
If you like your home, I'd strongly recommend selling the boat over selling the house. Another boat is a lot easier to get than another house and selling it is not nearly as traumatic on the family. That is unless you might be selling the house anyway to move to another market where work is more plentiful. Otherwise I wouldn't put the home on the market today. I would sell the boat first.
You can also dip into your emergency fund, but you need to make sure you're living on a budget and living like tightwads. I'd really love to see you not touch the emergency fund or barely touch it because he's gone out and gotten an extra job doing whatever. And I think he can find some kind of work to do in the meantime. I know people who go out and get jobs delivering pizza despite what they were making before. It's tough to do once you've had an $80,000 a year executive job, but there is something available. Also, understand part of what he's going through is a bit of a psychological/emotional crisis in the middle of all of this.
As long as he's being diligent in seeking a new job and you're doing the right things like budgeting and watching what you spend, I think you should keep the house. Take a deep breath. You're going to be fine.
Dave
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