Dave Says Move It

My husband works two hours away from home. He gets up at 3 a.m. and doesn’t get home until 7 p.m. We have a fully funded emergency fund, and he makes $95,000 a year. My parents’ place is an hour from his job, and they’ve offered to let us live with them. What do you think of this idea?

Why don’t you just sell the house and move closer to where he works? If he makes that kind of money and you’ve got your emergency fund in place, you should be able to handle moving costs. I’ve got to be honest, I’d do the two hours to work and two hours home drive maybe once before I’d begin seriously looking for a place much closer.

Right now, you guys don’t have a life. And moving in with your parents wouldn’t be much better. That poor guy practically lives on the road, and I’m sure you both want more quality time together. He sounds like a great guy, though, to be willing to go through all that. He’s busting his tail and doing what it takes to provide for his family, but there’s just no reason for either of you to go through this kind of pain and inconvenience.

Get your house on the market, and find a little rental near his job for now. You can rebuild part of your emergency fund if necessary, but if I’m in your shoes, I’m going to fix this logistical nightmare as fast as humanly possible!

My husband and I need to update our will, but we’re not sure how to divide the money. All of our children are grown, including my three stepsons. The problem is that two of my stepsons are irresponsible with money and are drug users. Do you have any advice?

Typically, if you give money to a drug user they’ll use it for one thing: drugs. Your goal as a parent is to love them and teach them to the best of your ability. Buying their drugs upon your death doesn’t fall into either of those categories. There’s absolutely nothing wrong with you deciding not to leave them any money as long as they’re involved in this kind of activity.

If it were me, I’d have a reading of the will when the changes are made. Then, I’d sit down with the family members and explain why you’ve updated the will in this manner. Let them know you love them and want what’s best for them, but you and your husband have decided you’re not going to take a chance on funding any misbehavior on their part.

Make sure you let them know, too, that things can change if they change. They might be mad and fuss about it, but that’s okay. Let them be mad. It’s perfectly all right for you to attach stipulations to any inheritance they might receive, especially when it’s for their own good!

Most people who are in the situation described to Dave wouldn’t have made the mistake of being underwater on their house.

And if you aren’t underwater, whatever loss you take on your house you’ll “get back” because the house you buy will also be dirt cheap. 2 hours isn’t really that far to be in a different cost market.

So the only problem is if you owe more than your house is worth, since you can’t borrow more than your new house is worth to buy an equivalent house.

Of course, if you are underwater, you are already in debt whether you have realized that debt or not.

No, and I even downplayed the doom-and-gloom here at FR, mostly because I thought banks were too smart to actually lend money they would never get back.

On the other hand, I owned a home throughout this period, and unlike some of my more adventerous neighbors and others here and elsewhere, I didn’t re-mortgage my house every time it went up in value, just to take out the money and buy stuff I couldn’t afford.

So when my house went from being “worth” $500,000, to being “worth” $200,000, I was still well above water, because I never owed more than $120,000 on the house.

There are some people who actually had to buy their first homes into the height of the market. They are the ones I actually feel sorry for. But anybody who already owned a home — they could sell their home and buy a new home and not incur more debt, and keep well below the outrageous price peaks in their mortgage, and not get burned.

On the other hand, many of those underwater did get to spend hundreds of thousands of dollars on cool stuff, while I did not.

The point is that people who follow Dave’s advice (I’m not one of those, although I largely live my life in the manner he suggests, just because that was how I was raised — I simply don’t share his aversion to credit, since I don’t find it a temptation and therefore can use it for my advantage) — those people won’t likely be underwater, because they will have limited their borrowing and will be able to follow this advice.

More broadly, I’ll say that having money makes it much easier to handle money issues. People with money can borrow money more cheaply, can buy things when they are on sale, can replace instead of fixing when it makes economic sense, and in general can make better and therefore more frugal choices in their lives. So I think Dave is correct in fact — save up money, and it will make your life better.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.