Finances, Part III

Last week, I shared the nine things we started doing to dig ourselves out of debt.

Yes, we had decided to get our finances in order. Yes, we researched ways to accomplish getting out of debt. Yes, we tried things, and kept searching for more. Yes, we had paid off one credit card.

But also, yes: we were still tens of thousands of dollars in debt (consolidated credit card and student loan debt and car loan debt). I forgot to mention it in last week’s post, but we also had our hospital bill from the birth of our son that we were making payments on. Nobody tells you when you have a baby that you could still be responsible for thousands of dollars in costs, depending on your insurance deductible. We chose to make payments of $50/month because it was interest-free debt (and they could get their money whenever they got it).

Things were far from perfect, but we were feeling better – we were making progress.

We were both enjoying and excelling at our jobs. Our son was healthy. I was promoted right around the time he turned a year old. Some of my favorite times in my career happened within those three years after he was born.

And then we had a baby girl on the way.

In Finances, Part I, I wrote about our scramble to find a new home when I was pregnant with our son. This pregnancy was different… we had room for our baby girl in our house. We did the things parents do with a second baby on the way: transitioned our son to a big boy bed, changed his room to be the larger bedroom, and redecorated his old room to be for baby girl. I was not thinking about selling our house at all.

I’ll say it again: I was not thinking about selling our house at all.

But Brian had other plans.

That guy is always pushing us to be better, and always looking for opportunities for us. We wouldn’t be where we are today without him. And he’ll tell you that we wouldn’t be here without me. It is a true partnership.

Brian had never stopped watching the housing market after we bought our first house. He would look at listings almost nightly. Thanks to apps like Zillow, you can also keep an eye on the ballpark value of your home. We watched our home value consistently climb as the housing market rebounded. It got to the point where we had some real equity. We used to joke: “As soon as we hit $X in value, we’re selling this thing.”

We weren’t looking to move; Brian was looking for a gem – a home that maybe had a little more space, a bigger lot, a real backyard. We would only seriously look at a home if it felt like “the one.”

And then a home hit the market that sparked his interest.

He emailed a realtor about it, and we were told it wasn’t actually on the market any longer. Months went by. And then we saw that same home on the market again. What was the deal with this place? Something seemed weird about it.

We emailed a realtor again (the one we ended up hiring), and she set up a time for us to see the house. Like when we looked at our first home, I hated it and Brian loved it. The house had bad vibes to me. I was also 8 months pregnant when we looked at it and had a perfectly nice room in our current house to bring my baby home to…that’s where my head was.

Brian saw an opportunity.

He said it was a time to step out of our comfort zone and take a risk. No risk, no reward.

It was one of those “worst house in a nice neighborhood” types of situations. One where you can get the home at a good price (lower than the other homes) and have the potential to build equity quickly with a few improvements. We looked at it twice – the second time we brought our close friends with us to check it out, too. We wanted another opinion and they were more experienced with buying homes than we were at the time.

We decided to put an offer on the house. It was contingent on us selling our current house. The seller declined our first offer, countered, and we accepted that counteroffer.

Then we had the “oh shit” moment of needing to get our house listed ASAP.

By this time, my due date was rapidly approaching.

We had two interested buyers within the first two days our home was listed. The first buyers put in an offer, and we declined it (we didn’t like the terms of their offer, and we knew someone else was interested in it). The second buyer came to look at our house while I was in early stages of active labor. We had to leave our house and take our son to the park. I remember having a few contractions while we were there.

Looking back, that all sounds totally and completely crazy. To be buying and selling homes while having our second child, and doing it because it was a good opportunity, not because it was a necessity.

What we implemented to get our finances in order throughout the last three years had prepared us to take advantage of this opportunity.

If we had continued to live carelessly with our money, we wouldn’t have positioned ourselves to move into a nicer home.

More importantly, we would not have had the mental clarity to even look for an opportunity – we would have been bogged down and overwhelmed with debt.

The sale of our first home allowed us to pay off our debt consolidation loan. That meant no more credit cards and student loan debt – it was an incredible feeling. We paid off Brian’s truck. We paid off all debt except for my car, and we had the most money in the bank that we had ever had.

Yes, the housing market going up was not something we controlled. We got lucky.

But if we hadn’t made the conscious effort to get our finances in order, we would not have been able to take advantage of our increased home value and jump into a bigger house. We wouldn’t have had the money to pay off our debt – it would have been tied up in our house. And we wouldn’t have been looking for the opportunity to sell… we would have been “just getting by.”

Our finance story continues next week with Part IV.

“Success occurs when opportunity meets preparation.”

Zig Ziglar

“I believe luck is preparation meeting opportunity. If you hadn’t been prepared when the opportunity came along, you wouldn’t have been lucky.”

Oprah Winfrey

“You have to work hard, and try to put yourself in a position where if luck strikes, you can see the opportunity and take advantage of it.”

Mark Cuban