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I'm not saying selling the house will resolve everything. It will however free up about $3000 a month. No downside there!
If will free up $3,000 a month....for you to spend on other crap (based on your track record). Again, need to refocus your efforts on savings, investments, and paying off debts.
Rethinking this. Chapter 13 is an option as well. After 3 to 5 years your HELOC and cc debt will go away. You keep the house, reduce spending, place both of you on a budget and live within your means in the home for the next 10 years while the BK disappears. During that time rebuild your finances, pay down your home, build a net worth, and get rich.
I'm wondering if you're pulling our leg at this point.
In the event that you're not, then maybe you can explain how somebody who is sharp enough to pull in $200K a year can be so shortsighted and thickheaded about personal finance. You keep talking about the house being the whole story when clearly (as many have pointed out) it is not and refusing to acknowledge or address all the other financial issues.
200k is not that much.
You do not have to be money savvy to make a lot of money (look at all the pro ball players).
You are living a $500K lifestyle on a $200K income. Your lifestyle must change.
1. Use your $25k personal savings to pay off that $25k credit card.
2. Stop using credit cards and allocate $1500/mo to pay off your existing credit card debt and 401k loan. Once the credit cards are paid off, allocate this money to savings. Use an automatic bank account deduction.
3. Allocate $1458/mo to your 401k as an automatic paycheck deduction.
4. Allocate $1500/mo ($750/mo per child) to a 529 college savings plan as an automatic paycheck deduction.
5. Reduce your wife's groceries+allowance from $1500/mo to $600/mo.
6. Switch cell phone providers. You can get two iPhones on T-Mobile for around $100/mo.
7. Switch cable/Internet providers. Get their basic/low-end TV and Internet packages, which should be no more than $100/mo total. Alternatively, eliminate cable TV and get an AppleTV for the wife, an Xbox360 for the kids, and a Netflix subscription.
8. Switch your home phone service to Ooma (which uses your Internet connection) - $4.50/mo.
9. Eliminate the $400/mo kids sports membership.
10. Reduce your "going out to eat" budget to $150/mo. Stretch the budget by eating at lower cost spots.
11. Pay all utilities.
12. Any additional funds remaining should go to pay off the credit cards, HELOC, and 401k loans. Once those are paid off, allocate half the money to savings and the other half to your wife's allowance.
Tell your wife that this is all you can afford until you move and reduce your mortgage and utility payments to free up more disposable income.
OP you have already been given some great advice from the folks here. I do hope that you TRULY get the message that the house is not your main problem, don't move into a cheaper home only to replace your savings with other kinds of debt (more CC spending, another or higher car payment, etc). As someone who lives in a fairly high cost area (D.C. Metro) I really do feel for you though, some folks don't realize that a $500K home in many parts of the East/West Coast will not get you $hit, especially after the housing run up. People often time push older, smaller homes without thinking about the maintenance cost of owning an older home also. In this area, if you aren't in a "good" school district you are replacing a smaller mortgage with outrageous private school costs, so life is never as black and white as some would like to make it. However, in the end, it is SOOOOOO much more rewarding to live comfortably on a daily basis than to be subjected to constant stress and worry about your financial situation. Over time you will be able to fix up your new home the way want, in a responsible manner, and have more pride in being able to support your family, prepare for your retirement and kid's education comfortably.
On another note, I would STRONGLY suggest once you move on that you MOVE ON. It sounds like your wife will have a major time adjusting, but dwelling on the past and "what if's" will not help your situation. When the time is right, learn to undertake DIY projects and hit up thrift stores, Habitat for Humanity Restore, etc. for some GREAT deals. We have some awesome pieces that I brought back to life which would have cost us thousands to buy new. People are constantly asking us where we buy our furniture and can never believe it when we tell them. We do it more for the better quality and uniqueness than affordability but the savings is undeniable. Try it and embrace a new, healthier financial lifestyle. Hopefully your wife will be able to get aboard.
you might find the Early Retirement Financial Independence community helpful. There are many persons in your income group, who are retired(early) or plan to retire early. It might encourage you to change how you perceive your income.
Really? 90% of the posters on city-data probably wished they made 200k/year.
That does not make it any less subjective.
After taxes, it is no high faluting lifestyle.
Very comfortable, but not like some clowns try to stretch it.
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