How To Eliminate Debt With One Move

Don’t Talk About Moving When Your Wife Is Pregnant

I’ve recently had a discussion with my 9-month pregnant wife about the idea of moving. Now, I should have known better than to approach that subject when my wife is in her “nesting” mode – needless to say she was not happy.

The reason that I brought up the subject is that we can literally choose to live wherever we like. There is nothing holding us back from moving anywhere that the respective laws allow. I began thinking about this subject as I have watched home values in my city double over the last two years.

My Thoughts

We have made a couple of really savvy real estate deals that have made us more money over the past two years than our respective salaries. This, along with minimizing our expenses has put us in a comfortable position with no consumer debt and an increasing net worth.

Because our only debt is our mortgage, I have been toying with the idea of selling our house and moving to a less expensive location whereby we can purchase a similar home and be completely debt free.

In my mind this makes a lot of sense, here’s why:

  • We would not be enslaved at jobs that we may not enjoy because we need to make a mortgage payment.
  • We could plow a lot of money into other investments at the age of 29, with a long time horizon to watch it compound.
  • We could spend money on travel and experiences that produce life-long memories, which is more valuable to me than “stuff”.
  • We could choose to take extended “vacations” from our jobs to spend with our new child and extended family.

Rationale

  • We both have Master’s degrees and are highly employable in any location. Even in a remote location, we could easily make ends meet by telecommuting or freelancing.
  • Our city is freakin’ cold in the winter – what is the advantage to that?
  • We would be further from extended family, but with the added freedom of not having a mortgage, visiting would be less taxing on the pocketbook.
    (To be honest, we see our extended family only slightly more than when we previously lived much further away)
  • Real Estate values are bound to cool at least slightly as evidenced by the “trendy” markets in the United States and Canada. I’m not calling a top to the housing market in my city, but I’m not greedy either – freedom is very tempting.

Making a move to a slightly smaller city less than three hours rive from our current location, with good job prospects for the both of us could set us completely debt free under 30 years of age.  Most importantly, it would do so while living the same lifestyle that we are accustomed to. This is something that I find very tempting. (The winter would be just as cold though)

Of course it was seriously bad timing on my part to bring this up due to the pending birth of our first child. However, it has been eating at me ever since we did our annual budget in January and I realized the possibility.

Complete freedom from debt is a huge goal of mine; but is this the right way to achieve it?

I’d love to hear your stories or thoughts on this matter. Feel free to share in the comments!

2 comments

  1. I too made the mistake of bringing up big financial decisions at the late stages of my wife’s pregnancy. You’d think I learned my lesson but I then did it right before she went back to work also (calculating what we could do with her again earning a salary). Big mistake. I think your plan is a good one, but you should also factor in future appreciation of your real estate. You may be able to become debt free right away moving to the smaller city, but how well will your asset grow in value there? Having some debt is not necessarily a bad thing either and consider that interest rates are falling so the cost to service that debt is going down (if you have a variable rate mortgage that is).

  2. Keith,
    I think you are correct about the future appreciation and you are also correct with regard to servicing the debt.
    I happen to work at a financial institution, so my mortgage is right now at a variable rate of 4%.
    My thought process in the above post is purely psychologically based. Mathematiclaly, it is a much better decision to stay put.
    Thanks for your comment and the advice for when my wife goes back to work 🙂
    -Tyler

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