Ep. 46: Nicole wants to know whether she can buy a house before paying down some pesky debt

Meet Nicole the 2nd (not to be confused with Ep. 12 Nicole)

Age: 25

Salary: N/A

Nicole’s main concerns, in her own words:

We have a little less than $40k in debt between our two auto loans, a personal loan ($8500), a credit card ($2000 @ 0% until paid) and student loans. The student loans have the highest interest at 6.8%, the rest is below 3.5% (We scored a great rate on consolidating old debt.) We’re on track to be out of debt in two years.

My husband has almost $30k in a 401k from a former employer. I have almost $2k in a 401k that I started this year. I’m now contributing 5% of my income and receiving a 4% match from my company. My husband just set up the same (we work together now). We have about $7500 in liquid cash savings.

We’re renting from family for $1000/mo but are eager to get into our own home. We don’t know if we should buy a smaller home now to take advantage of great rates, or wait until our debt is paid off and we can afford a more comfortable home. We’d love your advice!

What we cover on the episode:

  • To buy a house or continue renting?
  • Is too much of their household income going to rent?

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