In debt, but feeling optimistic

Hi all, I've been with YNAB for about a month and I can already see a dramatic impact on my finances. I'm very happy to have found YNAB and I feel like I can see a light at the end of the tunnel for my debt but I do have some questions because I have a renovation that is going to need done to my home, but I can't decide how to handle it and continue paying down my debt.

To try to make a long story short, I'll stick to just the numbers, but I'm happy to provide any further details or backstory if there's questions.

Consumer debt + student loans = $115,000 ($50,000 remaining on a debt paydown program that is scheduled to be completed in Aug of 2022.)

There's a leak in one of the bathrooms in my house. It's not significant but you can see the impact in the unfinished side of the basement. The floor is not soft (yet) but I'm concerned. Estimates for this renovation are around $20-25,000.

I have a good income, I made over $135,000 in 2019 and I have no concerns about my job but I still feel like this debt and the bathroom leak is hanging over my head like a guillotine on a thin, fraying rope. I can't decide whether my extra money that I've found every month thanks to budgeting with YNAB would be best directed at the bathroom or the mountain of debt. The $50,000 in the debt program has consolidated it into low or no interest, something to keep in mind when considering this situation.

Any thoughts would be appreciated!

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  • My initial inclination would be to get the bathroom fixed and take care of that first before it becomes a larger (and more expensive) problem, then tackle the debts aggressively.

    Like 3
  • Hi Mike M !

    Another way to think about this, in terms of interest, is how much will the bathroom cost you later if it isn't addressed now? You mentioned a quote of $20-25,000. If you waited until the floor did become soft, or the water damage more apparent, would that quote rise to $30-35,000 instead? Would renovating now save you from having to do further repairs to the basement down the line?

    The bathroom sounds more like an immediate threat. If you replace that, I'd consider it the same as replacing the rope on the guillotine - it would give you more control and a better grip on preventing injury later. :)

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  • The third option is to get a good handyman. $20,000 is a “we’re going to make your whole basement dry” kind of quote. Kitchen and bathroom full reno kind of quote. 

    I’m betting there is someone out there who can address the leak for much less. And even if for some reason a 20K remodel is in order (but I doubt it and my house knowledge is not shabby) the odds that you can get someone to come in and periodically address the leak so that it doesn’t damage the house while you continue dig out of the rest of the debt are very, very good. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 2
      • Reported - view

      WordTenor Just make sure to run a dehumidifier to prevent mold on the already-wet surfaces.

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  • Get the leak repaired. Costs to repair the damage caused by the leak, but not the leak repair itself, should be covered by your homeowners insurance.

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    • Alaskan Otter
    • Not a YNAB expert by any means, but willing to help where I can.
    • alaskan_otter
    • 7 mths ago
    • Reported - view

    Yep, what they said. The bathroom is potentially going to become more expensive every month (week) that the repair is delayed. I would put as much as I could toward that, mentally filed under "Murphy's Law, life happens" and then attack that debt with ferocity. Just think how nice it'll be to have it all behind you, AND not have that repair hanging over your head.

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