It's been a while but this week, I am continuing on with Part 3 of my family's financial journey. To read Part 1 of our journey, click here. To read Part 2, click here. So here we were... living in an old 2-bedroom, 1000 sq ft fixer-upper. Once we started trying to remodel it, we realized just how bad of shape it was in (mostly on the inside of the house). We couldn't even sell it without doing extensive work on it. It hardly seemed worth it.
So then, nine years after we got married... (this is what our family looked like at that time)
... we decided to tear down our old fixer-upper of a house, took out a loan, and my husband began building a new 3,000 sq ft house. He planned to do a lot of the work himself and just contract out certain parts of it. This was back when the economy & the housing market were still going strong. Our plan wasn't to live in the new house very long, but to sell it & use the profit to build a second house (our house was on 1/2 acre). Then to sell that & build a 3rd & final home (our dream home) somewhere out in the country, on a few acres of land.
Actually, instead of demolishing the house, we had the fire dept come out and use it as a practice burn.
Our son thought that was very cool.
Our building plan sounded like a good plan at the time. Looking back, I realize we should have looked into it further, and seek wise counsel from those we trust. But, at the time, I just decided to trust my husband since he sounded like he had everything figured out & it seemed to make sense. One BIG red flag... we still owed a mortgage (actually two) on our house. A house that was. No. Longer. There!
Well, after we started building, we had several setbacks- the housing market crashed, my husband lost his job, and his health declined, along with a few poor decisions (and purchases) on our part. We struggled to finish the house. It actually looked like this for over 6 months...
We couldn't even afford to work on it any longer. With friends' help, we were able to get the roof on before winter hit. What a huge blessing! Thankfully, we did finish the house (by going into tremendous debt). It ended up taking two years instead of one, and we took out more credit cards to keep everything going until we could get it finished & refinance the loan.
The house after it was finished... I LOVED the kitchen!
Once we did finish, we were over $200,000 in debt, and that's not even including our mortgage & second loan (for construction) that we still owed on the house we tore down. Who has that much debt?? This was insane! With our debt-to-income ratio, refinancing (our original plan) was out of the question. Ugh!
These are a few pictures of our family in November/December 2009, just after we moved in. When we first started building, we only had one child. Just after we moved into the house, our third son was born. Yes, it was a busy two years in more ways than one! lol
Although, we were enjoying the snuggly newborn days of our son, things were really out of control, and we were starting to panic. We needed to figure out what to do and fast, because we knew we didn't have much time before everything would come crashing down.
I wonder now if, say we would have built a more simple one-story house that was only 1800 sq ft, if things would have worked out alright in the end. But what's done is done, I guess.
With over $200,000 in debt, (Plus a double mortgage. Remember, the $200,000 is in addition to both mortgages!), we were sure we were headed towards bankruptcy. Well, duh! It wasn't what we wanted, but we didn't see any way of getting around it. The reality of that was pretty depressing. I felt like a failure. After all, my college degree is in Accounting! LOL
Bankruptcy seemed like a for sure thing. But thankfully, God had other plans...
Be sure to check back to read part 4 in our financial journey!
I'm a Christian stay at home mom to my three boys & a baby girl, trying to balance family life, homeschooling, and all the little things that go along with caring for my family and my home, while serving the Lord.
I don't want to be a tightwad or a spendthrift. I want to be smart. I want to celebrate life, to surround myself with beauty, and to be content in whatever state I am in. I want to manage my finances, to organize my routine, and to use my possessions wisely. I want to budget resources and time, to help others, and to bring glory to God. --- by Cynthia Yates