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We inherited my mother's home when she passed away two years ago. The home is located in a ski resort. We tried short-term rentals with the home, but it has not worked out like we thought. We live in another state and have quite a bit of debt: 420k mortgage, car loan, and 20k of credit card debt largely due to auto repairs and medical issues. We are current on all payments, but I am considering selling the inherited home, which could fetch 500-600k. I would use the money to pay off all of our debt. I am wondering if this is a rash or foolish idea. The allure of being debt free is so appealing right now. Your thoughts?
I am a 27 year old attorney, single with no kids. I currently work for the Government, but next fall I will begin a job with a private law firm in Washington, D.C. I like being a lawyer and think that I will probably enjoy working for a private firm, but I am acutely aware that the private firm world can be quite stressful. I have my doubts about whether this high-income but high-stress field is something I will want to stay with for a long time. This in conjunction with the ever-present threat of being laid off for economic reasons (which still happens with some frequency in private firms) makes me want to shore up my financial situation, save a great deal, and avoid the golden handcuffs for at least a few years while I figure out how permanent the job will be.
I have about $150,000 in debt -- $15K is a car loan, and the rest is student loan debt. Interest rates on the student loans range from between 6-8.9%. I have no credit card debt. My current salary is about $80,000, but next year it will more than double, plus a $50,000 starting bonus based on my prior experience. The only luxury I want to fund in the foreseeable future is a multi-week vacation to Europe between jobs, which I have not planned in any detail yet.
What should I focus on as I move into this higher-income job, keeping in mind that I may not find the money to be worth other sacrifices? My gut feeling is that I should pay off my student loans with haste, but what other strategies should I be looking into?