If you know you have to fall into the hole [including debt], what is the right way to fall into it?

[AbuHossam]

The Question
So my wife and I were working hard in baby step 3 and then our AC just went out and was replaced, will likely soon need to repair our garage floor starting to cave in ($2100) and the biggest thing now on top of that is having water leaking through the bottom of the basement wall into the floor of the basement, signaling a need for foundation repair ($6000+?) and a mold expert to come in and redo that whole section of the basement ($25,000+).

We could have never expected to be dealing with all of these all at once and taking away our years-in-the-making lump sum of savings (our income was just barely above breaking even from a small shovel to hole ratio) plus another $25k in the hole, all in a span of just over a month.

Dave never seems to talk about what kind of debt to allow yourself to get into if you find yourself in a predicament like this. There are usually financing options available with the mold company, personal loans at the bank, home equity loans, and home equity lines of credit. (Not sure what else I am missing besides being extra stupid with a credit card.)

How would a smart financial person handle this besides working more hours and beans and rice, rice and beans? If you know you have to fall into the hole [including debt], what is the right way to fall into it?

ANSWER 1
Take a deep breath, make a list to prioritize, and just start taking steps to repair what you can/what's most important first . You can (and will) rebuild that EF. Check with your homeowners insurance first thing. We just went through a big mold remediation, and had to continually fight with the insurance but in the end they did end up paying most of it.


ANSWER 2
Your homeowner's might cover the mold because it sounds like it was a secret leak issue that you didn't know about. Check your policy to see if it's covered. Although 25K is steep - get another estimate


ANSWER 3
Dave will tell you no new debt. Period. That's hard, I know.

But there are many ways to solve this problem, and some of them are temporary. You need to get multiple experts in to get a range of solutions. Be honest with them about your budget. Also don't forget to check with your insurance about coverage for the mold.

We had similar foundation/garage issues. I had quotes for filling in the voids under the garage for about $8k, but a structural engineer told us we didn't need to do anything. So we didn't. We also had a crack in the basement wall that was leaking. We were able to install some piers for about $2k to shore up the cause of the cracks, and another $1k to seal the cracks (vs' thousands to dig out and repair from the outside. Both came with lifetime warranties but never needed them.

Long story short, don't panic. Work through your options. Find ways to stabilize and do things piecemeal as you can afford.


ANSWER 4
Get a few quotes. We have a few people we are talking to about an issue, and comparing itemized quotes is helping us with picking and getting best price & quality. For instance, 2 companies, same resolution but one is charging $500 for permits the other $1,200. Now we can approach the more expensive and pry on their reasoning. Things like that. Always helps to talk to a few people