My partner and I own a house in Milton and we have moved to a rental house in Oakville (that has been owned by my mom for over 30 years.) The plan is to keep our Milton house and then purchase this house from my mom next year. We tried this year to consolidate some of our bills (which we have done in the past a few times) but we were turned down because our debt ratio is too high. We owe approximately $100,000.00 in consumer debt and we have about $10,000 equity in our Milton townhouse - It is worth $203,000.00. Would you recommend that we sell our Milton townhouse so that we can lessen our debt ratio or focus on paying down our consumer debt over the next year. Thanks and we LOVE your show and watch it all the time. We have been trying to implement the jars for us on a monthly basis and your advice is FANTASTIC!!... Thanks for your time.

Whoa there girl, slow down. I can’t believe you’re ripping around trying to buy so much stuff at such a clip. You own a home, but you’re going to buy another one from your mom in the next year? Whazzup with that? You have $100,000 in consumer debt! Holy molely macaroni. 

The first thing you have to do is figure out why you’re racking up so much debt. No amount of asset liquidation (i.e., selling your house) is going to help you till you stop spending money. Second, have you noticed that you have almost no equity in your home. By the time you sell it, your costs will more than exceed your cash grab.

The fact that you’ve been turned down for yet one more consolidation loan should have been a big wake-up call for you.

Here’s what you have to do:

Get on a budget where you aren’t spending more money than you make.

To get your $100,000 in consumer debt paid off in three years will cost you almost $3,000 a month. If you can’t come up with that money, then get some more work. If you keep carrying this debt around, you’re going to end up losing everything.

Pray!