How Can I Fix My Teeth With No Money

Linda and Tod Freeman

MP Dunleavy, WD's personal finance columnist, is the author of Money Can Buy Happiness. Need money advice? Email your story to wdfeatures@hearst.com. You must be willing to be pictured and use real names if you're selected.

Linda Freeman's story
Linda Freeman, 57, from Dripping Springs, TX, feared their new house might be just that. After Linda and her husband, Tod, invited his mother, Anna, 84, to live with them, the couple found a four-bedroom, two-bath ranch (for them and three of their kids) with a small cottage where Anna would live. Linda knew in advance that they'd have to expand the septic system and upgrade the cottage. But it was only after moving in last May that the other minor repairs they'd spotted during the inspection morphed into pricey projects. There are problems with the wiring and the cooling/heating system, plus a few other issues. "Now I'm worried about what else we'll find," Linda says.

She's also concerned about paying for everything. Tod's mom used the proceeds from her old home to buy this property, with the agreement that Linda and Tod would cover expenses, so neither she nor the Freemans has any available savings. With everyone crowded into the main house, they're anxious to get the cottage fixed up. "I could use some objective advice," Linda says.

Plus: Are You a Financial Disaster Waiting to Happen?

How they got into this mess

Their situation may be the result of simple bad luck, too-hectic lives, and maybe a dash of "let's make it work." The purchase moved quickly, and although the property was inspected, problems were either overlooked or simply could not have been anticipated.

See also: 4 Bad Money Habits That Are Hurting Your Bottom Line

Plus, Linda says, "we've been dealing with a lot of major life events." On top of buying, selling and moving, their oldest daughter is heading to college, and Linda has been arranging legal protection for the future care of their youngest daughter, who has Down syndrome. "I feel like we haven't had a chance to sit down all year," Linda says.

The fixer-upper juggle is tricky: The family has needs (to have the home functional and safe) as well as wants (to get Anna situated in her private space). And every dollar has to count.

How to fix this money problem

Prioritize projects
Linda and Tod need to tackle safety and structural issues first, followed by comfort and cosmetic upgrades. But before they call a contractor, the property should be reinspected, ideally by an experienced member of the American Society of Home Inspectors, advises Tom Kraeutler, cohost of The Money Pit syndicated radio show. For $300 to $400, he or she will identify repairs that can be taken care of together, possibly saving thousands, and suggest fixes that will boost property values.

Although Linda really wants to get Anna situated in the cottage—because aside from being crowded, the main house isn't equipped for an elderly person—I told her that may have to wait. The septic and plumbing issue should cost around $12,000, and the remodeling of the cottage at least $35,000. If an inspection turns up other crucial repairs, they may want to outfit the main house with grab bars and other aids for Anna. They don't want their borrowing power maxed out, in case of a crisis.

Decide how to get the money
Since Anna paid cash for the property and has full equity, taking out a home equity loan shouldn't be difficult. Linda and Tod could handle the repayments. But Anna is reluctant to borrow against the house, and Tod and Linda don't want to put any pressure on her.

Another option the Freemans are thinking about is borrowing from Tod's 401(k). This is a much riskier road. If Tod loses his job, the loan typically would be due in full, including interest, within 60 days. If they defaulted for any reason, they'd have to pay a 10% penalty, plus taxes. The other big downside: A 401(k) loan can derail your retirement savings. Linda hopes that Anna agrees to a home equity loan, especially since the cottage upgrade should increase the property's value.

Start saving
Tod would love to add an office and a third bathroom in the main house, but I strongly encouraged Linda to do the minimum and save for the rest—she's got one child in college and one on deck, and she'll need cash. They don't have a mortgage, so they should be able to save. "We're going to be careful not to become overextended," says Linda. "We want these projects to pay off."

This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io