Questions: kids, cancer, debt...

[walking the walk]

2 years ago I was diagnosed with cancer and was completely unprepared, especially financially to experience a true emergency. I've been in remission and have worked hard over the past two years to get my life back on track.

I am back to work and make $75k a year. I have not contributed to my 401k, which is at $30k, at all this year as I've focused on paying medical bills and saving an emergency fund. The last remaining debt I have is $60k in student loans, and I currently have $15k saved in my emergency fund.

The reason I've saved the emergency fund is because I have 4 children and have been denied life insurance at this time due to the cancer. I'm now not sure what to do given my situation, do I continue making no retirement contributions and save up 6 months emergency fund, spend the next five years using all extra income paying down, student loans...I also currently rent and would like to purchase a home for my family at some point. Just not sure what to do.

[khaski]

1st, so glad to hear you're in remission and back on your feet! You must be a strong one indeed.....I do not know Dave's official stance on things like this, but I would encourage you to work on really beefing up that EF so you know you and your kiddos are all set, come what may, financially speaking. I would concentrate on that until you have a good year-two saved up, then re-contribute to you retirement account while slowly beating down those student loans. It's just my opinion, but if it were me, I think my priorities would be 1) making sure myself/kids are financially prepared for any other long term health issues that may (or may not!) come up 2)chipping into my retirement accounts once that's done, and then 3) repaying my student loan debt.

I am all for people taking responsibility for their debts, and getting out of debt as fast as is reasonable, but in your case, ensuring some long-term financial stability for your family should come first. I hate to say to put of retirement savings, they're very important, but they can wait a little bit more til you have a nice fat ol' EF secured. Down the line, when kids are gone and you do't carry such a financial burden, you'll have to play some catch up, but I think it should not be your priority now. (The caveat I almost forgot to mention- IF your employer matches any part of your contribution, contribute up to the point of the match IF you can still afford to tuck away some $ in an EF- no sense in passing up 'free' $ if they match)!

[Libby]

Welcome to the village and glad to hear that you're in remission

I may be alone in thinking this but my thoughts for the purpose of life insurance is to pay off any outstanding debts you may have so you don't burden others with it. Again - this is my take on it. Having said that, I'd focus on growing your EF b/c you never know when Murphy will strike and focus on paying down your debts. If you're truly concerned about the 401K savings and savings for a house, include a small % of savings for them monthly in your budget but focus the rest on EF and paying down debt.

[mh3rdwheel]

I feel for you, I am glad that your cancer is in remission. I also agree that your should beef up your EF instead of paying into you your 401K, I have a simple IRA through work and this past week I asked that no money be taking out for it so that I get more back.

Yesterday I saw a note that said if you work a holiday you will be paid time and a half, I have worked lot of holidays (Easter, etc.. any holiday that falls on a day that I work) I will get paid $12 an hour for holliday pay.

[Anna43]

I agree with the EF but I would also put into the 401-K to get the match your employer contributes. That is free money. Plus in a dire emergency you can access that money by paying the tax penalty. Hopefully you won't need to and you will appreciate a healthy 401-K when you get to retirement age. With Social Security and Medicare facing cuts everyone needs to plan for retirement today.