Help Me Think Things Through Please

**MsMarieH** · 02-22-2011, 11:40 AM

OK, here's the facts, Jack!

Me: Working
Hubby: Not working since Memorial Day 2010, supposed to get unemployment until Jan. 2012

Debt: Yup, we got it. At my current rate of repayment (I am snowballing slightly above the minimums due), it will be paid off in 39 months.

Savings: Well, sort of... We have about a grand in what I consider the emergency fund. Will have a few thousand more added from the tax refund in the next week or two.

On the one hand...

If I focus hard on paying off the debt early, we could possibly live on my income alone (however my work is having some rumblings of possible furloughs and layoffs related to federal budget cuts if they actually go through, so I'm not confident my job is secure). Realistically though, I don't see knocking more than a year off that payment plan and that would be if we were REALLY focusing on it.

On the other hand...

If I use all the extra money to pay down debt and hubby doesn't find a job come January (God help us, I'll kill him!!!), we wouldn't have that extra money in the bank as a cushion and we likely wouldn't yet have paid off all the debt so my salary alone wouldn't be enough.

I'm trying to decide if it's wiser to sit on any extra money (given the current financial situation of hubby being out of work) and just pay minimums on the debts or try to pay down the debt faster to be able to live on one salary anyway.

Mind you, if he finds a job, all bets are off! I'm going to throw every extra penny to the debt then.

Your thoughts?

**Mom2-3** · 02-22-2011, 12:08 PM

Personally, I would only pay minimums and cut any extras from my budget. That money in the bank would help me sleep easier until the job situation was sorted out.

**happymomof4** · 02-22-2011, 12:39 PM

Wow I was just in the same situation as you.

I work full time outside the home and cover our medical, life insurance and 401K.

Dh--layed off July 2008. He got a 6 month contract job in July 2010. Layed off again in December 2010. He was not eligible for unemployment until April of 2011.

So we where living on my income only. I kept what we had in the bank for emergiences. I paid minimums on everything. Our winter months are hard on us with the electric bill being so high to heat our home. I also had car issues that I needed to take money out of the emergency fund.

Good news on my part. Dh got a job and so now we don't have to worry about living on my income only.

Good luck.

**laura-n-sasha** · 02-22-2011, 02:08 PM

Originally Posted by Mom2-3

Personally, I would only pay minimums and cut any extras from my budget. That money in the bank would help me sleep easier until the job situation was sorted out.

This is what I would suggest as well. Even though the debt can be a nightmare in itself, if you had NO money, how would you live?

Having extra money just in case something bad happens, God Forbid, knock on wood three times :0 means that you do not have to use the credit cards, you will have the cash.

Then do the drastic stuff, like getting rid of all extraneous stuff: you know, the cable, the TV, the eating out, the meat, the vacations. See if you can get a lower interest rate on the debt.

He needs to learn different skills, whether they be knowing how to use the computer to anything else. He needs to be actively looking AND learning new skills. It does not mean going back to college, but learning on his own time. A TV will not do that, but a computer will.

Also, having unemployment, make sure that they are taking out money for taxes. I got slammed for the 2010 taxes as we did not realize that the taxes taken out would help us. This year, we are getting the taxes taken out, but I am losing about 20% of the money. Oh well, next year will be better!

Good Luck and let us know how it is going!

**MsMarieH** · 02-22-2011, 02:28 PM

Yes, we definitely had money withheld from the unemployment, so it didn't come back to bite us in the butt. I really feel for people that don't realize they should do that.

He's in IT. His industry has been hit pretty hard, but I think it will come back. He has been using this time to gain some additional certifications.

**mndtrp** · 02-22-2011, 07:17 PM

I would build up larger savings until a steady paycheck was coming in.

**Greebo** · 02-22-2011, 07:45 PM

Storm on the horizon - batten down the hatches. SAVE. SAVE. SAVE!

DO NOT pay more than minimums and cut out all non-essential spending until the storm clouds clear!

**jzanoletti** · 02-23-2011, 09:07 PM

Hello!

Pay the minimuns...save all the money you can. Once one of the two scenarios come about then you must act.

1. When you've saved enought to payoff all debt and have 1 month in savings I would payoff all the debt no matter what.
2. If something happens to your current job then you have the savings to face the unemployment at that time.

Just pay the min save as much as you can and once you have enough to pay down all your debt pause for a moment, analyze everything going on in your life at the time and then decide the plan of action.

**larabelle** · 02-24-2011, 08:14 AM

Originally Posted by Mom2-3

Personally, I would only pay minimums and cut any extras from my budget. That money in the bank would help me sleep easier until the job situation was sorted out.

I totally agree!!! Not only cut extras from your budget but cut your budget to the bone...

**larabelle** · 02-24-2011, 08:15 AM

If you work for the feds I speak with first hand knowledge that your job is NOT secure....

**Preston** · 02-24-2011, 08:52 AM

You have a VERY real storm that is headed your way. Bunker down and get some cash so you can survive. The debts can go to hell in the meantime.. keep them current but NOT A PENNY MORE!

And if the storm passes, your job survives and your spouse finds one too -- knock out the debt quickly. But until the dust settles you have little control over the situation.

I am sitting on enough money ($5000ish) to pay off my last debt (student loan) but we just had a kid, are dropping to one income until I can find a new job, and have two vehicles from when Bill Clinton was president -- there are lot of things that can go wrong. So while I could just wipe out the debt there are so many variables that are beyond our control it would be horrible to be debt free and then get behind on mortgage and stuff because we cut it too close.