Frugal Village Forums banner

1 - 20 of 21 Posts

·
Registered
Joined
·
429 Posts
Discussion Starter #1
Help! I just made a thread about the best order in which to pay off our $48,000 in non-mortgage debt and I'm sitting here with my mind racing.

A little background: We have been living on a written budget (zero based, we spend every $ on paper before the month begins) since March of this year and have paid down our debt by +/- $5000. We currently have $4800 in savings. This is earmarked as a $3k emergency fund, $1200 for vehicle repairs we know are forthcoming and $600 set aside for heating costs this coming winter.

My husband is a disabled veteran (he has mental illness and a head injury). He is able to work full time now and is the breadwinner. He also receives compensation for his injuries which equals approx 1/3 of our monthly take home pay. Based on the stability of his condition over the last several years, it is possible that he may not be able to sustain working full time. He certainly may be able to, but time off from work for treatment and/or hospitalization as well as a more permanent decrease in his functioning are all things we have to be aware of and consider.

Additionally, he is a union worker with a contract up for renewal next spring. Our current plan is to set aside our tax return in case of a work stoppage, it would cover 1-2 months of his pay. (yes, I am aware this is an interest free loan to Uncle Sam).

So, all that to say...the issue I'm struggling with, is that since 95% of our debt is now at 5% interest or less, should we be directing our extra "snowball" funds towards a fully funded emergency fund at this point? We would of course stay committed to budgeting and not incurring any new debt. As individual balances reduce to the point that they can be paid off without decreasing our savings significantly I would do so.

I appreciate any and all input!
 

·
Registered
Joined
·
13,930 Posts
In your case I would want a years Efund. We are in a similar situation due to my Dh physical health and him losing his job to outsourcing. We are on a 1 yr. contract. I am putting as much money away as possible. We are debt free thank goodness.
 

·
Registered
Joined
·
1,916 Posts
I agree. If you weather the work stoppage with no problems, you can reassess the money you have sitting around. If you still feel that your husband's health is going to cause issues, prepare for that. Medical costs can be astronomical, so having good insurance will be a must. Having money around to cover at least up to the out-of-pocket maximum would be wise.
 

·
Registered
Joined
·
3,488 Posts
I agree. If you weather the work stoppage with no problems, you can reassess the money you have sitting around. If you still feel that your husband's health is going to cause issues, prepare for that. Medical costs can be astronomical, so having good insurance will be a must. Having money around to cover at least up to the out-of-pocket maximum would be wise.
I agree with you..I

do believe that because he is a vet he is covered under the VA so there shouldn't be to much cost involved.
 

·
Registered
Joined
·
1,167 Posts
but does being a vet being reimbursed for an injury, does the amount go up if he becomes disabled enough that he cannot work? or would it be disability through his job? If its through his job, maybe the union helps employees get employer-provided disability payments quickly, if not I would start socking away money in the EF in case he cannot work and things move slow with disability. I would also check what short term and long term disability benefits he has so you don't have to figure all this out if a crisis occurs. Do you have a private long term disability policy? Being in this situation, this is the one big thing I did wrong, I always thought a private policy was too expensive and relied on the fact I had one through work. Well, the one I have through work turns out to be very hard to get and it could very well happen that I get nothing without getting a lawyer. I don't know if you can even get it with a pre-existing condition but to me, it would be worth just checking. Not to be negative, it just helps to know everything upfront if there is a chance of him losing the ability to work. Good luck!
 

·
Registered
Joined
·
871 Posts
I agree with stashing money away. Idea of DR is to not take on any more debt. So it's great to knock out those debts but it leaves you high and dry come spring well...you can't eat plastic.
 

·
Registered
Joined
·
2,280 Posts
I am in agreement with everyone else...stash stash stash away money just in case you need it later!
 

·
Registered
Joined
·
1,058 Posts
Not only do I want you to sock away money ... I want you to sock away CASH (real dollar bills somewhere very safe and hard to find.) I want you to reduce your visible assets (not traceable bank account balances, investments - except retirement, etc.) If the absolute worst happens, you might be forced into bankruptcy (yes you can keep the house IF it isn't worth too much and you can continue to earn enough to make the mortgage payment). In which case, having cash might be the only way you'll continue to make ends meet.

Adjust that tax withholding NOW. You'll still get a refund because it is so late in the year but, if your taxes are taken in a bankruptcy or lawsuit for unpaid bills, at least they won't get as much.
 

·
Registered
Joined
·
1,167 Posts
I agree, it would suck to not qualify for a program you do need, say Snap, because you have money in an emergency fund for future medical costs or job loss. I have to do this, I have an EF I'm using for Cobra and may have to live on until 2 yrs if/when I get SSDI. With truly no income I qualify for stuff except the EF and that is not huge. You'd think the gov't would want you to have an EF so you don't become a further burden to the state. Shrug.
 

·
Registered
Joined
·
429 Posts
Discussion Starter #11
Thank you all, very good advice. If hubby because unable to work due to his combat related injuries, he would indeed be eligible for an increased benefit, it would likely equal slightly less than his current earned income and disability benefit. He is also covered 100% for free VA medical care for all medical conditions (not only service connected) as a result of his level of disability.
I had not considered stashing actual cash away, that is a good point. Any tips on where to put it?
When I discussed these concerns with hubby, he said he prefers to focus on paying off debt because he is worried that we will get derailed if we don't maintain our current momentum. I can certainly approach the subject again. As someone said, you can't eat plastic..or count on credit to be there in a worst case scenario.
 

·
Registered
Joined
·
1,058 Posts
A fire proof safe helps. Or wrap the cash in a couple of plastic ziplock bags (freezer weight) and put them at the bottom of a chest freezer or the back of you refrigerator-freezer. You can even wrap the money in the bags in aluminum foil and mark it as old game meat - just don't throw it out when you clean the freezer!

You really just have to look around your house and figure out the best places. We have a piece of furniture that is so heavy it is impossible to move (literally gave the movers a hernia!) and that one is a good spot for hiding places - under drawers and in voids. In the master bathroom, there are good voids like inside the cabinet, up by the sink. Just remove the stash if you call the plumber over.

Split it up. Many people will purposely create an easy to find hiding place for some of their cash - like in a sock drawer - so if they are robbed the robbers will think they found all there is to find and give up looking for more.
 

·
Registered
Joined
·
1,167 Posts
I saw an ad for $32 small fire proof safes at Ocean State job lot this week, I believe there was a printable coupon. It was a brand name well known, that I of course cannot remember, lol

What do you guys suggest in this situation? We moved in here when my parents' house sold, so title or deed or whatever it was called, was in their name. When my house sold, we were supposed to put my name on the deed/title. But dad waited 2 yrs to cash my check. He didn't want to be "bothered" by having to go back to the lawyer. I kept telling him my share of this house is an asset for me, I need it to show I paid. When we went to the lawyer to add my name, because of improvements by dad had made and inc in home values, now my share was 7k more. So I kind of got totally screwed because he would never listen and cash that check, by the time he did, our house appraised higher. So I have to give him that 7k on paper, I will write him a check from the EF, which will be decimated. But the plan is for him to sneak it back to me little by little in cash, which I will store in safe. We have to do this to meet the elder trust plan that protects the house if they go to nursing homes, not explained well here, when I read up on it and met with the Elder law attorney, it makes sense. She did say I got screwed and even agreed to him paying back the 7k but she kept saying "be careful".

I'm scared of getting caught by some program I become eligible for but that's stupid because even with the 7k now, I am pretty sure I am close to eligible for SNAP. Does this make sense to anyone? any suggestions?
 

·
Registered
Joined
·
9,916 Posts
They usually want 6 months worth of ALL bank statements for SNAP etc. Bankruptcy is a year. That's any and all ... savings, checking etc.

Bernice AND Mama James .. if there's no hurry on the 7,000 you realize that almost anywhere he goes if he slides the debit card ... even inside on gas ... that he can get amounts some places up to $75.00... a few up to $100.00.

Nice thing about grocery stores is it's just shows up as Publix/Kroger/Meijer etc. Gallon of milk $3.99 and $40 back in cash. See what I'm saying
 
  • Like
Reactions: Bernice

·
Registered
Joined
·
1,058 Posts
Check into how much your parents can give back to you without triggering a taxable event. I believe the amount is $28K in property that your mom and dad can together give you per year. Keep in mind, I'm not a tax attorney so you should consult an expert as the need arises.
 

·
Registered
Joined
·
1,167 Posts
they will be giving the 7k in dribs and drabs of cash, great idea on debit card

crap, if I have to go to the elder law attorney again, this time to prove I owed it and I paid it, I'm gonna scream. But if Snap goes back 6 months, I'll probably have to. I'll need an explanation why 7k went missing.
 

·
Registered
Joined
·
9,916 Posts
Yep, the debit card is nice .. especially at the grocery cause no one ever says to save receipts from the grocery.

I said Snap goes back 6 months. I can't swear to that. Could be a year. But I do believe it's the 6 month. If you don't get paper statements remember to print the bank statements out.

If you have a crap ton of money in the bank you probably aren't going to be eligible for Snap anyway. Worth a shot
 
  • Like
Reactions: LongTimeLurker

·
Registered
Joined
·
302 Posts
It differs by state, the amount you can have in the bank and the qualifications for SNAP. My state, you can have $2000 in an EF and they don't ask for bank statements, just proof of income (paystubs). They will want you to fill out an application listing all the people in your house and all their incomes and their relationship to you. If you have roommates they may have to sign a form stating that your income is totally separate and you don't share food.
 

·
Registered
Joined
·
1,167 Posts
thanks for the info. Shockingly, my employer's long term disability approved me yesterday so I'll be over income now
 
1 - 20 of 21 Posts
Top