I need about $20k to get us through a layoff-home equity loan?

[Anonymous]

Here is a link to the top zero percent interest credit cards…

https://www.nerdwallet.com/best/credit-cards/low-interest

I would not sell the house. That is your biggest asset. Selling the house and moving will take more time and money than you realize. If you can cobble together a few zero interest credit cards with transfer checks, use that to bridge the gap. Ask the childcare center for a lower monthly payment to get you to the first of the year. They may be able to get creative in how and when you pay them. Use the zero interest credit card cash transfer check to pay them. Keep your SN child in the center. Use your time to get a new job, make that your job each day. It may take more or less time than you think, budget accordingly. You can do this! Good luck and let us know how things are going.

[Anonymous]

I lost my job a couple years ago thinking I’d have one in a few months. Took me over a year, and the job environment was wayyyy better. We downsized our life drastically - sold our house and rented and it was a very good decision. Unless you’re a skilled worker who has a trade I would prepare for the worst and hope for the best.

[Anonymous]

The special needs child can get preschool through the county. Drop the child care.

[Anonymous]

What are you spending 10k a month on - on top of your husband's salary?
There has to be areas to cut and even if you made a thousand a month working at starbucks, it is something. Get a job, any job and take the heloc.

[Anonymous]

Anonymous wrote:I'm sorry to hear about your lay-off and your child's illness. It sounds like you had a bunch of challenges all at once--and that can erode savings. Most of us have had moments where we thought--another repair, a lay-off, an illness would really suck now because the stores ran dry, even if we are generally financially responsible.
If you are very confident you will find work, I would probably take the HELOC, but I would shore up more first so it doesn't compound further if your plans go astray.

As a college professor, your husband usually has ways he can increase his income: consulting, invited speaking, summer teaching, research grants with summer pay, temporary admin assignments, royalties from more lay book publications etc. It would probably be good for your husband to come up with a plan to increase his income by 10-20k/yr--I know this doesn't likely solve your immediate problem, but if you end up with your career search taking longer, it's better to have a plan that's in action to generate income to cover bills. Plus it will be a longer term way to replace savings. I would also encourage he speak to the university about your lay-off/children with special needs, many colleges/universities have hardship loans at reasonable rates. Make sure he adjusts his tax withholding too to reflect the lower joint income.

But in the meantime, I would really cut expenses now--I would shop around auto insurance now that you got rid of a car, check all your subscriptions, go to beans/rice style diet, eat from your pantry, don't go out to eat/order in at all, have buy nothing months etc. I don't know where you have fluff in your budget, but most of us do have some. I think it's great that you're selling things too--gets rid of clutter. Basically if you get the HELOC, every single thing you are buying costs 10% more than it should AND is negatively compounding, so the less you can take in the loan the better. Trim the budget before you get the loan.

If your kid gets medical bills again, put off that debt--that can usually get reworked. Talk to any providers with regular bills (childcare, schools, etc.) to see if they have any hardship payment pause policies. If you don't need them immediately, talk to them anyway--saying you have been laid off, you hope to be employed soon but you want to alert them to the situation and find out any possible flexibilities.

Use the initial time to intensively job hunt, starting now (as well as plan to reduce the budget), but give yourself a timeline. Let everyone you know know you are looking for work, not just your industry contacts/recruiters. If there aren't strong prospects by say Dec 1, have a plan to start temp working--either temp seasonal work or some remote on-line work (tutoring, consulting, whatever is quick and easy for you). People usually don't hire in Dec- early Jan so intensive career hunting isn't worth it then. So have a plan in place. I don't know if you've been laid-off before, but it really is a psychological game. I personally find having benchmarks in place (if no job by x date, reduce spending further in these ways, get a 2nd job etc.) with the numbers all worked out to help me feel confident and in control, which helps with the job search. Good luck!

OP, I was in ( maybe still am in) a similar situation to yours. This pp gave good advice. One thing I really didn’t understand or agree with was the concept of allowing medical debt to accumulate. Instead, I put it on my credit cards and paid the docs. I felt it was a matter of honor. This really backfired when it was time for my oldest to apply to college and my $30k in medical debt was considered credit card debt that didn’t count for Financial Aid, so we got none. I agree about not selling the house, but if it is not too disruptive to your kids, moving to a lower cost of living area would help in many ways. You can rent your home. Our tale of woe started out like yours but has dragged on for many years. We’ve survived by refinancing our two mortgages over and over at opportune times. On paper, we are millionnaires but most is tied up in 401ks and real estate. We live very poorly compared to others in our area, and it is a constant source of stress for everyone in the family. Think this over carefully and good luck to you.

[Anonymous]

[quote=Anonymous][quote=Anonymous]I'm sorry to hear about your lay-off and your child's illness. It sounds like you had a bunch of challenges all at once--and that can erode savings. Most of us have had moments where we thought--another repair, a lay-off, an illness would really suck now because the stores ran dry, even if we are generally financially responsible.
If you are very confident you will find work, I would probably take the HELOC, but I would shore up more first so it doesn't compound further if your plans go astray.

As a college professor, your husband usually has ways he can increase his income: consulting, invited speaking, summer teaching, research grants with summer pay, temporary admin assignments, royalties from more lay book publications etc. It would probably be good for your husband to come up with a plan to increase his income by 10-20k/yr--I know this doesn't likely solve your immediate problem, but if you end up with your career search taking longer, it's better to have a plan that's in action to generate income to cover bills. Plus it will be a longer term way to replace savings. I would also encourage he speak to the university about your lay-off/children with special needs, many colleges/universities have hardship loans at reasonable rates. Make sure he adjusts his tax withholding too to reflect the lower joint income.

But in the meantime, I would really cut expenses now--I would shop around auto insurance now that you got rid of a car, check all your subscriptions, go to beans/rice style diet, eat from your pantry, don't go out to eat/order in at all, have buy nothing months etc. I don't know where you have fluff in your budget, but most of us do have some. I think it's great that you're selling things too--gets rid of clutter. Basically if you get the HELOC, every single thing you are buying costs 10% more than it should AND is negatively compounding, so the less you can take in the loan the better. Trim the budget before you get the loan.

If your kid gets medical bills again, put off that debt--that can usually get reworked. Talk to any providers with regular bills (childcare, schools, etc.) to see if they have any hardship payment pause policies. If you don't need them immediately, talk to them anyway--saying you have been laid off, you hope to be employed soon but you want to alert them to the situation and find out any possible flexibilities.

Use the initial time to intensively job hunt, starting now (as well as plan to reduce the budget), but give yourself a timeline. Let everyone you know know you are looking for work, not just your industry contacts/recruiters. If there aren't strong prospects by say Dec 1, have a plan to start temp working--either temp seasonal work or some remote on-line work (tutoring, consulting, whatever is quick and easy for you). People usually don't hire in Dec- early Jan so intensive career hunting isn't worth it then. So have a plan in place. I don't know if you've been laid-off before, but it really is a psychological game. I personally find having benchmarks in place (if no job by x date, reduce spending further in these ways, get a 2nd job etc.) with the numbers all worked out to help me feel confident and in control, which helps with the job search. Good luck![/quote]

OP, I was in ( maybe still am in) a similar situation to yours. This pp gave good advice. One thing I really didn’t understand or agree with was the concept of allowing medical debt to accumulate. Instead, I put it on my credit cards and paid the docs. I felt it was a matter of honor. This really backfired when it was time for my oldest to apply to college and my $30k in medical debt was considered credit card debt that didn’t count for Financial Aid, so we got none. I agree about not selling the house, but if it is not too disruptive to your kids, moving to a lower cost of living area would help in many ways. You can rent your home. Our tale of woe started out like yours but has dragged on for many years. We’ve survived by refinancing our two mortgages over and over at opportune times. On paper, we are millionnaires but most is tied up in 401ks and real estate. We live very poorly compared to others in our area, and it is a constant source of stress for everyone in the family. Think this over carefully and good luck to you. [/quote]

PP here. To clarify, we took cash out with each refinancing, thinking it would allow us to catch up, but my job earnings never recovered. We’ve been extremely lucky that our houses have appreciated dramatically, so that we could do that. Even in hindsight, that was the best way to do it, though interest rates are not in your favor now, you could still potentially do a smaller cash out and of course then you deduct the interest on your taxes. Again, good luck to you and I will monitor the thread. Having young special needs kids, high expenses and no family to help out is very stressful, so be sure to take care of yourself. I ended up with a very rare condition that was largely stress induced. Read up on personal finances - you sound like me, a first gen success story. If you have student loans, put them on hold due to job loss. Probably everything your parents drummed into your head about debt was wrong. Leverage your assets to generate the cash you need. And yes, lean on your husband to do more for money (not glory).

[Anonymous]

How did medical bills eat up your savings? You don’t have health insurance? OOP maximums are usually under $20k.

[Anonymous]

Anonymous wrote:How did medical bills eat up your savings? You don’t have health insurance? OOP maximums are usually under $20k.

I was wondering that too- especially with a college professor. Doesn't your spouse get insurance through the university?

[Anonymous]

I don't know the details, so you would want to vet it carefully, but could you borrow money from your 401k? I know there are rules, and I am not sure if it will cost $$$, but it worth investigating.

[Anonymous]

In these cases "unexpected home expenses" = major fancy home reno they couldn't actually afford. Also explains the "appreciation". How do you spend $15-20K per month and have NO emergency fund? That's just patently irresponsible and idiotic. I bet we make less than you do and could live for a year on no income without changing much and closer to 2 in "bare bones" mode.

[Anonymous]

Anonymous wrote:In these cases "unexpected home expenses" = major fancy home reno they couldn't actually afford. Also explains the "appreciation". How do you spend $15-20K per month and have NO emergency fund? That's just patently irresponsible and idiotic. I bet we make less than you do and could live for a year on no income without changing much and closer to 2 in "bare bones" mode.

I mean, have you priced out the cost to replace a roof lately?

[Anonymous]

Anonymous wrote:In these cases "unexpected home expenses" = major fancy home reno they couldn't actually afford. Also explains the "appreciation". How do you spend $15-20K per month and have NO emergency fund? That's just patently irresponsible and idiotic. I bet we make less than you do and could live for a year on no income without changing much and closer to 2 in "bare bones" mode.

DP. How do you know that? Our boiler broke in the dead of winter two years ago (I had a newborn too) and it was 16k to replace it. Our basement flooded in several storms. Thousands of dollars for mitigation. Roofs leak and need repair. Owning a home, especially an old one, is a money pit. A sewer pipe under an 100 year old house can be crushed and need to be replaced. 20k for that. Mold can grow in a wall. Most of this is covered by insurance. My husband and I were so upset when our boiler broke and we’re talking about how people get by with this insanity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In these cases "unexpected home expenses" = major fancy home reno they couldn't actually afford. Also explains the "appreciation". How do you spend $15-20K per month and have NO emergency fund? That's just patently irresponsible and idiotic. I bet we make less than you do and could live for a year on no income without changing much and closer to 2 in "bare bones" mode.

DP. How do you know that? Our boiler broke in the dead of winter two years ago (I had a newborn too) and it was 16k to replace it. Our basement flooded in several storms. Thousands of dollars for mitigation. Roofs leak and need repair. Owning a home, especially an old one, is a money pit. A sewer pipe under an 100 year old house can be crushed and need to be replaced. 20k for that. Mold can grow in a wall. Most of this is covered by insurance. My husband and I were so upset when our boiler broke and we’re talking about how people get by with this insanity.

Most of this is *not* covered by insurance.

The other thing lll say is that it does sound like OP is house poor. They don’t have the savings buffer to maintain their home. Their position sucks, but I would seriously consider selling the house, downsizing with cash, paying off their debt, and focusing on saving.

[Anonymous]

Anonymous wrote:We have family in somewhat similar situation.

1) why are you so sure you’ll have job by January? We know folks laid off for a year? If you have an offer can you get advance?

2) you need to pack up all your stuff and move out and RENT OUT YOUR HOME. get rid of as much as you can, store some, and then move where you can (1 bedroom apartments, univ housing, family, rent an trailer and camp). You need rental income to cover mortgage. January is 3 months away.

3) hardship withdrawal of 401k. You should qualify.

1) agree this thinking may not serve you

2) this could work if OP and DH have somewhere to go with kids in the interim that would allow for kids to go to daycare, husband to work, and her to interview. Otherwise not practical.

3) she can’t borrow from her 401K and he has a pension.

OP- can you speak to someone at a bank about your situation?

[Anonymous]

Anonymous wrote:

Anonymous wrote:In these cases "unexpected home expenses" = major fancy home reno they couldn't actually afford. Also explains the "appreciation". How do you spend $15-20K per month and have NO emergency fund? That's just patently irresponsible and idiotic. I bet we make less than you do and could live for a year on no income without changing much and closer to 2 in "bare bones" mode.

DP. How do you know that? Our boiler broke in the dead of winter two years ago (I had a newborn too) and it was 16k to replace it. Our basement flooded in several storms. Thousands of dollars for mitigation. Roofs leak and need repair. Owning a home, especially an old one, is a money pit. A sewer pipe under an 100 year old house can be crushed and need to be replaced. 20k for that. Mold can grow in a wall. Most of this is covered by insurance. My husband and I were so upset when our boiler broke and we’re talking about how people get by with this insanity.

They bought their home at $800K with a 2.25% interest rate, so not $20K/month. And had home and child medical expense emergencies.