Depressed

iVillage Member
Registered: 09-15-2008
Depressed
15
Mon, 09-15-2008 - 4:24pm
I am sinking into a depression because of my debt troubles. My husband and I have fairly decent jobs, we make over 110,000 a year and we are in CC debt of about 36,000. Over the last 9 months or so, I have been having trouble making ends meet and paying down the debt. We are in a vicious cycle where we use the cards buy necessities and we are almost maxed out. That's a relief yet it is nerve racking that we have no where to turn if we have an emergency. I have over 50,000 in my IRA that I can only touch if I leave my job. I would not normally consider leaving my job but to access this money and eliminate my debt is all too tempting right now. To further complicate matters, we are expecting our third child this winter. I can't afford to have another child when we can barely live now. How will I be able to afford daycare after my leave is over. My husband is aware of these issues but we just can't come up with a good solution. I am pretty confident if I left my job, they would ask me back, but there are not guarantees. At this point, I am desperate and it drives me crazy knowing I have this money that I cannot access right now that would wipe out my problems. I am having a hard time sleeping, this is affecting my well being and I should be enjoying this time right now being pregnant. My life is otherwise perfect and I try to convince myself that there are bigger problems in the world and I should just remember that, but I can't. I am so panicked. I know there is magic answer and I know it's not a good idea to take my retirement but it's that or face losing everything. Please offer any suggestions or just a "I've been there." Thanks.

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iVillage Member
Registered: 11-17-2007
In reply to: amc0303
Mon, 09-15-2008 - 4:57pm

Sorry you feel so bad. But you guys are making really good money by my standards We bring home a little OVER 3,000 a month. And at the first of the year we were around 25,000 in debt.


Now

iVillage Member
Registered: 08-29-2006
In reply to: amc0303
Mon, 09-15-2008 - 4:59pm

Hi There,


Everything

iVillage Member
Registered: 01-25-2006
In reply to: amc0303
Mon, 09-15-2008 - 9:24pm

Hello! Sorry to hear things are so stressful.

I'll preface this post w/a statement that I think using your IRA money for this is a really bad, very expensive decision. If you crunch the numbers, you'll understand how substantial of a loss you will take on this type of cash out. That being said...

I don't understand why you would have to quit your job to get to the IRA. You should be able to access $ you have submitted to an IRA at any time with a substantial penalty and you would have to pay taxes. If it happens to be a Roth IRA that you have held for more than 5 years (I doubt it since it is tied to your employer), you could access your original contribution w/o penalty. If a big piece of those dollars are unvested company contributions then I don't understand how you could get the money regardless. I think you should clarify the terms of the IRA for yourself.

Before you make a final decision on tapping the IRA funds, you might want to consider setting up an appointment with a Consumer Credit Counseling service (CCCS) in your area. This should be a not-for-profit organization that will ask you to provide documentation of your expenses and income so they can evaluate whether their program might be appropriate. They will be able to tell you if you are truly over your head, if you could make some budgeting changes to make things better &/or if their program would be an appropriate choice for your family.

I think a lot of times simply getting in the driver's seat will make you feel better. There's a lot of comfort in positive action. Take care of yourself and try to enjoy the pregnancy.

Peg

iVillage Member
Registered: 09-15-2008
In reply to: amc0303
Tue, 09-16-2008 - 9:49am
Thank you for all your support and advice. I have thought over every option imaginable - trust me. I have already looked into my options for my retirement and the only option I have is when and if I leave my job. There is no option for withdrawal or loans. I just need to be out of this mess and ready and prepared when I have another child. At this point, there is absolutely no way that in less than six months, I will be in a position where I can start paying for daycare on top of everything else. So I do feel some pressure to make some decisions now. I cannot afford to put this off too much longer. (No pun intended.) Again, I am fairly certain that my employer would ask me to come back if I gave my notice, but there are no guarantees.
iVillage Member
Registered: 08-22-2008
In reply to: amc0303
Tue, 09-16-2008 - 6:22pm
Have you hammered out a budget?
iVillage Member
Registered: 09-15-2008
In reply to: amc0303
Wed, 09-17-2008 - 8:35am
We have written down all of our expenses and tried to estimate what we spend on food, gas, etc. Unfortunately, there seems to always be something that comes up unexpectedly. Our daughters are in gymnastics and I got a bill for a monthly fee last year that the program forgot to bill me. My daughter needs a flute for school, our car needs new tires, our other car needs to be registered. It's just overwhelming. I try to get only the basics when we grocery shop and use coupons as much as possible. I buy a lot of my kids clothes (winter coats and boots) on e-bay. Now that I am pregnant and need clothes, I have also shopped on e-bay and borrowed from friends. I just cannot seem to make ends meet no matter what I do.
iVillage Member
Registered: 09-15-2008
In reply to: amc0303
Wed, 09-17-2008 - 8:43am
As I said before, If I cannot access my retirement to pay off my credit card bills, when I go on maternity leave this winter, there will be no way I can afford to pay for daycare when I go back to work. I can barely make ends meet now. So, I was considering staying home and taking in some kids to generate some income. My husband is not thrilled about this idea at all. I see it as an opportunity to be home with my baby as I was never home with my other daughters for any extended period of time, make some income and I wouldn't need to send my daughters to camp next summer. I spent over 2300 last summer on camp alone. I just cannot do that again and put a third child in daycare! Has anyone else started an at home daycare that might give me some tips, thoughts, anything?
iVillage Member
Registered: 08-22-2008
In reply to: amc0303
Wed, 09-17-2008 - 9:25am

Have you looked at an alternate budget where you stay home?

iVillage Member
Registered: 09-15-2008
In reply to: amc0303
Wed, 09-17-2008 - 9:41am
I would have a 20% tax applied to the withdrawal right off the top if I were to take my retirement. However, by paying off my cc's I would have over 1000 that I would be saving each month. We do live in a very expensive area. Home prices are averaging 300,000 and beyond. I doubt you could find much cheaper. We own our home (with a mortgage of course) so selling is really not an option because we would not find anything cheaper. I have talked to a credit counselor and my payment each month would be just over 900 so there really is not much month to month savings besides the benefit of paying off debt early. And even in debt management, I cannot afford to put another child in daycare next year. I refuse to even think about bankruptcy - I would rather work five jobs then let my life come to that! I know that things will eventually work out - but it's the getting there and trying to make a decision that is driving me mad!
Avatar for 2locachicas
iVillage Member
Registered: 05-14-2003
In reply to: amc0303
Wed, 09-17-2008 - 10:03am

First off WELCOME!

I would invite you to post your budget here if you feel comfortable. We have all been down this road and could probably help.

I would encourage you to not cash out your retirement. You are really going to need that someday.

My husband made 70k and we were able to pay off 43k in a little over a year. It took some serious hardwork and sacrifices but we did it.

For instance, you mentioned gymnastics. It might have to go for awhile. They won't die without it but it could help pay daycare costs. You need to go to a bare bones budget until you get through this.

You have a great salary and your debt is less than 1/3 of what you make so you can get this under control.

What about moving the money around? Could you get a debt consolidation loan? The payment would be lower. When we were really tight I moved all of our money to credit cards that only paid 2% of the balance as opposed to 3% that is how tight we were.

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