Depressed
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Depressed
| 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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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
Hi There,
Everything
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
Have you looked at an alternate budget where you stay home?
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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