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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Hi and welcome.
The PP's have given some great advice so far. Like they mentioned its hard to give advice without specific numbers, but here is my suggestion.
Bex -
I would have a 20% tax applied to the withdrawal right off the top if I were to take my retirement.
Just to clairfy, you're going to owe a LOT more in taxes than they withhold.
Jennifer
Hi and welcome
You've received a lot of good advice and I think you need to think really, really hard before you take that retirement fund to pay your current debt.
You've said no matter what you do, you can't seem to make ends meet each month. Tracking your expenses by writing down *everything* you spend every day for a few months would really help you see where your money goes. I was in the same position before I realized I needed to account on a monthly basis for things that get paid annually, like putting $ aside every month for insurance premiums, new car tires, etc...Those things aren't a surprise and we all have the power to plan for them every month so the money is there. I don't mean that to sound like a lecture, it's just that it took me a long time to figure it out (and someone here explained it to me).
What I don't think anyone has mentioned to you is that unless you cancel all your credit cards and other sources of credit when you pay them off, you are very likely to charge them all right back up again **unless** you figure out your current cash flow shortfalls now and act to change them. I know I have done it and others here will tell you the same thing. I will echo the others and invite you to post your budget numbers if you feel comfortable. You will get excellent input/ideas and nobody here will judge you.
How much of that $110K is your income? Let's imagine that you cash out the IRA, and no longer have $1,000 in cc payments.
Are you certain that you can still pay for all necessities AND be putting money aside for savings and emergency funds? A home daycare is a great idea but there are downsides and the money can be unreliable sometimes -- kids leave, etc.
Everyone understands what you are saying, but the question is, What then? What happens after your IRA is gone? Not to mention, with $36K in debt, your withdrawl, after taxes, won't pay that all off. You'd still have around $5k left.
My very first post here was a question about cashing out my 401K to pay off credit cards. Everyone talked me out of it. I'm doing it the slow and painful way now. Like you, I was using the cards when cars needed tires, repairs, etc.
PLEASE PLEASE PLEASE don't touch your 401k there are so many other ways to get out of debt and make ends met. I don't know your budget but I do know one thing when you are expecting your hormones go crazy and some time you don't think straight.
I read all the replies I think I wrote even one myself before now. But when you answered the others I picked up on a few
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