Hey Money Minder,
So, I got canned from my job last year and I’ve been struggling to find a new one ever since. Here’s the lowdown:
- I’ve got a total of $23.2k in credit card debt spread out in different amounts.
- My only monthly bill right now is $560 for health insurance, but I’m working on reducing that.
- I’ve sold everything sellable.
- I’ve got some cash stashed away in savings and checking, plus a decent chunk in my old job’s 401k.
- No student loans or car loans to worry about.
I’ve been applying to jobs like crazy, but no luck so far. Would it be smart to dip into my 401k or should I just keep making minimum payments on my debt? Any extra tips would be awesome.
Thanks,
Struggling But Trying
Response from THE MONEY MINDER:
Hello There,
I am sorry to hear about your situation, but it is admirable that you have been proactive in managing your finances despite the challenges you are facing. Taking a loan from your 401k could be a viable option to help you navigate your current circumstances. However, it is essential to consider the implications of borrowing from your retirement savings, such as potential fees and taxes if the loan is not repaid.
In terms of your credit card debt, your approach of reducing it from $80k to $23.2k shows discipline and determination. It may be beneficial to continue making at least the minimum payments on your credit cards to avoid defaulting while you are without income. If possible, you could prioritize paying off the higher interest rate debts first to minimize the overall interest you will incur.
Given your current financial situation, it might be helpful to explore alternative sources of income, such as freelance work, consulting, or part-time opportunities in your field or related industries. Additionally, consider seeking financial counseling or assistance from organizations that offer support to individuals facing financial hardships.
Remember to focus on what you can control and take small steps towards improving your financial situation. Stay resilient and resourceful as you navigate these challenges. You have already shown strength and perseverance in managing your debt, and with continued effort, you can overcome this difficult period.
Best of luck,
THE MONEY MINDER
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