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ok what would you do in this financial situation?

The company my husband works for is slowly laying off people. He doesn't have job security. He still has his job and he told me to pay off our debts which include a few hundred on a credit card and like$500 on a medical loan...our savings account is enough to live off of for maybe 2 months leaving it in tact...should I pay them off or just leave my savings account alone for in case he gets laid off? I know this debt may seem small but its what we have just want some advice ...thanks.

Answer Question

Asked by Anonymous at 12:49 PM on Jul. 21, 2010 in Money & Work

Answers (9)
  • I would leave the savings alone for now. You may need that later on.

    Answer by Iluvmy5 at 12:51 PM on Jul. 21, 2010

  • I would not spend the savings now. Wait and see what happens.

    Answer by Erin814 at 12:54 PM on Jul. 21, 2010

  • I would pay off the debts. It will be less debt to worry about if he get laid off.

    Answer by Cassandre at 12:56 PM on Jul. 21, 2010

  • I work within the financial industry and I would recommend paying of any unsecured debt when possible. If it's only a few hundred, pay that off first while making the minimum payments on the medical loan. Then payoff the medical loan along with the money you applied to the credit card. I'm not sure how much discretionary income you both have every month but with a pending layoff, having no debt makes budgeting a lot easier. Keep in mind, if and when he's laid off, he'll still get a year of unemployment benefits depending on his income level which will be a benchmark to how much he'll receive monthly. Lastly, I would cut out any extra unecessary spending, going out to dinner vs home cooking, movies vs renting or Netflix. There are a lot of cost-cutting ideas you can do to make life less stressful. I hope you find this helpful. Good luck!

    Answer by NikkiVan1 at 1:03 PM on Jul. 21, 2010

  • Why wati for him to get laid off? I have an opportunity that you can work as a couple from home. It can change your life! If you are interested, just ask!

    Answer by Gene_Godwin at 1:50 PM on Jul. 21, 2010

  • I would pay off all of the debt immediately. Then I would make a budget and cut out all of the unnecessaries like cable, lawn service, whatever you have that you don't absolutely need. Start stockpiling away all extra money now. If by chance he doesn't get laid off, then you have some money saved. If he does get laid off, you'll be able to pay the bills for a while longer. I completely recommend that you read the book The Total Money Makeover by Dave Ramsey. He goes over situations like yours in the book and how to get through it. Also there is a great group right here on CafeMom called Dave Ramsey Fans. Join the group and ask for suggestions, you can get a lot of perspective on there.

    Answer by slw123 at 2:23 PM on Jul. 21, 2010

  • He needs to get moving on his job search. There are lots of great tips and resources in the CafeMom Job Hunting Moms group. If you have any questions about searching, resumes, interview prep, networking, etc., send me a message. I do career and job search coaching; I never charge CafeMoms (or Dads)for my services.

    Answer by rkoloms at 2:29 PM on Jul. 21, 2010

  • Keep the savings - what if you need to buy essentials?

    Answer by tasches at 3:48 PM on Jul. 21, 2010

  • Definately pay off the credit card. That way you have that available credit to fall back on, but if you fall behind in the payments and they cut off the card, then you no longer have that as an option. Call the doctor/bank that has the medical loan and explain what is happening and ask for a couple months to get back on your feet. See if they will either waive payments for a couple months or if they will except a lesser amount. Most people will work with you if YOU make the 1st contact.

    Best of luck to your DH in finding a new job quickly.

    Answer by Maureen-MD at 9:09 PM on Jul. 21, 2010

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