I was laid off from my job 6 months ago and have struggled to find employment since then. I'm a new (single) homeowner who was nearly paycheck to paycheck before losing my job. Since then, I have tightened up financially and have even taken on a roommate, but I have exhausted unemployment compensation and I'm nearly at the end of my rope financially.
I have enough money to pay my mortgage and utilities next month, but not my credit card debt. After mortgage and utilities, I am completely out of money.
**The rub:** I have over $60k in a 401k that I can draw from. I know there will be a penalty but I consider this an emergency. I also have great credit and could probably get a personal loan if that makes more sense, but I'd just be taking on more debt. I need cash to hit my bank account which means opening another credit card that has an interest free period is probably not an option (and there's also penalties for transferring balances from other credit cards from what I understand.)
I am not anticipating being unemployed too much longer, in all honesty. I am at the point where anything is better than nothing. I had wanted to stay in my field but have received hundreds of rejections and have not had luck. It's definitely a failure on my part for letting things get this bad, but I appreciate any general advice you might have for me.
Unemployed, out of money, and out of time. Need to figure out the next steps.
byu/Exalted_Crab inpersonalfinance
Posted by Exalted_Crab
13 Comments
Yeah eat your pride and go work fast food while applying to jobs in your field, including jobs in your field that is lower in the ladder than your old job title. Fast food money is still money to make minimum payments. It can buy you some more time to find job.
The only thing to do is get any job you can while still putting in applications.
If you have home, find another roommate or maybe Airbnb it. Then secure for another month payment for mortgage and CC from 401k, then keep applying for jobs(same field or different, visit local job offices as well, I got me temp one when I crashed). Withdrawing without having job is the worst thing, it’s just wasting it while thinking like oh I got interviews so I might got a job next week, then over spend. I had last resort savings like 2k and homeless, and 6 month unemployed. When I withdraw the 1k I had 5 interview lined up, all failed and the 1k gone in 3 weeks. I stop buying anything and donated plasma to get bus pass for job interviews, untill I secured one, then kept donating untill the start date, then withdrawn the 1k. So basically don’t spend when you don’t bring any $.
Can you do uber? Can you bartend? See if Costco is hiring? They pay like $20/HR and full benefits
Can’t speak for whatever area you are in, but in the NE, there are always warehouses hiring. Most pay $20+ an hour and pretty much guarantee a 40hr week plus OT. It’s not the best long term solution but can provide a steady paycheck until you get something you actually want to do. Def check with local employment offices, as most have hiring events that occur pretty regularly and a lot have same day employment offers.
“Completely out of money”
*Has $60k in a 401k….*
You are not out of money.
One should only plan for the future when they have the present under control. Don’t buy into the “retirement” myth anyway.
Might not be a bad idea to start talking to a realtor or your mortgage lender about options. Also your credit cards might allow you to defer payments for a bit. Things like insurance and taxes you HAVE to pay.
Don’t be house-poor. Can you rent out the rest of the house and go live with family until you’re back on your feet? Taking on debt is a never-ending cycle, wouldn’t recommend going that route. If possible, avoid touching 401k (I think there might be a hardship provision in there, but not worth it). Any gig work you can do part time to cover bills and utilities in the meantime? Cutting alone is not enough, you have to also earn something.
You need some kind of income while looking. Even if you have to take on something that isn’t in your field. Unsure of what you did before the layoff but can you freelance?
I would pull from the 401K as a last resort.
Balance transfer on CC debt is fine. Transfer fees are generally 3-5%. Much lower than the interest fees.
It’s unlikely you would be able to get a loan without a source of income.
Try a temp agency. It isn’t much but jobs are just that temp jobs, and if you get an another job offer yu let them know, they’ll be happy for you! And someone else will likely fill your spot the next day.
People can advise against it, but you could look at your six months of expenses, cash out your 401k and pay your bills 6 months ahead.
Not every one is going to live long enough to use their retirement income, you should survive now, get a job and contribute more later if you’re worried about it.
I would suggest getting any job you can rather than drawing from your 401k. Another option is to sell your house. It sounds like you can’t afford it if you were living paycheck to paycheck before you lost your job.
Pharmacy tech is an entry level job and big chains are always hiring. It’s a bit better than fast food pay in some places
When I was having a hard time I was able to borrow from my own 401k. Something like 50% of the balance, and if paid back no penalty. Of course you lose out on growth. I think the other suggestions of getting any kind of employment in the interim are better, but if your plan allows it and you’re able to pay it back, a better option than withdrawal.