Alright so, as the title suggests, I’m in a bit of a predicament. I lost my job a week before my wife and I got married and have thus lost my major source of income at a very expensive point in our life.
Thankfully, we have some cash savings so we’re able to continue paying rent (on paper we have 11 months banked but with other expenses it will come out to be less). We built up this cash and hoped to put a lot of that towards our credit card debt (mostly from wedding expenses) immediately after the wedding. Now with no paycheck (but some good prospects), I’m not so keen on making a huge payment on the credit cards as the cash is our safety net.
Obviously we are getting hit with interest on the cards. But now that it’s a new tax year, we were considering selling some stock from equity rewards that we have to free us of debt. This is money we had earmarked for a down payment on a home in the distant future, or some other big expense, but the stress of this debt is starting to get more and more crushing. And of course the interest is adding up.
On top of that, our COBRA fees for insurance are $1200 a month which puts an additional strain on our resources. Unfortunately, I am likely going to need surgery in the next few weeks, so this is a necessary expense to avoid paying out of pocket.
Is selling this stock a good idea?
Should we wait to see if one of these jobs comes through before any major move?
Should we just keep paying the minimum to keep us afloat?
TLDR: lost job right before wedding, wondering if we should sell stock to cover credit card debt
Debt: approx. $60k
Savings: approx $40k
Stock: approx $70k
EDIT: should also note that the wedding has come and gone, so canceling the wedding is no longer an option. With this all happening a week out, we wouldn’t have been able to save much money anyway per the vendor contracts etc.
There is not enough concrete data to provide tailored guidance.
Please consider providing an expected budget.
List all sources of income
List all sources of expenses. EVERY SINGLE ONE. Include the debts line by line and interest rates.
Then include sellable assets such as your stock.
Without clear data, your guidance will be generic. Likely it would be reasonable to sell assets to avoid high interest debt. But it would be far wiser for that to be part of a larger plan to move forwards.
*edit: OP, from your responses and edits, it’s quite apparent that you do not have a budget. I would highly recommend you spend the time/effort/energy compiling this before executing any plan. The budget is to allow you to anticipate projected issues based on past expenses. Without this, it is difficult to provide responsible guidance to help you move forward.*
What is your wife’s income? Are you able to get health insurance through her employer? If she isn’t employed, why not? Is she also looking for work?
Like another commenter said, I don’t think we have enough info re: your sources of income, debt, and interest rates. Also makes a difference what industry you’re in, as many industries are so short staffed you could have another job tomorrow.
If historical values show any indication of future results, your stock investments SHOULD return anywhere from 5-10% this year.
Your credit cards are probably charging 20+% in interest
Yes, Pay off the cards. That creates a snowball effect.
Of course you should!!!! Credit card debt is a financial emergency.
Pay the credit card debt, it adds up faster than any investment could.
Make sure you read up on your unemployment benefits. In some states there are programs that pay for your Cobra expenses. I was unemployed twice before, and went uninsured the first time, but realizing my insurance was effectively free. (This was Massachusetts).
You put 60K on credit cards for a wedding??????
I am sure you can find another job, but your personal finance skills are literally as bad as they could be.
While you look for a job, pay the minimums on your credit cards. Cancel all luxuries. Don’t eat out. Don’t buy anything.
When you find the job, put every penny into those credit cards.
And then seriously cut them up and throw them away.
60K on credit cards for a wedding, holy cow man
Cancel the wedding and just go to courthouse? Between not having a job and Covid, it seems like the prudent thing.
I lost my job about three months before proposing to my wife. But I immediately got a well paying contract with one of our former customers. I was paying COBRA. I proposed to my wife and lost my contract the next week. My now wife suggested we don’t have a wedding in six months and instead go to the courthouse to both save money and so I could get on her insurance.
You may find these links helpful:
– [Leaving a Job](https://www.reddit.com/r/personalfinance/wiki/leaving_job) (resigning, quitting, fired, laid off, etc.)
– [Job Loss Megathread: unemployment resources, state-specific information, and help](https://www.reddit.com/r/personalfinance/comments/fkyu8h/job_loss_megathread_unemployment_resources/)
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COBRA you can pay retroactively, you have 60 days to elect COBRA coverage and then 45 days after you elect to participate until payment is required for that first month. So, there’s some breathing room for you there. Obviously, you can’t schedule your surgery and you don’t want to need a doctor or hospital without coverage. But if you can avoid needing any medical services, definitely avoid paying for that.
Chances are very good that you’ll have another job within that time period. And chances are also very good that you’ll be eligible for medical benefits without a waiting period when you’re hired.
If you do need to sign up for cobra, you will need to pay for it for the entire time, you can’t put it off for two months and then start paying only for that second month and the ones after, you’ll have to pay retroactively for both months.
I don’t think “exclusion for pre-existing conditions” is a thing any more. (Thanks, Obamacare!) So there’s no downside to having coverage lapse between jobs.
So maybe it seems a little less dire without that $1,200 a month to worry about immediately.
Other than that, you’ll want to pay at least the minimums on cards until you have money coming in again.
Definitely apply for unemployment insurance, assuming it applies to you. (You we’re not fired for cause, you were employed sufficiently long at this job.) In my state it’s capped at about $250 a week, which ain’t much, but it’s still way better than nothing.
Congratulations on your wedding, and on your upcoming new job!
First look into welfare benefits that are income (not asset) based. I was able to get free med ins for everyone without needing to pay crazy cobra premiums. Add this to unemployment and SNAP benefits and there was less strain on our cash. At first it was humiliating for me to apply for these benefits even though I had never once used them, but this is what they are there for.
Really take this opportunity to tighten up your budget. I saved hundreds a month just cleaning up subscription services, phone costs, shopped auto and home insurance, etc.
I’d balance paying debt and preserving enough cash. Cashing in equity grants is fine just be aware of potential tax liabilities., but I’d suggest giving the job prospects a little more time. Good luck.
What kind of job did you lose? The job market is hot right now. If you have relevant skills, I doubt you will be unemployed long
having cash to avoid getting evicted is sometimes more useful than paying off credit cards. Also the credit cards can be used in an absolute emergency, so cash you use to pay them off can somewhat be recovered.
I dont fully understand your stock situation, is it stock that you have been granted? If so then you have already paid tax on it right?
Ultimately rent cant be paid with a credit card (usually) so I would keep enough cash to pay the rent for say 6 months. I would use the rest of the cash to pay the credit card (20K). I would then sell or borrow against the stocks to pay the rest of the credit cards.
Once you have done that set a budget to reduce other spending to zero. Cancel all subscriptions, make all your own food instead of eating out etc.
Immediately start driving for uber, amazon flex, etc to get some immediate money coming in.
I dont think you are in that bad of a situation since you have the money to pay for the debt.
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