Monday, September 22, 2008

Making a stupid move

OK - I'm about to do something totally stupid. I know it's stupid. I know that all the financial advisers out there will tell me it's a stupid move. But, I'm tired of being "pinched" in all directions.

I've done everything immediately feasible (including moving) to reduce my monthly expenses. I can do a few more once "A" is out of the house (which will be in six months if he gets a job, since that's not likely, it'll be in two months). I can do a few more next year when my "discount introductory rate" for cable ends... well, at least maintain the same "expense", but maybe less features... as I'll switch then to a cheaper plan with a different company for less service - but since I'm getting better features now for the same rate - no sense switching yet.

About the only thing left is to either get rid of my Rav4 (which I'm trying to sell it) and buying a "newer" old car for smaller car payments.... but can't do that until the Rav4 sells.

I've cut a deal with a debt settlement company - all my non-car debts (all that's left) they will help me negotiate down to at least half what I owe... and we've worked out a payment plan that will work for me. I'm leaving out the one that I agreed in court to make a $200 payment every month starting in November (it's only $1200) because that's how I got the court to agree to stop garnishing my check (wasn't in time to stop the panic this last month, but worked for this check); and a handful of bills that are under $200 each. I figure that I can pay off those within three months by scrimping & saving... and then it's only the $200 for a couple of more months.... not counting the $500/month to go to the debt settlement fund (my savings account) to pay off the other debts... which will take three to five years (three if I pay extra into the account... which I'm planning on). WAY, WAY better than the $1500/month that I've been paying to these debts and only getting into more trouble with them being impatient it isn't more. If this doesn't work - then it's bankruptcy.

But, in the meantime? I'm two months behind in car payments... and getting called twice a day about it. They're pretty good about it - I just tell them what's going on and since I'm trying to work a settlement, they've just made notes and let me off the hook. But, I'm not so sure I can sell it... especially for a premium - in Iowa... with an SUV. Good gas mileage for an SUV, but still, an SUV. I am going to call my brother later today - and ask him to "spread the word" - and hopefully talk to my father & other relatives at the family reunion this weekend. Who knows?

Anyway - the way I see it, is that we're basically going to be very, very short of cash for ANYTHING for another four months. And then? I'd have enough free cash to catch up on my SUV payments (back payments)... and actually be in very good financial shape. It's just going to take that long to build up the funds. Unfortunately? Because I'm trying to figure out how I can pay for the back SUV payments and Kyra's spaying... there's no money going into an emergency fund. WHICH is NOT good. And begs the question - what emergency is going to happen between now & January? I can imagine at least a couple. And, honestly? That sucks.

So - the dumb part. I'm going to cash in a small 401K fund from working three years at APAC... it's only around $6K... it's not like I've managed to roll it over anywhere. It's not like it's my only retirement plan. However, I'll be taking a big tax hit for cashing it out. I'll be taking long-term investment funds & taking them to resolve a short-term cash flow issue. Completely wrong by everyone's definition of the 'right way to go about this'. But, it will allow me to catch up my car payments, pay for Kyra's spay, reduce enough of the other debts (perhaps even pay off the $1200 one)... and, more importantly, set up my emergency cash fund. Then, I can focus on perhaps "enhancing" that emergency cash fund for even more bad luck AND I don't have to count every penny ten times as I've got too many bills and too few pennies.

Anyway - that's my plan. Dumb or not... it will help me out. And, honestly? I have so little retirements right now (I know, my bad), that I'm going to work until I die anyway... unless something seriously changes quickly. But, it could mean that if I've got emergency cash fund & lower expenses - I can start raising the percent of withholding for my current 401K plan in January - see? to help start to make up for this loss???

1 comment:

britchik96 said...

You're young enough to take a 6k 401k payout and make it work....and it sounds like it'll dig you out of a hole. For the car, post it on craigslist.org - it's free to post and Carrieanne sold her car in less than a day. Be warned you'll get weirdos...but take cash, be careful and it may be a free way to sell a car. Good luck!