I'm currently looking at a likely (but not guaranteed) layoff coming up in the next month or so, and was wondering how to handle cash vs debt in dealing with expenses while I'm unemployed. I am married and live in a 2BR with my wife and two cats. I am a sole earner.
Summary of my finances:
- $4.6k net income monthly
- 14k cash (more of a slush fund, but I treat it as an emergency fund. It's immediately accessible.)
- $600 CC debt (0% APR card that I'm set to have paid off in June. Promo period expires in Aug.)
- $5K in student loans ($50 monthly payment)
- All other credit card debt is paid in full on statement
Summary of my expenses:
- True needs (Rent, insurance, utilities, groceries, parking, gas): $3.6k. Rent is going up about $350 in June.
- Medical expenses fluxuate but can be as high as $600/month and I'm expecting a large hospital bill for a stay earlier this month that will probably cap my in network out-of-pocket ($4500)
- I have $1.5k in education costs coming up in the next few months, but if I remain employed until June those will be reimbursed. If I get a new job now and leave my current one, I will need to pay back about $7.5k in reimbursements ($0 if I get laid off).
- Including other unnecessary spending that I've been trying to cut down on, I usually have a stagnant in/out.
I'm not concerned about getting a job within 3-4 months after getting laid off as my job title (engineer) is very reliably employable in my area. Last time I switched jobs (2020) it took about 4 months of casual searching. I am concerned about burning through my $14k cash as some bills (rent, medical) are not credit card payable.
Previous advice I've seen on here is to prioritize avoiding debt during unemployment as a 0% APR card will sink you financially if you let its promotional period expire. However, I'm concerned about getting to a point where I have 0 cash and *cannot* pay certain bills even though I am clean CC debt wise.
Appreciate any advice!
original posted by Bitter-Mine2069 to r/personalfinance on Wed, 28 Feb 2024 17:11:40 GMT.