Good luck, and welcome!

100 hours is about 2 1/2 weeks of vacation time. In trade off terms, that’s a pretty nifty trade to swap 2 1/2 weeks of your time and be debt free except for the house.

Having said that, when DH was let go from work in February he had just over 2 months of vacation. Between severance and vacation, we came away with almost 3 1/2 months of savings….and we needed that cushion to live on.

If you have extra vacation time beyond the 2 1/2 weeks, I’d say cash out the 100 hours. If you don’t, but your work allows you to switch shifts with someone in the event an emergency comes up, I’d still say go for it. Personally, I’d rather work for a year to accrue more vacation time than spend that same year (or more) paying off the car, especially when you could be debt free in the time it takes you to get the check from your company.

For me determining when to pay off would depend on a few things

Such as how much I make each month, how long it would take me to pay off the loan under it’s current terms, am I able to put more money into the loan each month, how much would 100 hours of vacation would reduce my debt, will I need that vacation time for anything else (like sick time, personal time, bereavement, etc..) would it make more sense to cash out some but not all….

I may have a differing opinion than others here. I think others would say do whatever you can and pay it off. And while I agree with it to a certain extent, I can’t follow everything MC says since some of his advice isn’t relevant in my world.

I hope I didn’t confuse you more.

My name is David, I’m a nurse from VA

I discovered MC Blog about 18 months ago. I’ve read TMMO, listen to his show almost everyday, but have not taken FPU.
Here’s my question:
Currenlty my only debt in addition to our home is my car loan. It’s $8600 with a rate of 4.9%. My employeer gives my the option of cashing in unused vacation time at 90% of our hourly rate. So my question…would it be worth cashing in about 100 hours to pitch at the car as a snowball? Or would I be losing 10% to save 4.9%?

Wow, I had a very similar situation with my son

I had to sue because of my son’s age. I had no choice. So you know who made money off that deal? My lawyer’s office. However, his staff did an excellent job. My health insurance paid for most, but because it went to lawsuit, they wanted their money back. Because the expenses were more than the lawsuit, they agreed to not pursuit any of the settlement, so that worked out.

So please, make sure the atty is pushing for them to (there’s a legal term for it, but I’m not sure what it is) not get their money. Of course they want their money back, but by the time your lawyer gets 1/3, there’s nothing left. As far as I know, my health insurance did not get reimbursed out of the settlement.

Sounds like it’s a done deal for you and your son. I hope he has no issues from this, and all is well. I opted to save his settlement for him until he is 25, instead of 18. I wish I could have held it back until he was 40!!!

Here are some more facts to make things more clear and maybe it will help

I won’t be paying a penalty for taking the money as we can get around that because it is a hardship withdrawal due to total disability. So that is a non-issue.

Also, income taxes will be very low due to income not being what is was. ; )

If we own a home we will qualify for tax breaks on money spent for retrofitting and can qualify for grants for certain items for our home up to 80% of their cost. The more I look at this the better it looks. I am certain that the financial benefits of owning and qualifying for breaks will far outweigh any income tax burden placed on us by taking the 401k money.

Also, I have looked into the particulars today and think if this was a plan to go with that I could take a loan on the 401K at 2% interest for up to $20,000 and then only take $20,000 hardship withdrawal. Houses here are actually undervalued and this makes buying a good deal. This would cost me a lot less in income taxes and would have me paying myself back at a very low interest. I would have to play with the scenarios to see which on works in our favor.

Quite honestly I don’t have any real solution other than to buy a house. Renting isn’t something that can be done. It sounds good but in reality it doesn’t work. I wish it did, then I could just leave everything alone. I am really trying to think of reasonable workable solutions.

In short, if I take money from 401K to buy a house I will incur no penalties or taxes, I will own a house outright and I will be able to re-fund our 401K in less than 5 years.

If we don’t buy we will not be able to find a suitable home to rent and we will have to consider placing her in an institution. We would not own a home and would pay rent forever (or until we can buy again), but we would have an intact 401k although without any additional contributions.

When I put it down like this all I can see is that at the end of 5 years I will be in a much better place and we will be able to be a part of our daughters daily live if I take money from the 401k.

Does this all still sound crazy ? Before this all happened when we were working our steps and paying down our debt snowball following each and every step in order make sense to me and since Dave’s plan was working so wonderfully for us I really wanted to stay on track with the plan but I am having trouble now because of our unique circumstances.

Just something to keep in mind

My only concern about pulling 401k money to buy a house or pay debt etc is from personal experience years ago when hubby lost a job and we pulled some 401k money and I learned a lesson months later. Money taken out of a retirement account not only gets the penalties, but also becomes taxable. You said hubby makes 60,000 a year—if you pull 50,000 out of 401k—they will charge you the penalties as you pull it—but then when you file your taxes—-it as if you made 110,000 this year. This could bump you into a higher tax bracket. It could also affect what you can itemize and claim, etc…..

Not a good plan for a home purchase

Robbing your 401K – which a bankruptcy doesn’t take on purpose because its important to have a retirement plan – is not the choice you want to make. Not to mention the 40% penalty you’ll acrue. If you have 100,000 in your 401K – you’ll walk away with 60,000. You’ll never conceivably make up that 40,000 loss.

I’m sorry I haven’t thought of a solution for you – I read your e-mail early this morning and I don’t usually like to write an answer without a workable solution but I thought it important that I stress how bad your plan is. I read your plight on renting and the need for accessible housing, but I don’t have a good answer for you.

What do you all think is a good age for children to

experience Disney for the first time? When they will remember their time, and enjoy the rides and other attractions?
How much in advance can you plan and make payment arrangements on the trip?
Wanna take my Pinky… Don’t mind putting it on the books now for 2020 (or some other year) if Disney will let me. Especially if I can lock in today’s rates for future years trips.

I took Hillary when she was younger (around 4)

and she doesn’t really remember that trip. She was old enough that we had to pay for her so I imagine she was around 4. I was probably too green to even pay attention to fear of crowds or characters so I never had those issues with her. Its what happens when you go to Disney 🙂 We still don’t have fear of crowds, actually go to them – Times Square ball drop, Inaugurations etc…

BTW

if you don’t like the plan option that you chose initially, you can change the plan to any of the other offerings, as many times as you would like.

I got a job today

It’s 8 hours a week at $12/hr. It will give us a slush fund emergency fund for the time being. Things are tight right now, but it’s going into savings and I’m going to scrimp and squeeze the budget. If things get better, I’ll start up our FFEF savings again and funnel my work money into a vacation fund. Either way it’s income and we can use it as we see fit if necessary for living expenses!

I’m excited to be back in the paying workforce after 13 years of being a stay at home mom!

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