“Dear Steve,
I am 50 years old, divorced single mother with 3 children. Two of my kids live with me (ages 15 and 18) and the 11 year old lives with ex-husband #2 but she is with me quite a lot. I live in Orange County, CA and up until now was a responsible bill and rent payer even though vicariously juggling during this time of unemployment. Events leading to my present situation:
I felt fairly secure in my job of nearly 6 years when unexpectedly I was laid off in April 2009 due to the economic downturn. So of course I went on unemployment immediately. I received the maximum amount of $448/week but that only covered rent and car payment. Scant child supprt helped keep the utilities, food etc going.
I was applying and applying for jobs without results until finally in August 2010 I landed a temp job which ended in January 2011. Went back on unemployment where I left off and then came to the end of tier 4. Hoped for more but got a letter telling me that a new claim had been filed based on the temp job therefore I was ineligible to collect Fed-ED.
So that was that. No job yet and no money coming in. Had to charge my rent on credit card a couple of times previously. I do realize rent is the major cause of my debt and why I am at the brink of financial crisis but moving is expensive too so I’m not sure what to do.
In essence, I can’t afford to rent but I cant afford to move unless I use the last of my savings for that. I took $1600 out of my $5000 mutual funds to pay July rent but don’t have near enough to cover August unless I take another $1600 of my now $3000 savings. I was supposed to sign a rental lease at the end of July but land lady is understanding and put me on month to month to avoid potentially breaking the lease.
Had a hopeful job interview last week. I knew they liked me and all went really good. I was praying and thinking boy wouldn’t that be a miracle if I could pull a rabbit out of my hat and land a job at the last minute so I didnt have to lose my place, etc.
But today I got the old “we regret to inform you” email telling me I didn’t get the job. I called my interviewer and she said she really liked me but lacked the experience they needed.
Meanwhile I was still applying to other jobs including lower paying like CVS drugstore but havent heard back from any of them. Never in my life have I had such a hard time finding a job! This whole process and the length of it is getting the best of me and very draining both physically and mentally to say the least.
Family support has pretty much been non-existent. My dad and brother aren’t being particularly helpful with advice or otherwise, especially my dad. Today I was thinking maybe I could try selling my car, a 2007 Hyundai Tuscon, to pay off the loan of around $9000. I looked it up on Kelly Blue Book and that says the car is worth around $12,000 in fair condition.
However I’m not sure if that takes the smashed fender (thanks to my new driver daughter) into account or not. Actually the payment havent been bad at $300/mo and 0% financing but with no money coming in and no job prospects, a repo isn’t something I need while trying to keep my credit as intact as possible thorughout all this mess.
Hyundai does offer a 3 month deferment period on making the payments to pay it off at the end of the loan but how do I know if I will have a job or where I will be in 3 months? I do still have my old car a ’93 Mazda MX6 was keeping it for my kids to drive and havent gotten around to selling it. Not worth much anyway. So if anything I guess I wouldn’t be without a car if I did sell the Hyundai. I’d just be stuck with an old car that needs alot of repairs, smog check etc.
Anyway, I guess the big question that spawns all the smaller ones is what is the best use for the last of my savings?
- Main question: what is this money best used for?
- I have $3000 left in “savings” i.e. mutual funds. It was $5000 before I took out enough to pay July rent. Bills are lapsing and not enough for August rent.
- Do I sink $1600 of my savings into another months rent when the prospect of finding a job within that time is bleak?
- Do I try and sell my car to pay off loan or do I take the 3 month deferral option Hyundai offers?
- How do I make payments on credit cards and other bills when the little money I have is to put towards the rent even though it’s not nearly enough
Kristen”
Dear Kristen,
My dear you have just officially hit the proverbial wall.
Through a series of truths and consequences you have finally reached the end of the line and you will have to go all in to move forward or run away to live to fight another day.
Regardless, it’s time to visit Benefits.gov and find out what public assistance benefits you are eligible for. This would include the SNAP program (food stamps).
I went to that site and answered all the questions I could just based on the information you gave me in your question. As you can see, initially it says you are potentially eligible for 129 public benefit programs.
The more you can avail yourself of those benefits, the longer your limited cash will last.
I’d set aside the next two days to do nothing but apply for every program you are eligible for.
The time has come to only pay what is essential, this probably does not include any unsecured credit for you.
Here is what the California Food Stamp Program says about eligibility.
General Program Requirements
In order to qualify for this benefit program, you must be a resident of the State of California and fall into one of two groups: (1) those with a current bank balance (savings and checking combined) under $2,001, or (2) those with a current bank balance (savings and checking combined) under $3,001 who share their household with a person or persons age 60 and over, or with a person with a disability (a child, your spouse, a parent, or yourself). For either group, you must also have an annual household income of less than $14,079 if one person lives in the household; $18,941 if two people live in the household; $23,803 if three people live in the household; $28,665 if four people live in the household; $33,527 if five people live in the household; $38,389 if six people live in the household; $43,251 if seven people live in the household; or $48,113 if eight people live in the household. For larger households, add $4,862 for each additional person in the home.
We need to draw a line in the sand by which time you will have secured some employment or you have found a friend or family member that has a place to take you in. You might want to set that line 30 days out from where you are now.
Frankly, if you spend all the cash you have and don’t have a place to live, you will become homeless unless you can find a local shelter to take you in.
It is also probably time to send the 18 year old out to find a job as well to help contribute to the situation.
I’d take the three month extension on the vehicle and get as much use out of the truck as possible. Handing it back now or then is going to have the same end result, a big deficiency owed when it is auctioned off.
The goal here is not to scam your creditors, it’s to give you every waking moment and possible opportunity to find any job. Heck, even apply for all the local SnagaJob.com listings.
Without income your bills will fall behind but when you get back employed and on your feet again we can deal with the residual mess now.
I wish there was a magic wand to wave but the closest I can get is the application for government benefits
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Steve, thanks so much for responding to my questions. Already receiving food stamps so we are eating better then ever. I guess I should call the credit card companies as well as utilities and hope they are understanding about my dilemma. Problem is RENT and still no job. Landlady is being very understanding but this is the first month I have actually owed on rent. Took some more money out of my mutual funds and some out of my sons but still won’t cover what I owe. Going to get 1 check tomorrow and waiting til I have some money in hand before I talk to landlady again.and I can’t afford to pay all of it. It’s like the job hunt has taken a back seat to trying to figure out what I’m going to do or where I’m going to go when time and money are running out. Once again, wondering how to best use that cash. Whether or not to hand it over to pay what I can on this months rent and probably not have enough for next month. Or give up on throwing money into this place when job prospects look bleak and use the money to put my stuff in storage and move on to God knows where. Weird. I feel like I am watching my own death approach in a way and have little control to stop it. I keep playing it day by day and hope things will get better.
Thanks again, Kristen