Help me decide what to do re: debt/savings/separation/divorc

[jlt19]

I'm not sure what's happening in my personal life, but I'm planning for it regardless. At this point I'm just looking at separation and how that will look. Basically I'm trying to decide if I should drain my savings to help free up monthly money or not.

Loan 1 is $750/month (so $375 would be mine) and is 3.99% due to be paid off Feb 2022. Balance is roughly $12,000
Car Loan is $280/month (my car) and is 3.99% due to be paid off 11/2023. Balance is roughly $10,000
Student Loans haven't begun yet, but probably will come January. Estimated $370/month for 10 years. Balance is $33,500 at 6.6% avg

Efund is around $16,000, in the market and doing well
I do have $18,000 in the market that is technically SL money (reimbursed from my work-didn't put towards loans, long story) but that's just the amount in there TODAY. I put in around $22k, so have lost $4k, so i'm hesitant to sell now. 

To add insult to injury (to me, I get I've been VERY lucky), I'm going to have to start paying, for the first time in my life, for health insurance premiums in April 2021, and that will be around $300/month for me and half of the kids portion.

So, nearly $700/month I'm not used to paying out and a total of $1,025 in just loans. Ew.

So, WWYD? Obviously I only have "access" to half of the efund, so combined is $24,000 available but only owe half of Loan#1 so about $49,500 in debt (OMG).
1. Pay it all towards SL prior to repayment, leaving me with $110/mo payment for 10 years ($765/mo for a year, then $480 for another, then just $110)
2. Knock out other two, and either keep extra in efund or pay down SL a bit, leaving me with roughly $300/month payment for 10 years.
3. Just take out from the market when monthly payments are due? 
4. combo? 

I haven't paid any of these off yet b/c all the money has been in the market and doing well (sans SL $) so I'm reluctant to pull it. But, I have no idea what my tax situation will look like this year or next b/c of the marriage and a lot of unemployment and an untaxed settlement. 

I would love to refi the SL's, but then they wouldn't qualify for the relief, plus I've only been in my job since June, so probably can't.  I'm about to be paying my large mortgage solo, so that's why this is all concerning me. I honestly don't have enough income to pay for everything unless I quit my IRA contributions which I guess I could. 

Ugh, has anyone ever said Fuck 2020?

[lemoncupcake]

So you don't have any chunk of savings in a FDIC insured account? I would do that, honestly - you need stability and security, and it makes me nervous the possibility of having your entire savings wiped out if the worst happens.

When you put together your monthly budget with the new insurance payments, can you cover the loan payments? Pay any extra? Or will you be in the red each month?

[sadlebred]

For now I wouldn't do anything. Continue to pay as you are. Think about what you might want to do but hold off until any divorce is finaly. I would NOT drain your savings. You don't know what will come up between now and then. I think you should leave it where it is and bring the $18,000 into a plain old boring savings account or a short term cd where it will be safe.

[wanderingback]

I wouldn’t drain your savings.
Since covid started I’ve been hoarding money and not aggressively paying off debt.

When I separated from my exH I actually agreed to take over paying off our 1 credit card in exchange for him essentially letting me take all of our savings. To me it felt much better to have that cash if I needed to knowing I’d eventually be able to pay off the credit card. No regrets for me.

[wildrice]

I would not drain your savings, and I agree with moving your money to cash savings. I don't really know much about the stock market (the only investments I have are for retirement) but would it make sense to cash it out NOW before the election? I don't know how they are predicting the next few months will affect the market.

Since you mention student loan forgiveness, does that mean you are planning on an income based repayment plan? Can you choose the plan that only requires payment of 10% of your disposable income? With 2 kids I would guess your payment would be less (unless your income is higher than I seem to recall you saying). If you legally separate you can have your payment based on only your income instead of your joint income. If you plan to do loan forgiveness, I don't think I'd rush to pay off the loans.

Will the health insurance be pre-tax through your employer? If so, that saves you a little bit.

How much is your car worth? Would you consider instead of paying off the loan, selling the car and buying something outright with whatever you get from the sale (and/or maybe adding a couple thousand dollars from savings).

[jlt19]

Oct 29, 2020 16:09:54 GMT -5 lemoncupcake said:

So you don't have any chunk of savings in a FDIC insured account? I would do that, honestly - you need stability and security, and it makes me nervous the possibility of having your entire savings wiped out if the worst happens.

When you put together your monthly budget with the new insurance payments, can you cover the loan payments? Pay any extra? Or will you be in the red each month?

We did have money in regular savings but purchased new floors this summer and just had to replace our water heater. I could have pulled the money from our mutual funds, but they were all down because of covid, as was savings rates, so it seemed like the best choice at the time.

With insurance and such, I can cover everything if I stop the $500/IRA contributions. This also doesn't take into account any sort of child support I'd be entitled to. So it is possible that it will all work, but there would be no extras for a long time.

Of course DH is saying he'll do all he can to help me stay in the house but who knows how long that may last. Though his dad gave his mom the world and then some after his affair so he does have that "example" to go on...

I just wish I could be decisive about SOMETHING. Do I want a divorce? Do I want him to move out for a bit? Do I want him to take a poly? What should I do with my money? And then of course there are 899 follow up questions for each. I want to crawl in a hole for the next year.

[jlt19]

Oct 29, 2020 18:49:45 GMT -5 wildrice said:

I would not drain your savings, and I agree with moving your money to cash savings. I don't really know much about the stock market (the only investments I have are for retirement) but would it make sense to cash it out NOW before the election? I don't know how they are predicting the next few months will affect the market.

Since you mention student loan forgiveness, does that mean you are planning on an income based repayment plan? Can you choose the plan that only requires payment of 10% of your disposable income? With 2 kids I would guess your payment would be less (unless your income is higher than I seem to recall you saying). If you legally separate you can have your payment based on only your income instead of your joint income. If you plan to do loan forgiveness, I don't think I'd rush to pay off the loans.

Will the health insurance be pre-tax through your employer? If so, that saves you a little bit.

How much is your car worth? Would you consider instead of paying off the loan, selling the car and buying something outright with whatever you get from the sale (and/or maybe adding a couple thousand dollars from savings).

Who knows what the market will do at this point. It's down right now because of the lack of a stimulus and cases rising.

I won't have loan forgiveness, I was just talking about the relief we're getting because of covid right now. But I didn't even think about income based repayments. I will definitely look into that, thanks!

Health insurance will be pre tax and I'm considering an HSA but that depends on which plan I choose. I've never had to do this before since my union insurance was one size fits all.

I didn't even think about selling my car but that may be an option as well. Thanks for the ideas!

[lemoncupcake]

Oct 29, 2020 18:53:54 GMT -5 jlt19 said:

Oct 29, 2020 16:09:54 GMT -5 lemoncupcake said:

So you don't have any chunk of savings in a FDIC insured account? I would do that, honestly - you need stability and security, and it makes me nervous the possibility of having your entire savings wiped out if the worst happens.

When you put together your monthly budget with the new insurance payments, can you cover the loan payments? Pay any extra? Or will you be in the red each month?

We did have money in regular savings but purchased new floors this summer and just had to replace our water heater. I could have pulled the money from our mutual funds, but they were all down because of covid, as was savings rates, so it seemed like the best choice at the time.

With insurance and such, I can cover everything if I stop the $500/IRA contributions. This also doesn't take into account any sort of child support I'd be entitled to. So it is possible that it will all work, but there would be no extras for a long time.

I'd put the savings into a more secure savings account but don't pay off any of the debt from it now - live with your new budget, paying the standard payments, and you can use the savings if you have a tight month. If you use all of the savings to pay down something, you don't have wiggle room if something comes up. 

And if you cut the IRA, are you doing retirement savings elsewhere - like a 401k? I'd be hesitant to cut that completely but if it's what you have to do, it's what you have to do.

[dochas]

You mentioned an untaxed settlement. If you think you will be getting a big tax bill, I would hold off on paying anything else down. For the money in the market - do you own different individual stocks and funds? If you think you will be liquidating at some point, I would start keeping a close eye on it and start selling slowly at the right times.

[jlt19]

Oct 30, 2020 9:48:24 GMT -5 dochas said:

You mentioned an untaxed settlement. If you think you will be getting a big tax bill, I would hold off on paying anything else down. For the money in the market - do you own different individual stocks and funds? If you think you will be liquidating at some point, I would start keeping a close eye on it and start selling slowly at the right times.

I do have money in a CD that will be used for tax purposes (not mentioned here yet) because of my uncertainty on what the bill will look like. But that's only 1/3 of the settlement so who knows how other tax things will work out (sales of stocks/funds etc).

Money in the market is in both funds/etfs and individual stocks. Stocks were bought low with the hope/plan for them to increase when things get back to normal someday (bought AAL, GSK, AAPL, FENY for this. ETF's are all well diversified, but I sold when they were up big and have now rebought in, so no big gains there yet).

The school money is half sitting in cash in my Fidelity though, so that will be easy to pull but half is in a pot stock. Which I KNOW is dumb and I made some bad moves early on and tried to "make it right" by averaging down. Now, to break even, it really doesn't have too much further to go up, and the breakeven point was well below it's bottom pre-covid, so it definitely could rebound to that "new" normal low. But of course, there's no guarantee the company survives this...

I just started a 401k in June (old job didn't have one) and I put in 6%, employer puts in 4.5%, as well as contributes to a cash balance account on my behalf. My last job was a defined pension plan, so I can't pull it out, but I should have a guaranteed $2k/month for life once I am 65. I just started to max out my Roth again, so it's not in super shape ($100k or so). I will most likely get a 2-3% raise in January and had planned on putting half into the 401k. DH just got a 10% raise in September, so if that keeps up, he'll massively out-earn me in no time. As of today we're at $65k (me) to $69k so it's negligible. 

[sadlebred]

Is there any chance you could get alimony/spousal support since your STBX-H out earns you? This is in addition to child support. That is something to factor in as well. I'd ask your attorney.

(In my state, it's VERY hard to get alimony if you earn a "living wage" even if your spouse makes 2x what you do UNLESS you can prove infidelity, abuse, or extenuating circumstances.)

[dr.girlfriend]

I'm so sorry you're going through this. I would tend toward leaving everything in place until the divorce is settled and then making financial decisions accordingly.

[jlt19]

Oct 31, 2020 14:20:03 GMT -5 sadlebred said:

Is there any chance you could get alimony/spousal support since your STBX-H out earns you? This is in addition to child support. That is something to factor in as well. I'd ask your attorney.

(In my state, it's VERY hard to get alimony if you earn a "living wage" even if your spouse makes 2x what you do UNLESS you can prove infidelity, abuse, or extenuating circumstances.)

Possibly? I actually have a consult with an attorney tomorrow so I'll ask about that. I know Missouri is a no fault state, so I'm guessing the infidelity won't matter. But even with any sort of child support, it would help immensely. 

I did some refi calculations and there was one I qualify for alone that's fixed 3.49% for 5 years and $600/month. I ran some numbers and my current loans have me paying $655/mo and that's perfectly doable. If I use the SL$ to pay the difference until the other two are paid off, I'll have only "used" $12,525 of the SL's and cut the interest paid by $10k. 

This will also be a few months before DD turns 16, so free up money for helping with a car. I think I'll just hold off until the silly government decides what to do about SL's and if/when it's obvious that I'll have to start paying again, I'll refi and start that process. 

Thanks all for all the ideas. It helped me think it all out and try different scenarios to see what will work best. 

[kittycatlove]

jlt19, we split all costs related to DS in a 60/40 (me) split. My attorney worked this up based on our incomes. So I get 60% of insurance premiums (I carry DS on mine) as well as any extra curricular and such. When you talk to your attorney make sure you discuss how to split these costs. This is in addition to the child support I receive.

If you have any questions or want to chat let me know. Hugs.

[ssmjlm]

I just want to reach out and give you a hug.

I wouldn't do anything until the divorce is finalized. And honestly, I would go after anything you can and then once in hand, use that toward debt. I don't care what your state says, I would hope your attorney would help you paint him as the biggest asshole there is after his actions put you and your children in danger.

[jlt19]

Nov 2, 2020 8:36:27 GMT -5 ssmjlm said:

I just want to reach out and give you a hug.

I wouldn't do anything until the divorce is finalized. And honestly, I would go after anything you can and then once in hand, use that toward debt. I don't care what your state says, I would hope your attorney would help you paint him as the biggest asshole there is after his actions put you and your children in danger.

thank you so much for your 'kind" words, lol.

Small update, but attorney thinks I should pull the $18k and pay towards my loans b/c he could ask for half since it was technically part of a settlement. No matter it was MY settlement for sexual harassment against ME, but still done while married. Yet only I am responsible for the SL's. Oh, and only I'm responsible for paying the mortgage, but he's still entitled to half the equity. And if we do a for real 50/50 split (2/2/5 schedule) since we currently make nearly identical money, there would be no child support. Now I'm pissed at my state laws on top of everything else. 

[idahome]

Sorry the news from the meeting with the attorney didn’t go better.

You can always consult with a different attorney and focus on the debt questions so you “get a second opinion.”

You don’t have to make any decisions right now, but starting to plan on the financial piece as it applies in your exact situation is smart.

Good luck!

[Roc A Bee]

I wouldn’t do anything right now. Do you have a budget for the separation? Based on those numbers, I might have a different opinion.