How to navigate sudden poverty

amother

Olive ↓

Tue, Oct 24 2023, 1:06 pm

It’s not about cutting out snacks. That won’t make a difference.

First of all, this might be a good thing for your kids in the long run. Might teach them to grow up hard working and not spoiled.

Second of all, much more than cutting snacks or anything else that is small, you need to be very honest and up front with your kids’ schools and in general if there are commitments that you can’t keep right now.

Third of all, it is in the interest of everyone that you do not sell your house.

Fourth, from what I hear retirement funds can’t really be cashed out, but you can take a 50k emergency loan against them that you pay back with interest. Not sure if this would help you that much.

Fifth, I’m really really sorry that you are going through this. There are some industries that were very frothy and now are getting hit (crypto, some banks, real estate). It’s Mazal. Hopefully your husband will somehow land somewhere and you will be able to get back on your feet.

amother

Daisy ↓

Tue, Oct 24 2023, 1:21 pm

amother Aquamarine wrote:

Retirement account is also savings, just with another name.
How much is in your retirement account? I assume at least 1 million, since you said it can cover a couple of years (based on your usual cost of living, I’m assuming).
Don’t sell your house, but if you have a million $ accessible, I don’t think you have to worry about food at this point.

If your husband gets a low offer-such as $400k-500k, he should probably take it. If he doesn’t want it though, please let us know of any such opportunities!

ETA: He should also get 2/3rds pay through Unemployment, for up to 6 months I believe; though I’m sure it’s capped at a certain $ amount.

The problem with using retirement savings is that you pay a huge tax penalty for early withdrawal so that would be the last thing one would want to do.

Unemployment is capped - in California the maximum payout is $450 per week. All states have maximums but amount varies.

I would explore selling the house. This is because I am presuming the monthly cost for the house is very high based on OP's previous income of close to $700,000 which is now $75,000. The house probably has a high mortgage; high property taxes and presumably has high utility and maintenance expenses. At least she should get in touch with some realtors to find out how much she can realistically get for the house - and how much she would net. If there is realistically no way that husband will ever make that high salary again, then one has to be pretty realistic about altering one's life style.

Also cars - are the cars expensive? Are they leased?

In terms of insurance, your children will probably be eligible for CHIPS in whatever state you are in. Give your low adjusted income, you and your husband might be eligible for either Medicaid OR a substantial premium subsidy when you buy through the marketplace.

Is your husband able to negotiate a severance package. Many high paying executives get the company to pay for medical insurance for at least a year.

I am focusing on large ticket items.

amother

Chicory

Tue, Oct 24 2023, 1:24 pm

Unfortunately this happened to us last school year. My husband's company gave him notice that they were getting rid of his position.

He wasn't making anywhere 600k, more like $120k. I also have 5 kids, not 8.
We were able to get insurance from my work, so we didn't have to pay Cobra prices. We really skimped on purchases that weren't absolutely necessary. We contacted my kids' schools and BH they all gave us really big breaks. We were paying full tuition and they knew we'd continue to again when we could.

We did tap into savings (not investments)--accounts we had for emergencies, and we did go a into debt. He was out of work for 4 or 5 months. It wasn't easy. It was a test on our bitachon. My husband took on learning bitachon sefarim to work on himself.

But BH he has been working since the end of the summer. We thank Hashem for his parnasa on a regular basis. The schools said we can still have a break to get back on our feet. BH we are slowly crawling out of debt.

amother

Quince ↓

Tue, Oct 24 2023, 1:28 pm

amother Daisy wrote:

The problem with using retirement savings is that you pay a huge tax penalty for early withdrawal so that would be the last thing one would want to do.

Unemployment is capped - in California the maximum payout is $450 per month. All states have maximums but amount varies.

I would explore selling the house. This is because I am presuming the monthly cost for the house is very high based on OP's previous income of close to $700,000 which is now $75,000. The house probably has a high mortgage; high property taxes and presumably has high utility and maintenance expenses. At least she should get in touch with some realtors to find out how much she can realistically get for the house - and how much she would net. If there is realistically no way that husband will ever make that high salary again, then one has to be pretty realistic about altering one's life style.

Also cars - are the cars expensive? Are they leased?

In terms of insurance, your children will probably be eligible for CHIPS in whatever state you are in. Give your low adjusted income, you and your husband might be eligible for either Medicaid OR a substantial premium subsidy when you buy through the marketplace.

Is your husband able to negotiate a severance package. Many high paying executives get the company to pay for medical insurance for at least a year.

I am focusing on large ticket items.

California unemployment maxes out at 450 per week, not per month. NJ is much higher.

amother

↑ OP ↓

Tue, Oct 24 2023, 1:37 pm

To clarify some questions…
I reallllllllly don’t want to take from tomchei shabbos or other tzedaka organizations if any way at all possible. Would definitely sell my house before doing that.
We currently have a very low interest rate on our mortgage so refinancing wouldn’t be a solution. I was more thinking of selling it and buying a cheaper one and using the equity we have in the house to live off for a year or whatever
He’s a professional and we are still paying off his student loans. He’s only making this salary for the past couple of years (that’s why we haven’t accumulated much in savings. Also paying full tuition and living in the tri state area with 6 kids is NOT cheap!!!)
Our retirement account has less than half a million dollars in it
Whatever reason he’s losing his job is the same reason he likely won’t find another one too quickly (ie he’s inept or was caught stealing company funds or is really socially awkward or whatever).
I know it sounds like a lot of money ($600k/year before taxes) but I honestly don’t see where we can cut. We don’t take vacations or lease cars or eat out or wear expensive clothing.
Pretty sure unemployment caps at a really low rate and that money will be negligible.
I don’t know about a severance package, thanks for pointing that out I’ll have dh find out.
Not being able to see where we can cut (and not being confident he’ll find another job at all, ever) is what’s freaking me out.
Thanks for all your ideas and support

amother

Azalea

Tue, Oct 24 2023, 1:51 pm

amother OP wrote:

This must be really hard for you. Keep in mind there are a ton of people with 6 kids in the tristate area making way way way below 600+70. It’s obviously going to be a huge shock to your life but iyh you will be ok and hopefully soon he will find a new job.

amother

Blueberry ↓

Tue, Oct 24 2023, 1:51 pm

I want to offer some chizzuk if I may.
My husband was not a big earner but he did lose his job because of his social issues. He was working in a company in a leadership position where he was part of numerous teams and they were all putting complaints in about him. He lost his position quite suddenly and it was very scary. He had been with this company for most of his working life and he didn't have a degree either. The position he had was one that would always involve both a team and suave social skills, neither of which he could manage. It was a very upsetting and scary time.
I was not working either at the time.
Eventually he found a job in a totally different direction and is able to provide for our family, Thank you Hashem.
Keep davening. Thinking of you.

amother

Mint

Tue, Oct 24 2023, 1:53 pm

Op I’m in a very similar situation. Not the 600k part though lol. As soon as his severance checks stop u can prob get on Medicaid. Hopefully the insurance will run out at the same time as his last check. Like someone else says, iyh he will find something really quick that pays the same but even if it’s a lot less you will be ok. You will call the schools and lower your tuition bill. People live decently on salaries like 300k with six kids in the tri state and are doing fine. He should start sending out his resume asap and networking as much as possible. Hopefully the gap from when he stops getting paid until he gets a new job will be very small. And what’s been helping me the most is working on my bitachon. It’s a real game changer. Surround yourself with people who are positive and iyh Hashem will take care of you. Hopefully both of our husbands will find jobs soon.

amother

Catmint

Tue, Oct 24 2023, 2:01 pm

amother OP wrote:

I’m so sorry for you- this is so hard! There likely isn’t a severance package for an employee who is being asked to leave based on one of (or similar) the reasons you listed. You sound like such a supportive wife- not once did you complain about your husband in this- kudus to you, that will get you through this.

Average food budget per person per month should be in the $250-$300 range. Keep your food budget at $2400 per month and be conscious of it- that will help trim $ off your spending.

When you say sell your home- is it out of normal range size/cost wise f what a typical 5 bedroom home wohld cost? If you have a low mortgage rate, a smaller home at a higher rate may not save you anything. Explore that before making rash decisions.

Regarding Medicaid, they may consider your retirements funds as assets that would make you ineligible. Explore the options for cashing out before you go on assistance. It can buy you time while your husband does a job search and you settle into an income that is less than you are used to.

At 700k pretax, I imagine you were taking home about 400k after taxes and health insurance, minus another 100k for tuition, 70k for mortgage etc.

so tuition is your first thing to go, followed by a tightened food budget (not less in quantity, but stock up on sales in different stores- meat, chicken etc in one, pantry staples like flour, sugar in another) start making more of your own snacks- baking etc. cancel your cleaning help and assign jobs to your kids, put clothing purchase on hold for now.

It’s doable, and you will get through this! Hatzlacha!

amother

↑ Quince ↓

Tue, Oct 24 2023, 2:27 pm

amother OP wrote:

If the reason he lost his job is going to affect him forever then I would move to a smaller home. You need to plan for the future and not just short term if this isn't a once off, like the company os downsizing. You might need to take tomchei Shabbos and sell your house. Sorry for being blunt. There's nothing wrong with using community resources short term when your primary breadwinner has lost his job. You should be able to manage very frugally if you can pay the minimum while your husband is unemployed. Don't try to live off of savings or equity. It will set you back for a very long time if you do that. Trust me, my husband lost his job as the primary breadwinner. It was tough, but really tightening the belt makes a big difference.

amother

Strawberry ↓

Tue, Oct 24 2023, 3:03 pm

I've lived on a similar (smaller) income in the past so I'll tell you the things I've learned: (and hopefully you won't need these tips for too long..):

First thing you need to do is sit down and write down all your expenses. Categorize them as fixed, not fixed, necessary, optional. Then you have an idea of how much of your budget is absolutely fixed, how much can be reduced, what can be pushed off, etc.

Next, see how many government programs you can qualify for. Your children will for sure be eligible for Jersey Care, and if you have small children you can get WIC. Also you can apply for HEAP, USF, and probably some others, which will be so helpful as winter is coming (they help pay for your gas and electricity).

And as much as I hate saying this, if you're making a little too much money to qualify for Jersey care for yourself and your husband you may want to reduce your income to become eligible.

I know you hate the idea of Tomchei Shabbos, but really that's what it's there for. So that your family will have what to eat if your entire paycheck went to pay your mortgage... and there's nothing left in the bank. Please rethink this.

I would hold off on tuition for now until you have a better idea of how much money you actually need to live day to day.

If your husband has student loans, contact the company to put your payments on an income driven plan, or even put the payments on hold until he can find another job.

And I sincerely hope your husband finds a good job in something else real soon and you won't need to do any of this...

amother

↑ Olive ↓

Tue, Oct 24 2023, 3:51 pm

I think there is a huge difference between losing a job for social skills reasons and losing a job for stealing company assets. Am I wrong here? In terms of how you relate to your husband. Many husbands have poor social skills. Not many steal company assets. So that’s a factor too.

And, how is your husband reacting? Is he confident about the future or is he freaking out and facing a trial or jail time or loss of his license? I have had acquaintances that have gone through that. Some came out okay and some didn’t. The one that came out the best used Ben Brafman.