Unemployment Budget

[Daisyedwards800]

Okay here we go.  I have $20k in cash savings,

My monthly expenses are down to:
$1600 Rent (Rent stabilized two bedroom in HCOL area)
$85 Internet
$50 Phone
$15 Renter Insurance
$30-50 Gas
$100 Electric/Gas Stove
$50 Car Insurance
$70 Student Loan (at 2.2%)
$775 (Silver Plan ACA - second lowest tier - other tiers have huge deductibles and 60% copays but I have had to go to the doctor a lot - recovering from foot break - I can't really go down a tier further because it will end up costing me even more)
$200-400 Food (lower end of this because I stocked up for coronavirus).  Groceries again are pretty pricy here.

NY state unemployment pays $1700 after a bit of tax.  I am hoping they extend the additional UE.

Savings:
$20k in savings (I was hoping to use a portion of this for a down payment since I am 38 and still don't own - took me a long time to pay off my student loans and pay for grad school cash.  I am an accountant and previously made about $130k a year).
$450k in pre-tax retirement savings. I could borrow from this if I have to since there is no 10% anymore.

Putting in job applications all day long, have a second round interview next week, hoping to get it.  It pays $115k.  Most places in my industry are on hiring freezes or actively laying people off.

Not sure whether to try to move, my rent is really low for the area, and they haven't raised it in 5 years.  No pests, no frills either.  I don't really have a good place to move to right now that would be a lot cheaper.  Generally room shares are even $1200 a month.  Not sure what I'm asking but would it be a bad thing if I eventually had to dip into the IRAs?  I am hoping not, but the job market is TERRIBLE.

[ixtap]

Is someone occupying that second bedroom? Are you allowed to rent it out?

[Daisyedwards800]

I don't think I'm technically supposed to rent it out (but I doubt my landlord would care), but it's not set up to be a bedroom right now.  My boyfriend spends a lot of time here, and it's REALLY tight with 3 people (it's a small space even though it says 2 bedrooms, it's really a one bedroom that is used as a 2 bedroom just like most apartments in NY).  I could def do it in a pinch though if they brought their own furniture and were just as crazy about quarantining as I am.  I am nervous to expose my family to another person though. 

That is actually a decent idea though.  I might see if I know anyone who just wants a part-time place for if they need to work sometimes.

[Sid Hoffman]

Not sure what I'm asking but would it be a bad thing if I eventually had to dip into the IRAs?  I am hoping not, but the job market is TERRIBLE.

I'd personally rather take out a personal loan than go down the trap of dipping into retirement savings. I mean everybody is going to have their own thoughts, but worst case, you can negotiate payments or whatever on unsecured debt and/or just take the hit to your credit rating. Taking money out of a retirement account means it's potentially gone from there forever and it's not like in a good year you could contribute extra to get it back up; you're limited by the max contribution limit every year.

I'm guessing my response is what you were expecting to hear (given what forum we're on) but I'm close to your general numbers too and as an example took out a significant 401k loan to pay for things after my divorce in past years and it took me a good 2 years or something to pay it back. In that meantime I was missing out on 10% market returns. If I'd taken a straight withdrawal, then that money is simply out of the account forever. Even with the fact they're waiving the 10% penalty this year doesn't it still count as income too? So you will still pay income taxes on it if it's coming out of a traditional IRA as opposed to a Roth IRA. Even from a Roth, it means you're missing out on, say, 30 years of what would have been tax free gains in there.

Best of luck on your job search. It's rough times right now for sure. Aside from maybe switching to bare-bones internet and cell phone and/or moving out of New York nothing else jumps out at me as significant opportunities for improvement. Even those two I mention may depend on what you require for working from home if your new job is WFH as an example. Still - I'll say it again that I'd rather take out a personal loan than withdraw from an IRA assuming you can get at least single-digit rates for a personal loan or it's a small enough amount to be worth it.

[MrThatsDifferent]

1. Get a roommate if possible
2. Drop the renters insurance
3. See if you can get your student loans paused (if Gov loans, thought they were pushed?)
4. With monthly bills around $1500, you can go a year if the state UE covers rent.
5. I’d give it 3 months to find something or consider moving to where it’s cheaper to live.

6. Good luck!

[Daisyedwards800]

1. Get a roommate if possible
2. Drop the renters insurance
3. See if you can get your student loans paused (if Gov loans, thought they were pushed?)
4. With monthly bills around $1500, you can go a year if the state UE covers rent.
5. I’d give it 3 months to find something or consider moving to where it’s cheaper to live.

6. Good luck!

Thanks!   Roommate is priority #1 if I don't land this job.  The student loan thing is because I consolidated back in 2004 to a 2.2% rate and they were owned by Sallie Mae and not direct loans from the government.  Even though they were federal loans, they were not paused :/. I already asked. 

[nippycrisp]

Ignore if wrong, but I'm catching a panic/anxiety vibe in your words, OP. A lot of us have been through this process, and it always seems worse than it is. You have savings. You have unemployment insurance. You prepared for something like this, and were an adult instead of pissing your money away on whatever. Those savings are now peace of mind. At least they will be if you let them. Slow it down and don't do anything rash. You're OK.

Also, see if your electric/gas provider has some sort of low-income discount program or temporary assistance. 

[MrThatsDifferent]

1. Get a roommate if possible
2. Drop the renters insurance
3. See if you can get your student loans paused (if Gov loans, thought they were pushed?)
4. With monthly bills around $1500, you can go a year if the state UE covers rent.
5. I’d give it 3 months to find something or consider moving to where it’s cheaper to live.

6. Good luck!

Thanks!   Roommate is priority #1 if I don't land this job.  The student loan thing is because I consolidated back in 2004 to a 2.2% rate and they were owned by Sallie Mae and not direct loans from the government.  Even though they were federal loans, they were not paused :/. I already asked.

You can always contact them to do something for you because of financial hardship. There’s lots of options. I hope!

[Ze Stash]

I don't think I'm technically supposed to rent it out (but I doubt my landlord would care), but it's not set up to be a bedroom right now.  My boyfriend spends a lot of time here, and it's REALLY tight with 3 people (it's a small space even though it says 2 bedrooms, it's really a one bedroom that is used as a 2 bedroom just like most apartments in NY).  I could def do it in a pinch though if they brought their own furniture and were just as crazy about quarantining as I am.  I am nervous to expose my family to another person though. 

That is actually a decent idea though.  I might see if I know anyone who just wants a part-time place for if they need to work sometimes.

Since he already spends a lot of time at your place, could your boyfriend move in with you and share expenses? I know it's not really romantic for a pandemic/job loss to be the trigger for moving in together, but maybe use this situation to assess whether you're already at this place in your relationship. It could lower expenses for both of you substantially.

[christogram]

I'm in a similar boat, but since I'm self-employed unemployment has been... complicated.

If you purchased your health plan through the market place, you have the option to log-in and re-state your yearly income due to a life changing event. This may mean you will get your plan subsidized now instead of waiting until the end of the year when you file taxes.

May be worth looking into. I went down about $100 a month and I'm over-estimating my income for the year so I may get even more back come tax season.

[Daisyedwards800]

I'm in a similar boat, but since I'm self-employed unemployment has been... complicated.

If you purchased your health plan through the market place, you have the option to log-in and re-state your yearly income due to a life changing event. This may mean you will get your plan subsidized now instead of waiting until the end of the year when you file taxes.

May be worth looking into. I went down about $100 a month and I'm over-estimating my income for the year so I may get even more back come tax season.

Thank you!  I will look into this.  For 2020 my income is going to still be north of $110k but for 2021 it will obviously be ...close to zero.  That's why I'm panicking a little.  I'm still in accumulation mode and I feel I can't accumulate much of anything right now.

[Daisyedwards800]

Ignore if wrong, but I'm catching a panic/anxiety vibe in your words, OP. A lot of us have been through this process, and it always seems worse than it is. You have savings. You have unemployment insurance. You prepared for something like this, and were an adult instead of pissing your money away on whatever. Those savings are now peace of mind. At least they will be if you let them. Slow it down and don't do anything rash. You're OK.

Also, see if your electric/gas provider has some sort of low-income discount program or temporary assistance.

You are probably right - I am freaking out a bit because I have just been working nonstop since 2004 and never had to deal with any of this before.  I have this idea that no one will ever hire me again and I'll be one of the unemployed forever.

[FlytilFIRE]

Why would you say your income for 2021 is going to be near zero? Your crystal ball must be better than mine! You've made good decisions in the past. I'd expect the same in the future, and 2021 WILL be a better year (at least as far as pandemics go!).

Any side gigs you can pick up? Substitute teaching (assuming schools open)? Temp accounting gigs for non-profits, small businesses?

You're really reasonably close to break even now, so just a little supplement income will make you feel much more secure. Of course, depending on what and how you make money, it might affect the unemployment payment.

[wageslave23]

Ignore if wrong, but I'm catching a panic/anxiety vibe in your words, OP. A lot of us have been through this process, and it always seems worse than it is. You have savings. You have unemployment insurance. You prepared for something like this, and were an adult instead of pissing your money away on whatever. Those savings are now peace of mind. At least they will be if you let them. Slow it down and don't do anything rash. You're OK.

Also, see if your electric/gas provider has some sort of low-income discount program or temporary assistance.

You are probably right - I am freaking out a bit because I have just been working nonstop since 2004 and never had to deal with any of this before.  I have this idea that no one will ever hire me again and I'll be one of the unemployed forever.

What kind of accountant are you?  I think hiring will pick up for the last part of the year because of pent up demand.  I live in IL and my company is hiring.  If things don't pick up near you, I'd start thinking about moving.  Living in a HCOL area is only good if you have a job that pays really well to make it worthwhile.

[Daisyedwards800]

My SO works in the city so I would rather find a job here, but looking in a 2 hour radius right now.

I'm a financial accountant and I also have done finance at big firms.  Big 4, big investment bank and big law firms.

[Padonak]

I asked a question about your line of work but it was already answered so never mind.

Best of luck

[Padonak]

Apply for medicaid, food stamps and any other benefits you may be eligible for based on your current monthly income.

I've heard that they give medicaid to everyone in NYC who gets unemployment insurance. I could be wrong but it's worth checking.

[Daisyedwards800]

Apply for medicaid, food stamps and any other benefits you may be eligible for based on your current monthly income.

I've heard that they give medicaid to everyone in NYC who gets unemployment insurance. I could be wrong but it's worth checking.

Thank you I will check on Medicaid.  My unemployment benefits are too high to qualify for food stamps as a single person in NY.  The limit is below $20k I believe.

[Padonak]

Also, the additional federal UI doesn't always count when you apply for benefits. You need to check with medicaid etc if they count it or not.

[Daisyedwards800]

Also, the additional federal UI doesn't always count when you apply for benefits. You need to check with medicaid etc if they count it or not.

The state benefits alone are over the limit for a single person in NY for food stamps.  I will check on the Medicaid.

[ericrugiero]

Take a deep breath and try not to worry about it as much.  In the heat of the moment negative changes tend to feel worse than they really are.  If you make a decision in that frame of mind you tend to make mistakes.  When you look back in five years this will seem like a minor blip.  You have been smart and prepared for this so you have options. 

$20,000 savings is enough for about a year if you don't change anything.  You shouldn't wait a year but that does give you some time to look for a job and consider other short term options. 

If you get a roommate paying $750/mo that $20,000 could last two years.

Right now you are unemployed.  How much money can you make without impacting the benefits?  A little bit of income moves the needle quite a bit.  With the extra time on your hands surely you can do something online to make a little money.  Think outside the box. 

Don't take any money from your retirement savings yet.  That option is always there.  You can pull the trigger when you need to, not when you don't need it for a year. 

Don't rush into a drastic decision.  Your cash savings and low expenses has put you in a much better situation than most people who have lost their jobs.  Even if you spend all the $20,000 this year the money you have invested will likely grow enough to offset that spend ($20K is just over 4% of $450K)

[mozar]

I think you will find a job fairly soon. But with spending ~ 3000 a month and unemployment benefits of 1700 a month you should be fine for 12 months. You should be able to get on medicaid ASAP. Try to get on it before your next monthly premium is due.

You're doing super well. Next job I think you should focus on paying off the student loan and increasing cash savings before you consider buying a house.

Buying property in an HCOL area is dubious at best. Do you want to buy in NYC or are you looking to leave the area? What are your SOs plans?

[Daisyedwards800]

Thank you.  Putting it in perspective, knowing I can last a year even with my current bills and no new job/income that makes me feel calmer.