Wondering what I should do... or what I would rather do... Be comfortable, or be smart. LOL
I have ~$6200 coming to me from a DPSP (Deferred Profit Sharing Plan) as I just resigned from my previous employer.
I won't be starting work again until mid to late January, and until the 3 months is up, I will be making slightly less than I was.
My wife is 4 months along, and is finding it hard at her work with all the lifting and crouching, and she is thinking about going on Disability EI until Maternity EI kicks in near birth... So we may be on one income fairly quickly, which we can do with the EI supplements, but it's definitely kinda tight.
I am a YNAB'ber so I do track our spending, although living paycheque to paycheque I don't really get to use YNAB the way it was designed (with a month's buffer). I would LOVE to have that buffer and plan out our month's spending, including saving and saving for retirement.
Anyhooo, would either love some facepunches or advice about this... She thinks we should cash it out, take the hit ($1500 so we'd have $4700 left).... we could use the money to get out of overdraft, build a bit of a buffer in our chequing accounts, and feel a lot more comfortable with our financial situation.
Do we do what I know is the smartest thing, and roll it into an RRSP and avoid paying taxes on it?
Or do we cash it out, have a month's buffer, and dedicate a minimum of 10% towards retirement?
I don't want to cash it out and pay down debt, considering we are having a baby within 6 months, I've decided we should just pay the loan ($290/mo) for the time being and pay down extra later once the baby is born and that stuff settles down.....
We are both 28 now, and have less than a grand each in retirement.
Thoughts??
(EDIT)
I forgot to add, we're down on funds because I have been off on medical EI for the past 4 months, so our monthly income has been down ~$600+ per month for the past 4 months... we've cut out eating out pretty much completely, buy almost no alcohol anymore, and have been able to pretty much float along, but it's been tight. That is why we're behind the 8ball right now, in overdraft due to some housing costs...forgot to pay our electricity for 3 months and all of a sudden it's $400... plus other bills :( I know I know wah wah