Help me with loss of job budgeting
My husband just lost his job with a company he has been with for 25 years. He has worked there since high school and worked his way up the company ladder from a minimum wage worker to a district manager. He was currently earning about 100,000 a year. We had about 10,000 just in savings but one of parents recently died and we found out they had no life insurance. We used the bulk of those funds for funeral expenses.
We currently have about 2000 in a savings account. We have about 175,000 in his 401K in addition to company stock. He can keep the 401K in the company's account until he is 65 since he has been there over 10 years. The stock can remain for 2 years and since we lost about 30,000 in retirement savings and its doing poorly (as are all), it is staying there to hope for a rebound.
He will receive about $7000 a month (before taxes) for the next 4 months as severance. He was putting about 2000 a month in his 401K, our health insurance was 450 and he had a 3000 401K loan (for the downpayment on our home). We were using about 3000 a month of his salary. If he hasn't found a job, they will also allow another 10 weeks of salary. He has also filed for unemployment and I think it will be around 3000 a month for 22 weeks.
He will still receive his yearly bonus against sales because it was up to certain date. The amount he will receive is around 15,000 (after taxes).
I make 23,000 a year as a secretary at a private, expensive University. We have 2 kids that will be coming to college age soon. Their tuition is covered by my job. It amounts to about 35000 a year in savings. Not something I am giving up. I have picked up our lost health care insurance,which is a better plan and cost less than we were paying for his. That will be 280 a month for family coverage.
Our mortgage is 1300 a month. We also have 5500 in credit card debit and 5000 personal loan. Our one car is 210 a month. He lost his company car with the job. We don't plan to buy anther right away. I can do without for now. Other than utilities and food, we are pretty clear.
Would you suggest using the bonus money to pay off our credit card balance and loan? Credit card is at 8.99% and loan is at 11%.
This is a shock. He has been at this salary rate for about 2 years. Prior to that, he made about 65000 and I only worked part time, kicking in about 8000 a year. We aren't used to big bucks but it was really nice to finally have some left over and not continually struggling.
He has a few leads on jobs but we are realistic in that he won't be making 100,000. If he finds a job at 50-550000 I will be shocked. His quality of life will definitely be better because he traveled everyday, driving up to 3000 miles a week. So much stress. 24 hours a day on call.
My husband is also planning to take up umpiring and reffing local sports on the side, bring in a few hundred bucks a month. (he loves sports so thats fun not a job). He also teaches baseball classes to young kids (cash). Another few hundred a month.
We aren't behind on any bills and haven't been. Don't want to start.
Budget planners - I'm not afraid to get frugal. Help me plan. I don't shop except for necessities and I only buy on sale. My kids have part time jobs and have their own spending cash.