The following is an anonymous question submitted to Your Money Line and was answered by one of our highly-trained Financial Concierges. All identifying information has been removed.
Hello,
Let me start with the statement that money scares me. It scares me in the way of not having it taken care of. I’m not a fan of credit … save and pay cash is preferred if possible.  I felt I probably wasn’t as bad off as others and should know what to do.  Well, I don’t and the shutdown is stressing the what if’s out of me.  I am furloughed at this time during the shutdown.
We are a two income house but I earn nearly 2/3rds of the household income.  No kids but two dogs with health problems and we have a vacation home to take care of.
We have savings accounts and could probably pull the money from the liquid (easy access) accounts for a good 3 or 4 months if pushed. Most of our cash is tied up in long term retirement.  I have started the initial filing for unemployment but am torn on this. I don’t feel like it should be used on me but with a week delay before funding, I just wanted to have it just in case. Obtaining any funds from the 401k is not at the forefront due to the potential 30d restrictions. 
So my question is this …. should we consider a HELOC or home equity loan against our house for this bumpy road /or/ should we drain our savings as needed, hoping it will end before we are dry? While they say we will get our wages back, not knowing the ending date and how long after that it’s submitted could be longer than anyone wants. 
I guess I am asking for guidance to keep us on the best path for now while protecting our future. Without an income, it’s too easy to make a bad step into a rolling stone of mishaps. The govt is making enough mistakes on my behalf. I can’t afford more. 

Dear Fed Up,

I am so sorry that you are in this situation. Suffering through a hardship that is no fault of your own is enough to stress out anyone! I’m happy that you decided to write in and please know that no one is expected to know what to do in this very unique predicament. Hopefully, we can lower your stress level a bit by looking at some options to help get you through this.

Money can be very scary when you don’t have enough of it, or if your income is on hold for an unknown amount of time. It sounds like you’ve done all the right things to this point in your life and your approach of saving and paying cash is absolutely the best way to go. You’re doing great with this money thing! 🙂

I’m glad you filed for unemployment. It’s there for exactly this situation and although it won’t fully replace your income, it will help immensely. If your position allows you to have other employment, then I would start looking for another job.

Knowing that this is a temporary situation, although we don’t know how temporary, I would strongly advise against borrowing against your home to avoid using your home equity for living expenses as much as possible. With the resources you have available, you can avoid this for quite some time.

I would instead take the approach of dealing with this event as if you were in a drought. It will rain again, but you’re not sure when, so you have to reduce the amount of water you need until the rain starts again. This means reducing your spending as much as possible. 

Take a magnifying glass to your spending and cut out anything that isn’t absolutely necessary. Anything like gym memberships, subscriptions, eating out, and shopping should be the first to go. Many utility companies, phone companies, and other creditors are offering payment plans and reduced payments for furloughed workers so contact them to ease your monthly payment burden.

Next, use your unemployment benefits to cover as much of your missed income as possible. If you are able to secure other work, use that income. Finally, use as little of your cash savings to make up the difference. If your savings will cover 3-4 months of normal expenses, this approach should cover you for a much longer period. Hopefully, it won’t take this long!

Lastly, if you’re not currently renting out your vacation home, perhaps consider making it available for rent.

Once you are paid back wages, use that money to replenish your savings. After that, keep on doing all the good things you’ve been doing. 

I hope this gives you guidance that you’re looking for. I wish you the very best and hope this shut down ends very soon.

Best wishes,

The Your Money Line Financial Concierge Team

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