[Julie]

I recently got laid off in an overly saturated job market. Unemployment is only $450/wk, (I am a single mom of 3). I have savings & a couple side hustles but looking for ways to make ends meet in the interim. Also, I’m thinking about using my 401k to pay off the car, is that stupid?

[Linda]

I’m so sorry to hear about your layoff. Cashing in your 401K should be the absolute last resort. You will lose almost half in taxes never mind all the money it could have grown to over the years. I hope you find another job soon.

I’m sure that must be stressful.

[Jessica]

Do Not cash in your 401k.
Terrible idea.

[Jenny]

Don’t panic. Try to find another job. Don’t cash out your 401k to payoff the car. Pay as you go. The 401k is your last resort and buffer. You will incur penalties and have to pay taxes. Minimize expenses, use buy nothing groups, apply for food stamps for the kids if you qualify. Keep focusing on the positives, watch for opportunities and attract what you need into your life.

Opportunities often appear during crisis for those who are prepared and looking for them.

[Jason]

Not stupid, but likely an unwise, short-term decision.

It’s great to eliminate car payments forever, but better to do it through earnings or savings rather than withdrawal from 401k. Could your side hustles bring more income?

Is there some type of work that interests you that’s different from what you’ve done before?

Definitely want to meet recruiters, reach out to people in your field who work at places you’re interested in, and make connections with people at good employers (being able to name drop goes a long way).

[Author]

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