Middle of the Storm

Susan and her husband have $6,000 in debt and some savings. They had a baby with some serious birth defects. Susan is unable to return to work. Dave recommends hanging on to the savings for the time being.

QUESTION: Susan in Indiana and her husband have $6,000 in debt and some savings. They had a baby four months ago, and she has some serious birth defects. Susan is unable to return to work, and her husband makes $40,000 a year. Dave recommends hanging on to the savings for the time being.

ANSWER: Hold on to the money. Right now, you’re going through the fire.

The first goal here is make sure baby’s taken care of. Debt is way down the list. We’ll get back to it. We’re going to come back around.

I don’t know how far out the surgeries she needs are, how expensive they are, but I’m looking out into the future. I’m asking that question not only checking your baby, but I’m also asking the question to say and to also point out that you’re going through the scariest time of this whole deal probably right now. Every day, as we move through the process, is going to get better and better, and there’ll be a day that her life is somewhat normalized and you may be back to work at that point. That may be two years; that may be five years. I don’t know. It’s probably not five months. Right now, you need this money.

If you get in a pinch, just put the student loan on a hardship deferral, but if you can keep paying the payments, that’s the best thing. Live on a real tight budget. Watch what you’re doing.

Try not to use the money you saved. The main purpose of this money is to ensure that the baby’s okay and that you’re there for the baby. I don’t really give a rip about anything else here. If the student loan goes completely into default, I’m okay with that. Babies are first. We’re just going to do this very, very intentionally. In other words, we are in a storm, and we have one umbrella, and we’re not giving it up.

You’re going to be okay. The good news is that when you look back in three or four years, this will be behind you guys or largely behind you anyway. You’ll be able to turn whatever financial corner you need to turn at that point.

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