What would the unemployed do without credit cards? (insurance, expenses, status)

[Political Mind]

Quite a few relatives of mine are unemployed. Without unemployment benefits and credit cards they would be on the street.

Here is the sitution of one of my relatives who lost her job:

Single age 28. Previous Job Office Manager. Previous Income $36,000 a year. Take Home salary : $2400 a month. Monthly Spending about $2300 a Month. Savings $100 a month. Money in the bank in savings before being laid off about $850.00.

Laid Off one year ago. Unemployment Insurance Benefit about $1000 a month. New Budget about $2000 a month, Gap $1000 a month. In one month all her savings were gone. What to do now she asked. Borrowed money from friends and family. That covered her for about two month. But after the two months are up she is still broke and unemployed. So she cashed $12,000 in credit Card Conv Checks. That solved her short term cash crisis but now she is only paying the minimum payment and in a few more months she will be out of money again and a new job is unlikely.

What now? No more help from her family. No kids so no welfare. Should she have cashed the credit card conv check or moved into a homeless shelter while she is unemployed?

[Philip T]

If the "new" income was $1000 a month, she probably should have dropped her spending to $999 or less for the duration. But rather than deal in Shoulda, Woulda, Coulda . . . it is best to play the cards as they lay on the table in the here and now.

Again -- drop the spending to $999 or less a month. Stop payments on the CC's (just my personal advice -- other folks are going to scream bloody murder about this part. After 6 months the cards will likely go to charge-off status, and the CC's will negotiate for a whole lot less.

I guess she has a(nother) year ahead for Unemployment Bennies? If so, get to a cheap place that will allow her to cover all her living expenses for UNDER the $1000/month that U/E is providing her.

In the meantime, any job is a good [enough] job.

Having a Job = The New Raise.

[Ceece]

All of your unemployed relatives should pool their resources and live together in a cheap place until they are back on their feet.

[NYChistorygal]

$1,000 a month for the Gap?

What???

[bouncethelight]

I couldn't help but wonder why on earth the original poster knew so much about a relative's financial situation? That just seemed off. And I guess I was right, because he's no longer a member, which most likely means that the post is not real.

But, playing along, if the post was real, I would say that she should find a way to live on the $1000 a month she does have. The credit card spending is already done, and can't be changed, so go forward now and live on $1000 a month NOW.

[Philip T]

Originally Posted by NYChistorygal

$1,000 a month for the Gap?

What???

In business math terms:

Income - Expenses = a Number.

In this case, a negative number.

Instead of "Gap," one may say shortage, net loss, "upside down," or if we were .gov, deficit.

In the case of this story, $1000 a month.

[slackjaw]

When my cousin lost her job she took our advice and frequented The Gap less, although her jeans did start to look somewhat dated.