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Preparing for unemployment
Old 07-18-2012, 09:09 PM   #1
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Preparing for unemployment

I will be separating from the military in 2 years. My wife and I have student loans at an average of 6.5%. I'm trying to save as much as possible for our "transition" fund. Right now we pay the full monthly payments on our student loans but have the option to use the income based repayment plan.

This would reduce our monthly cost by $150 for the next 2 years. I'm battling in my head because I know it makes little financial sense to save $150/month in a savings account earning less than 1% instead of paying down debt at 6.5% but I want as much in a savings cushion for our impending unemployment period. Obviously we are hoping for a short transition time but you never know.

Thoughts?
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Old 07-18-2012, 09:25 PM   #2
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Build up your emergency fund first, then pay down the high rate debt in lieu of investing second.
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Old 07-19-2012, 07:37 AM   #3
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Good luck on finding a new job quickly. Since you know already now when you will need it, you can start looking well in advance. That should help to keep the transition period brief.
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Old 07-19-2012, 08:24 AM   #4
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You shouldn't be preparing for unemployment, with two years notice, you should be figuring out what you need to do to walk into another (hopefully well paying) job with little or no lapse. Two years is plenty of time to line something up.
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Old 07-19-2012, 08:26 AM   #5
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When I lost my job I was confident i'd find another one within 2 months. Aug 5th will be a full year unemployed. Build the emergency fund first.
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Old 07-19-2012, 09:09 AM   #6
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When I lost my job I was confident i'd find another one within 2 months. Aug 5th will be a full year unemployed. Build the emergency fund first.
You can't get a job delivering pizza, doing landscaping, etc... until you find a real job with some career potential?
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Old 07-19-2012, 10:24 AM   #7
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You can't get a job delivering pizza, doing landscaping, etc... until you find a real job with some career potential?
I've gotten turned down for multiple $8/hr jobs as well as the $18/hr union jobs. $18/hr may not be much for most on this forum but that's a lot of money to me and that's what i'm shooting for. I've tried applying for $8 and $9/hr jobs full and part-time just to have something and still I get nothing.
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