Heat Pump dying...budget buster!

[luvthatdisney]

We have been trying to pay down our consumer debt (20K) since January, but ever since we started we have not been able to gain much ground. Every time I think we might be able to pay more towards our debt something happens that we have to pay to fix. Plus DH was laid off the begining of April. He has found a new job - through a temp agency - but at least he has something. I had to pick up medical insurance where I work for him and our DD - $500 a month compared to $100 we had been paying at his prior job.

Now we have learned our heat pump is dying. It is 17 years old and I had hoped to get a few more years out of it, but we had problems with the heat in January ($600 power bill in January - still paying on that!) and now we are having issues with cooling. Had it checked twice and they both state it is just old and is working as hard as it can to cool, but it is just not enough to get the house under 78 degrees. It runs constantly. I am worried about our power bill this month. We have every ceiling fan running and it is tolerable, but with temps in the mid 90's for the last week and no end in sight, I am not sure how long it will hold out.

I know we need to replace it, but wonder how to pay for it. Has anyone been in this situation? We could try to get a loan, but DH has only worked at his current job for a month and a half and is through a temp agency. I have been at my job for 4 years, but I do not make a whole lot (work in a school).

This just stinks - I thought we were finally getting somewhere, but I guess not. We knew there would be no vacation this summer, but now it is apparent I need a 2nd job. I am a 12 month school employee so I work there in the summer too (it is full time). Dh is working all the OT he is allowed, which has been about 10 hours a week. Still with a 2nd job I could not save up enough to get the heat pump replaced before the winter. We are getting estimates now, but I think it will run between 4-6 thousand to replace it.

Thanks for letting me vent!

 

[jedijill]

Normally I wouldn't suggest this, but do you have a 401k that you can take a small loan from? Might be enough to get you by.

Also, look into rebates and tax write offs for installing a more efficient furnace/AC..they might help offset the cost.

Good luck and hope your DH finds a permanent job soon!

Jill in CO

 

[luvthatdisney]

Normally I wouldn't suggest this, but do you have a 401k that you can take a small loan from? Might be enough to get you by.
Since DH was laid off his 401K is just sitting - there is a 26K balance in it, but we cannot borrow from it - we could cash it out, but I really do not want to unless it is our last option
Also, look into rebates and tax write offs for installing a more efficient furnace/AC..they might help offset the cost.We looked into it and I can only find a $200 rebate through our power company. We would have to go with a higher SEER unit to get it - so it will cost more.

Good luck and hope your DH finds a permanent job soon! We hope DH will be hired on permanent where he is working now as a temp. He really likes it and it is a good company. Probably wont happen until late July or August, if it does at all.

Jill in CO

Thanks for the support!!!!

 

[Jeff_G]

Normally I wouldn't suggest this, but do you have a 401k that you can take a small loan from? Might be enough to get you by.

Be careful about taking a loan from your 401k, if you should quit your job or be laid off you must pay back the entire loan within 30 days otherwise the loan becomes a non qualified withdrawal and you owe taxes on it! You are also un taping the investment for many years thus loosing the benefit of long term compounding interest! I would not do this for a heat pump, only a bankruptcy or foreclosure… Go barrow money from a credit union of bank first…

 

[luvthatdisney]

Be careful about taking a loan from your 401k, if you should quit your job or be laid off you must pay back the entire loan within 30 days otherwise the loan becomes a non qualified withdrawal and you owe taxes on it! You are also un taping the investment for many years thus loosing the benefit of long term compounding interest! I would not do this for a heat pump, only a bankruptcy or foreclosure… Go barrow money from a credit union of bank first…

Jeff - I am not sure if you read my entire orginal post, but my DH was laid off in April. He is working through a temp agency at a different company. He does have 26K in a 401K sitting with his old company waiting to see if he is permanently hired at this new company and we will roll it there if we can. I do not want to use it for the heat pump or anything else, but we have no savings and since he has only worked for this temp agency for a month and a half I am not sure we could qualify for a loan.