Editor's Note: Do you have a question about your finances? Crosswalk.com welcomes financial columnist, Deborah Nayrocker. Deborah will be answering selected readers' questions in her monthly column. To submit your question, email us at: moneyquestions@crosswalk.com.

Dear Deborah,

Q: My husband has been out of work since May 2008. I teach in a small Christian school so my income is small. Our house sold last year and we paid off all our debts, credit cards. We have been living on the proceeds from our home and my salary (I make about $1,400 a month). My income covers rent, electricity, phone, and some for food. My question is this: We will use up our house money and savings in about three months. We do have retirement savings in a 401(k). What penalties are there associated with taking this out? I hate to consider using this but we have used up our savings. – Kathy

A:  Congratulations on paying off all your debts, including credit cards. That is a big accomplishment.

As to your husband’s job loss, you and your family are not alone. Nationally, 2.6 million jobs were cut last year.

If you’re wondering whether to take money from your retirement account, it’s not a good idea. There are several reasons why you shouldn’t turn to your 401(k) for cash. If you’re younger than 59 ½, you’re looking at a 10% penalty for taking money from your 401(k). You will also lose a large amount of the withdrawal to income taxes. And are you sure you want to put your nest egg at risk, forfeiting potential investment gains?

So, what are some steps to take when faced with long-term unemployment?

1. Spend sparingly. Look for ways to cut spending and follow a bare-bones budget. Some families find that food costs can be cut considerably by shopping and cooking smarter.  Scale back on extras, such as the annual vacation. Can you cut anything more?

2. Look for ways to add to your income now. If your husband isn’t employed yet, his job is to find his next employer. According to Money magazine, the average duration of unemployment is 22 weeks for workers ages 45-64. It’s less time for workers younger than 45. Taking on part-time jobs may be necessary to help make ends meet. Be willing to take on small jobs or temporary work, such as delivering pizza. Maybe a part-time job could turn into a full-time position later.

As a certified teacher, you could offer tutoring services during the school year and summer. Set a reasonable fee for your subject expertise. Advertise in the local newspaper. What skills do family members have that could be used as a means to bring in income? Are any family members musically talented? Music lessons can bring in some income. Consider lawn services, home services, etc. Look for opportunities that go along with interests and skills. Income from a variety of sources can add up.

3. Seek out community resources. Look in the phone book or ask friends about community services that are available where you live. You may be surprised to find how communities will pool their resources together to help when there are tough financial times.

Dear Deborah,

Q: How can I spend less on food? I’m spending a lot more than I’d like to. Any tips? -- Tom

A: The cost of food has risen, up more than 5% from a year ago. Here are ways to save:

1. Bring a shopping list to the store and stick to it. Try to limit grocery shopping to once a week. Don’t shop when you’re hungry or tired. Studies show you spend less when you’re not hungry or tired. Keeping your children at home when you shop can help eliminate impulse spending.

2. Pay with cash.

3. Use coupons from your weekend newspaper or online for items you need. Some coupon clearinghouse Web sites are coolsavings.com, smartsource.com, and homebasics.com. Look at your grocery store flyer for sale items and stock up on items for the next month. Shop at grocery stores that double coupons (up to 50 cents) every day, such as Kroger. If you combine coupons with weekly sale items, you’ll get considerable savings. I saved a hundred dollars recently combining the two.

4. Purchase grocery store brand items instead of name brands whenever possible.

5. Buy less processed and packaged foods. Consider homemade vs. convenience food. You’ll save and eat healthier, too.

Published April 13, 2009.


Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. An award-winning writer, she is a regular guest contributor to CBN.com and the author of The Art of Debt-Free Living and Living a Balanced Financial Life. Her Web site is www.artofdebt-freeliving.com.