Spending Savings during Unemployment etc

So, unfortunately, we have had to spend more than we make for the past few months. I find the budgeting worksheet (using the envelope method) not intuitive if you aren’t actually “saving” but at the same time want to use the rollover concept for things like groceries etc. When you find yourself in this situation-obviously you want to reduce expenses as much as possible, however, some things aren’t possible. For instance, we have had to cash out IRAs etc. How do you manage your tiller in this situation? I’ve had to do my own worksheets to figure out cashflow etc. too.

If you create an income category, “IRA Distribution” and add that to your budget could that replace your lost income and you could carry on with Tiller “as usual?” The Annual Budget and “Year-to-Date Comparison” are two sheets I find really useful to see how cash flow is comparing to your plan. You may want to setup a “IRA Distribution Tax” category in anticipation of how your distribution might be taxed. While the usual 10% early withdrawal penalty likely would be waived, the taxation might vary based on a number of factors (Roth vs. traditional account), plan to repay in 3 year-window, your marginal tax rate / etc. --but better to plan ahead than be caught by surprise. Perhaps the Foundation Template might work better in a situation when the envelope method doesn’t seem well-suited?

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