OK To Use Savings To Pay Off Debt In Baby Steps


Q. I have $11,000 in a mutual fund account that is not a retirement account. My wife has a retirement account through her job as a teacher, but I don’t have one at all. We’re in Baby Step 2, so should we cash out the $11,000 in the investment account to pay off debt?

— Chris

A. If this money qualifies as a non-pension fund, I’d say go ahead and cash it in. Use the money to pay off debt and stay focused on working the Baby Steps. Pay off that debt, build an emergency fund of three to six months of expenses, then it’s your turn to invest.

The fastest way to build wealth is to take control of your greatest wealth-building tool: your income. If all your money is going out to other people, you don’t have that tool at your disposal when it comes to important things like saving and investing. There’s some math in it, but it’s also about behavior and being intentional. Getting out of debt drastically shortens the distance between you and your wealth.

[ Sharing is Caring! ] Tags: DEBT
This div height required for enabling the sticky sidebar