Dear Dave,
Is it ever OK to withdraw money out of your emergency fund to repay your own home? My husband and I were talking about this recently because we’re near paying off our mortgage. We can be comfortable to listen to your opinion.
Erin
Dear Erin,
Believe me, I understand how tempting it may possibly be to throw loads of money at your own home, eliminate the mortgage payments, and own it outright. But I would not recommend emptying your emergency fund to attain this – even when it meant getting completely debt-free faster.
The only time I could Suggest doing something like this in case your emergency fund is there Away too big and you have got one very There is a small amount left to pay for the home. As a reminder, your emergency fund should include three to 6 months of expenses, not three to 6 months of income. And anyway, paying off your own home doesn’t fall into the category of an emergency. The incontrovertible fact that you have got to pay for your own home doesn’t really surprise anyone.
I do not know the way old you two are, but when you’re married, you have probably already learned that life happens – often once you least expect it. And the moment you write that big check, you are putting yourself in danger. If you do something like that, you are definitely begging for a automotive to have its transmission fail, its central processing unit break, or its roof leak.
Do you have got a depleted emergency fund in any of those situations? That’s not it My Definition of economic peace.
–Dave
Dave Ramsey is an eight-time national bestselling creator, personal finance expert and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” Fox News, CNN, Fox Business and lots of others. Since 1992, Dave has been helping people take back control of their money, construct wealth, and improve their lives. He also serves as CEO of Ramsey Solutions and is the creator of diverse books, including Baby Steps Millionaires: How Ordinary People Build Extraordinary Wealth—and How You Can, Too.
