Greetings, Dave
How do you feel about withdrawing funds from your emergency fund to make an early home loan payment?
Evans
Greetings, Evans
Believe me, I know how tempting it might be to throw a lot of money at your house, stop making mortgage payments, and buy it altogether. particularly if you’re working through the Baby Steps and believe you’re getting a lot better at managing your finances.
But even if it meant becoming debt-free sooner, I wouldn’t spend all of my emergency money to make it happen. I wouldn’t even use it all to pay for the house, to be honest. It seems like life always throws you a curveball when you least expect it. Your car will have transmission problems, the central unit will fail, and your roof will leak the instant you write that hefty check and deplete your emergency money.
Alright, so perhaps I’m making a point by amusing myself with you. In actuality, though, I would only think about taking money out of your emergency fund for something that isn’t a true emergency if it had grown much and you had very little money left over to pay for the house. Remember that you should have three to six months’ worth of household expenses in your emergency fund, not three to six months’ worth of income. Besides, it’s not even an emergency to pay off the house. Nobody with a mortgage is surprised to learn that they must make monthly payments on their house.
Do you recall Murphy’s Law, which states that if something can go wrong, it will. Evans, you’re essentially pleading for Murphy to pay you a long-term visit when you do things like your suggesting. And that’s not how I define financial peace, friend!
Dave
