Editor's note: Money expert Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including "The Total Money Makeover." His radio show "The Dave Ramsey Show" is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Each week he answers a question about personal finance in his "Dave Says" column.
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 do not have one at all. We’re in Baby Step 2, so should we cash out the $11,000 in the investment account to help pay off debt?
If this money is designated as non-retirement funds, I’d say go ahead and cash it out. Use the money to pay down debt, and continue to stay focused on working the Baby Steps.
Get that debt paid off, build an emergency fund of three to six months of expenses, then it’s your turn to start investing.
The quickest way to build wealth is to get control of your largest wealth-building tool—your income.
When all your money is going out the door to other people, you don’t have that tool at your disposal when it comes to important things like saving and investing.
Getting out of debt dramatically shortens the distance between you and wealth.
There’s some math in there, but it’s also about behavior and being intentional. Getting out of debt dramatically shortens the distance between you and wealth.
A lot of people are having some major “never again” moments right now in the wake of COVID-19 and all the other stuff 2020 has thrown at us. They’re saying things like, “Never again will I be broke, never again will I have debt, and never again will I live with no savings to help take care of me and my family.”
You can do this, Chris. Get after it!
Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.