Two weeks ago at this time, I owed $2,742 + change on my car. I also had $2,000 of contributions in a Roth IRA. I was also about to receive a $1000 “extra paycheck” the following week.
I think you see where this is going: I made the decision to withdraw $1800 from my Roth and, combined with the extra check, pay off my car.
I wish I had a really good story to explain why I decided to do this. There was no lightbulb moment, no real number crunching, no mental breakdown or breakthrough. I just decided that the $2000 in an investment wasn’t providing me with the same sense of security as would clearing $2700 in debt. So I acted swiftly, before I could start obsessively analyzing. I didn’t even check with someone who had an online accounting degree. I just went for it.
Financially, this was probably the wrong decision. One of the cardinal rules of personal finance is not withdraw money from retirement accounts for anything other than retirement income. Emotionally, I couldn’t be more pleased with my choice. I still don’t think, on a deep, psychological level, I’ve embraced the power saving the way I’ve embraced the power of paying off debt. So rather than try to fight that reality (which I will have to do, and soon) I decided to work with it to better my financial picture in a different way.
Feel free to disagree with my decision in the comments, or better, convince me of the importance of savings. Because it’s going to be all about savings from here on out!
