EagleTribune.com, North Andover, MA

Business

April 14, 2013

Don't ask for a 'Murphy' visit

Is there ever a time you should dip into emergency fund savings in order to pay off your home early?

The only time I would advise this is when your emergency fund is too big, and you have a very small amount left to pay on the house.

Keep in mind that your emergency fund should be three to six months of expenses, not three to six months of income. Besides, paying off the house doesn’t fall into the category of an emergency. The fact that you have to pay for your house doesn’t catch anyone by surprise.

I understand it can be very tempting to throw a bunch of money at your house, get rid of the mortgage payments, and own it outright. But I wouldn’t drain my emergency fund to make it happen — even if it meant being completely debt-free sooner.

Life happens, and the moment you write that big check and weaken your emergency fund, the central unit will go out, the roof will spring a leak, or you’ll have major repair issues with a vehicle.

When you do things like that, you’re just begging for Murphy — as in Murphy’s Law — to come visit. And that’s not my definition of financial peace.

My husband and I have a baby and are trying to live on a budget and pay off about $14,000 in debt. He wants to spend $100 a month for a date night, but I think this is too much under the circumstances. I’m a stay-at-home mom right now, and after taxes he makes about $3,200 a month. What do you think?

You win on this one. If you’d told me you guys make $150,000 a year, then I’d say he was being completely reasonable. But with your income and a lot of debt to boot, it sounds like he’s just looking for an outlet to spend some money.

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