Dear Dave,

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?

Chris

Dear Chris,

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 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. 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

* 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. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. 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.

Dear Dave,

I’m just starting to pay off my debts. How do you feel about moving credit card balances to other companies in order to get lower rates? It seems like that would help me get out of debt faster.

Elizabeth

Dear Elizabeth,

I get what you’re saying. It might help speed up the process a tiny bit, but the habits that got you into debt in the first place won’t change just because you’ve switched credit card companies. What you’re talking about is an easy way to lower the interest rates—temporarily, in most cases—but it doesn’t keep you from taking on more debt.

Many people think they’ve really done something to solve their debt problems when they do this. But you’ve got to remember that getting out of debt, and gaining control of your finances, is all about changing the person you see in the mirror. You’ve got to make a commitment to getting out of debt, staying out of debt, and sticking to a written, monthly budget—that means keeping track of every, single dollar and living on less than you make.

In many cases, when people have problems with debt it’s the result of unwise lifestyle and financial choices. But guess what? When you change, interest rates don’t matter nearly as much. And when you shift your mindset about money, that will make a difference in a way that changing credit card companies and chasing lower interest rates can’t!

—Dave

* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.