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Kelly is with us to start off this hour in Houston hi Kelly how are you hi how are you better than I deserve what's up um well my ultimate question is I want to know if it would be an option for us to cash out our 401k which has roughly about 35,000 in it in order to pay off credit cards and get into a new home by school year next year the reason why is our landlord has let us know that rent will be going up in August to basically what a mortgage would be for us, and also we were going to do two years of Pre-K to give us another year and now creaking has also let us know that the tuition will be going up $400 next year as well, so I just wanted to know what your thoughts were on cashing out the 401 K in order to pay off that get into a home in a better school district ultimately examples what's your household income I would say about ninety-five thousand time that's good news how much do you owe on your cars um we have two vehicles we all about fourteen or each of them time fourteen on each, and you have how much other debt other than your vehicles in your house you don't have a house we only have credit cards at loss and then the cars, and we were doing your debt snowball, and you were really doing great at it and then in August we went on a vacation my husband's company lost his clients why don't you go on vacation when you were doing the dead snowball um well my family is cross-country they have kids so it kind of we actually did save up cash to do it, so we didn't feel as bad doing it and walked it into our budget it's in order to be able to do it um, but you're broke yeah you deeply you're deeply and card down you're deeply in credit card debt, and you can't afford to go on vacation, and you don't know my house yeah, yeah okay here's the problem you guys are in a 40% tax bracket and so any money you pull out of there is going to be taxed at 35 to 40 percent plus a 10% penalty, so the government is going to take roughly half of whatever you pull out of your 401k okay and so that's kind of like saying Dave I want to pay off my credit cards and buy a house with a 40% interest loan well normally I wouldn't even think about doing it normally that would be stupid and normally that would be stupid in any category that would be stupid unless it was to avoid a bankruptcy or foreclosure you would never borrow money of 40% interest well it's just no way now if you want to move to a School District and rent move, but you're broke you don't need to be buying a house any more than you need to be going on vacation you guys make too much money business broke it is time for you all to get your crap together well in that we were we really were and then when we came back from the vacation and the will my husband's company lost his clients we actually ended up taking a job out of $2,000 a month six so where we were really getting into the decimal ball and being able to say things are they really doing well at it all of a sudden it came to you quit well now we...
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