Literary Liaisons

A blog about writing and all things story…

Do NOT cash out your future

This weeks Writers and Money Mondays question is from romance writer, Julie in New Orleans:

“I write romance novels (not yet published) but what I’m going through doesn’t feel like romance. We are planning to wed in May of 2016. We have about $10,000.00 in credit card debt. We are also buying a home this fall with the money ($13,000) we have both saved for the last two years. The down payment and closing cost are leaving us a bit strapped. My spouse thinks we should take the money out of our 401k’s, since we have less than $7000.00 combined. He thinks they’re so small it won’t matter much and that we can start over again later. Is that a good decision, or should we wait to get married for when we can afford our big dream wedding?”

Oh Julie, first, congratulations on your upcoming new home, and marriage. However, you are already dancing on a

slippery slope. If you have $10,000.00 in credit card debt and are spending your two year savings on the purchase of a house, you are doing things a bit backwards. First, never cash out your future for one day of bliss! Never! It is not a good idea to cash out your 401k. That $7000 (if left alone, and assuming a 7% return) would be worth over $35,000.00 by the time you are 65. Leave it alone.

Second, take that savings and apply at least half to the reduction of your debt. Go to and calculate how long it will take you to pay off the rest. To have saved $13,000.00 in two years is excellent! That tells me you can get rid of your debt in record time.

Now, buying a home is always a good investment, but sometimes you have to look at what your short term needs are and readjust your goals. Buy a less expensive first home, or condo (don’t forget home owners association dues). Finance by using a first time homebuyers program, and ask the seller to pay your closing cost. Adjust to the overall cost of homeownership for a year or two. Then take your equity (and no doubt, savings) and buy bigger and better when you can comfortably afford, and when you understand the full ramifications of homeownership (taxes, leaking roof, utilities, etc.). Going into a large purchase with your eyes closed can be a rude awakening.

“If ignorance is bliss, why aren’t more people happy?”


As far as the wedding of your dreams; because you’ve already begun a financial life together, you need to address your current responsibilities first (debt, savings, 401ks, and a new home). Instead, consider a small and intimate wedding this fall.

By protecting your finances, you safeguard your marriage from arguments that can be prevented by using some common sense in the first place. Remember, one of the top three reasons couples break up is because they argue over the stress of their finances. As a romance writer you are probably learning how quickly romance can be drained by financial stress. Best of luck in all (hopefully you’ll be published soon) and your wedding will be a dream you can remember fondly the rest of your life.



This entry was posted on July 20, 2015 by in Uncategorized.
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