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By Dave Ramsey

Syndicated Columnist

Dear Dave,

Should I cash in my 401(k) to pay off my car? I have just enough in the account to pay off the car and free up money in my budget.

— Marina

Dear Marina,

If I were in your shoes, and I could pay off the car in 18 months or less, I’d live on rice and beans — plus a very strict monthly budget — and just push through until that car payment was out of my life. If that wasn’t realistic, then I’d take out ads online and in the local paper, and sell the car as fast as possible.

Cashing out your retirement plan to make this happen isn’t a good idea. I love that you want to get rid of your car payment, but if you use your 401(k) they’ll charge you a 10% penalty, plus your tax rate. That means you’ll lose anywhere from 30 to 50 percent of it to the government.

I don’t know about you, Marina, but I think those guys get way too much of our money already.

— Dave