Robbing anyone is never advisable, least of all yourself. Still when people take from an account which is for something specific, a vacation, your kids college education, a home purchase, retirement, for some need that is flippant, inconsequential and of the moment, robbing yourself is exactly what you’re doing. While having separate “checking” and a “savings” accounts may have gone the way of the dodo bird, the fact is keeping your money away from your baser instincts is sometimes the only way to go. However there are times when you will need to pillage the savings account, even against your better judgment. Here are four occasions when pulling out all the stops up to and including your IRA, 401K, CD’s, money markets, stocks, savings accounts, or cracking the porcelain piggybank are all necessary.
Life and Death Health Issues: This one is sort of a no-brainer. When you, your spouse, your child, or other loved ones need your resources, you must go to them with everything that you can. However there should be some kind of a limit. You may really like your third cousin twice removed who you met once at a wedding 15 years ago but contributing your retirement money to her health fund may be asking too much.
Bankruptcy: Again, something of a no-brainier. If you are suddenly unemployed, facing foreclosure on your home, dealing with constant creditors calling you at all hours of the day, and having your electricity and gas and water turned off, you may want to cash in all or some of those 5000 shares of that upstart company called IBM that your grandfather got for you 20 years ago.
Credit Cards: When you finally have that awakening (we all do it) when you realize that the credit card thing just isn’t working for you and you’re ready to pay them off and close them out, you may wish to dip into savings to do so. Especially if you’re younger or you have really high interest rates, here’s why. If you are paying 24% or 29% per month on eight thousand bucks, that’s a pretty steep amount you’re paying just in interest. Now if you’re young and you’ve got a house or you don’t want to buy a house but you’re comfortable and making money and you’ve got $15,000 sitting in a 30 day CD that just keeps flipping every month but you’re only earning 2% on that money, then it probably makes sense for you to hit that eight grand in one fell swoop and gradually pay your savings back over time. But don’t get sucked in and cut that card up!
Once-in-a-Lifetime Opportunity: Especially if you’re still young and have time to make this money back, dipping into your savings for a once-in-a-lifetime opportunity may be worth it. You have to decide what once-in-a-lifetime means to you but if there’s some speculative business opportunity you’ve been mulling over or if you’re an actor living in New York City and you want to fly out to Los Angeles for pilot season, you should do it! Go now, fly with the wind at your back and you could end up in the heavens!