We’re so close to having our home paid off. Should we dip into our emergency fund?

Dear Dave,

My husband and I are close to having our home paid off and being completely debt-free. Can we dip into our emergency fund to pay off the house?

Enid

Dear Enid,

I’m not sure I’d recommend doing this. I might think about it if your emergency fund is way too big, plus you have a very small amount left to pay on your home. But remember, your emergency fund should be three to six months of expenses — not income. On top of that, paying off your home a few months earlier isn’t exactly an emergency.

Believe me, I understand the feelings that go along with being so close to becoming completely debt-free. It can be tempting to throw a bunch of money at your house and get rid of the mortgage payments. Still, even as much as I hate debt, I wouldn’t put my emergency fund at risk to make it happen.

When you do things like that, Enid, you’re just begging for Murphy to come visit. The moment you write a big check and weaken your emergency fund for something that isn’t an emergency, the transmission in your car will go out or you’ll have to replace the central unit on your home. It’s not worth the risk!

—Dave