Dear Dave,
I’ve paid off $45,000 in debt in the last three years, and I’m down to my last credit card before I’m debt-free. It has a balance of $9,000. My Roth IRA has really taken a beating lately, and it’s down to about $14,000. Should I cash this in to pay off the credit card?
­­ Matthew in Lexington, Ky.

Dave Says: No way! You’re within a few months of being debt-free, man. You’ve made tons of progress, so now’s not the time to give up on your Roth. I know you think this is a good way to kill off the rest of the debt and be done with it, but I want you to take a deep breath and finish your swim. Now, if the Roth is in a bad mutual fund like if its still sitting at half of what it was worth a few years ago you might consider moving it to a better one. But the truth is that most mutual funds are down right now, because the market as a whole has been taking a beating. I know mine are down, but they’re recovering. Never cash out retirement to pay off debt, unless its to avoid foreclosure or bankruptcy. You’re a long way from either one of those situations!

Related: What is a Roth IRA?

Kids need financial coaching
Dear Dave,
My daughter is a freshman in college, but I didn’t save for her education. My parents said it was my job to pay for my college, and that’s what Ive told her. Shes going to have about $12,000 in student loan debt after her first year, but how do I talk to her about not ending up with $50,000 in debt when shes through?
Paul in Minneapolis

Dave Says: If you want her to pay for college, then, as her dad, you have to coach her on how shes supposed to come up with the money and manage it properly. Shes already behind the eight ball because it sounds like you didn’t teach her the correlation between work and money earlier. So, you’re going to have to get real busy, real fast, unless you want her to be drowning in debt when she graduates. I think you owe her a leg up at this point. Twelve thousand dollars doesn’t just magically appear in an 18-year-olds hands. I’m perfectly OK with kids working through college and parents cracking the whip when it comes to acting responsibly. But if you expect them to pay for it, you first have to show them how to do that. Otherwise, they’re going to hit the default button and wind up $50,000 in debt when they graduate. That’s a really bad plan! If you have some money, I think you should help her along while teaching her how to make money, save and budget. Then, maybe shell be prepared to pay for her last couple of years with some good, hard work!