Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge,

skills, insight and encouragement you need to live a rich and meaningful life now, while building

a plan for financial freedom in 10 years or less.

My name is Joshua, I am your host. I am your friendly financial

philosopher. I am your fellow financial freedom fighter and your fellow voyager on this incredible and exciting journey we call life with a special

emphasis here on radical personal finance on finances which touches every

area of life.

Today we answer a question from a listener who writes in and says,

I'm currently facing a challenge.

I face, I have about $10,000 in my 401k,

and due to unemployment, I have accumulated $6,000 on a credit card debt.

This is a result of my unemployment and also not paying attention at the right time.

I didn't take your advice long ago and so now the question is this should

I take money out of my 401k in order to pay off my credit card. Is this a good idea?

Well I'm going to answer this question, of course, for this listener, and my hope is that an

answering for the listener I'll be able to help this listener, but my hope is also that if you're

not in the situation.

Unemployment is very frequently a major, major cause of stress, financial stress especially and that financial stress can have long lasting effects and so I want to help you to help other people to think through this problem.

The frequent answer that you hear from many people is

no don't take money out of your 401k account because you'll incur taxes and penalties and

fees. Well that may be true but that's not necessarily my answer. I want to dispel with that

myth right up front. The most common focus in answering this question that people

...