He says we're planning an addition for $125,000. Should we pay for it in cash or use a HELOC? We have about $104,000 in cash currently, and our gross income is $165,000. We're 27 years old, save 15%, and our Roth IRAs are at $60,000. We prefer to keep the cash so we can invest it. What do you think?

Whoa, whoa, whoa, whoa! There was a lot there, right? Whoa, okay. Home renovation, but also here's all of this other...

Kaden, the renovation is going to be $125,000. This is not a small renovation. Uh, we have $104,000 in cash currently. Our gross income is $165,000. We're 27, save 15%, and we have Roth IRA savings done. We don't know what their spending rate is, though.

But here's what I know: I know they've got $104,000 in cash. And look, I don't do a lot of really good public math, but if I got a thing that cost $125,000 and I know that I've got $104,000...

and I'm going to try to pay this thing in cash, I'm going to use all my cash...and well, what about emergency reserves? I'm assuming that's what the $104,000 is for. Yeah, but you just told him he's going to spend that and then some. That's the point that...

I'm making. There's no way, in my opinion, Kaden, you're not in a position where you even have the choice or the option to pay cash right now because what you can't do is, whenever you're doing a home renovation or you're buying...

A second property, or you're closing on a home, or whatever the thing may be, you just can't spend your cash all the way down to zero. We see people do this over and over again. It's going to put you in a precarious situation that

you do not want to be in. So when he asks a question, "Should I pay cash or do a HELOC?" I don't really think he actually has that choice. Agree, disagree? I think what's going on, and I kind of can hear it because it's almost like

theme music. I hear Kenny Loggins; I see you playing the part of Goose, and I've got my Maverick helmet on. This does this every time. This sounds like the danger zone. I mean, it really does. I mean, I hear the music accompaniment kicking in.

It's B; it's exactly right. You have... I think this is going to be, Kaden, if I had to tell you, I think it's going to be a balance of both. You're going to need to figure out what your burn rate is on emergency reserves. You've got to have 3

to six months in step for the financial order of operations, and then so that you're going to have extra, and that money can go right into that home improvement project that you've been saving for. But then you're probably, if you can't come up with the gap, maybe the

home equity line, but you've got to... but I want to tell you before I give you permission to do that, you've got to begin with the end in mind. How do you pay back the renovation? Obviously, if you've got $104,000 of savings, you are able

You're disciplined in living below your means, but ensure this aligns with your financial plan.  Don't neglect Roth contributions, retirement matching, and other crucial financial benefits.

You're building future financial opportunities while addressing current needs. I'll play the 'mean one' for a moment. Kaylen mentioned saving 15%; however...

Was this $125,000 home renovation a necessity or a want? If a need (e.g., expanding for a growing family), that's understandable.

But if it was a bonus room, pool, or deck upgrades, you need to be further along in your financial journey before undertaking such expenses.

At 27, saving only 15% is insufficient; aim for 25%.  While $60,000 in your Roth is great, the $125,000 renovation requires careful consideration.

At 27 years old, saving only 15% is insufficient; aim for 25%.  While $60,000 in your Roth is great, the $125,000 renovation needs more careful consideration.

Big nut if you go to moneyguy.com/resources and plug that $125,000 into the wealth multiplier, I want you to see how much this renovation is actually costing you in terms of future dollars you're walking away from.  Make sure you're making

this decision at the right part of your financial journey and not accelerating it prematurely. That's my opinion; that's my cold water. Uh, you agree with that? You're not going with that? Thanks for being the heavy; thanks.

SIX-Figure Home Renovation??

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초기 질문: 125,000달러 주택 리노베이션을 위한 현금 대 HELOC 비교

125,000달러의 주택 추가 구입을 위해 현금 또는 HELOC를 고려 중인 부부.

현금이 $104,000, 총소득이 $165,000, Roth IRA가 $60,000입니다.

27세인 그들은 수입의 15%를 저축합니다.

이들은 투자 목적으로 현금을 보유하는 것을 선호합니다.

리노베이션에 사용 가능한 현금을 모두 사용하면 긴급 자금이 남지 않습니다.

리노베이션에 모든 현금을 지출하는 것은 재정적으로 위험하고 바람직하지 않습니다.

현금 보유액이 0으로 고갈되면 재정 상황이 불안정해집니다.

이 커플은 전액 현금으로 결제할 수 있는 옵션이 없을 가능성이 높습니다.

권장 접근 방식: 균형 잡힌 전략

3~6개월의 비상 저축을 유지하세요.

긴급 자금을 확보한 후 리노베이션에 적립금을 사용하세요.

남은 비용을 충당하기 위해 HELOC을 고려하세요.

로스 기부금 및 은퇴 매칭을 포함한 재무 계획의 우선순위를 정하세요.

리노베이션의 필요성 및 장기적인 재정적 영향 평가하기

리노베이션이 필수인지, 아니면 원하는 것인지 결정합니다.

특히 재무 여정의 이 단계에서는 욕구보다 필요를 우선시하세요.

15%의 저축률로는 충분하지 않으므로 25%를 목표로 하세요.

125,000달러 규모의 리노베이션이 장기적으로 재무에 미치는 영향을 신중하게 고려하세요.

부의 승수를 사용하여 리노베이션의 기회 비용을 평가하세요.