Sanjib, Your analysis is spot on and you state it well. I came to the same conclusions 20+ years ago when I used 401k loans to finance our son’s college education. I am convinced that the press and some financial advisors advise against using this tool based on their assumptions that people will not pay back these 401k loans, or that they will stop or reduce making 401k contributions while a 401k loan is outstanding, or that they will take out 401k loans for reasons other than funding necessary expenses. If you avoid these pitfalls and the interest you must pay on the 401k loan is relatively attractive, then I don’t think there is a problem with using 401k loans to finance necessary expenses.
one way or another, in order to get the full enjoyment of your soaker tub you should either replace the existing water heater, or add a supplementary one. While you may not want to part with the extra money (and in the context of what it costs to remodel a bathroom it’s not that large in my opinion), as part of a major bathroom remodel, it is well worth it. I would not look back. The old water heater is just a sunk cost.
Jonathan, You will remain in my thoughts and prayers. I have benefitted in so many ways from Humble Dollar and thank you for making such a positive difference in my life. Thank you so very much.
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Sanjib, Your analysis is spot on and you state it well. I came to the same conclusions 20+ years ago when I used 401k loans to finance our son’s college education. I am convinced that the press and some financial advisors advise against using this tool based on their assumptions that people will not pay back these 401k loans, or that they will stop or reduce making 401k contributions while a 401k loan is outstanding, or that they will take out 401k loans for reasons other than funding necessary expenses. If you avoid these pitfalls and the interest you must pay on the 401k loan is relatively attractive, then I don’t think there is a problem with using 401k loans to finance necessary expenses.
Post: Logic Check: 401(k) Loan – Paying Taxes Twice?
Link to comment from November 2, 2025
one way or another, in order to get the full enjoyment of your soaker tub you should either replace the existing water heater, or add a supplementary one. While you may not want to part with the extra money (and in the context of what it costs to remodel a bathroom it’s not that large in my opinion), as part of a major bathroom remodel, it is well worth it. I would not look back. The old water heater is just a sunk cost.
Post: Replacing the Replacement
Link to comment from March 6, 2025
Jonathan, You will remain in my thoughts and prayers. I have benefitted in so many ways from Humble Dollar and thank you for making such a positive difference in my life. Thank you so very much.
Post: The C Word
Link to comment from June 16, 2024