Drain My 401(k) To Fix Sewer Damage On My New Home?

Brought to you by the EveryDollar app. Start budgeting for free today. I'm 27. I just recently bought a home. I do have three young kids and a stay-at-home wife, and I'm expecting my fourth child within the next two weeks, give or take some time. And since I got into the home, I did have a savings account that dwindled down a little bit, that needed to be repaired for $3,000, and then small things around the house. Within the last month, my sewage drain, I think, has a crack in it. Oh, no. Caused my entire home to smell like sewage, and now I have like drain flies pretty much throughout my home. What'd your plumber say? So, I had two different plumbers come just to get two different opinions and quotes. One of them said it is a drain pipe that does have a crack. The house that I got was a remodel. Everything was pretty much new, including most of the above-ground plumbing, but the sewage stuff was all the original pipe work. And he said he needed to get a camera scope in there, and he did see where it was, and it was under parts of the foundation under the ground. Are you on a slab? Yeah. So, where the pipe is cracked, it's part of a slab. It might be right next to it or underneath it, but the main thing is that because I'm having drain flies and all these small issues that come along with this, I do have a previous employer's 401k that's about $23,000. I'm in baby step two. My only debt is my wife's van. It's about $14,000. My actual savings is about $2,500, and I have $2,000 for a sinking fund for my personal car that may go God knows when, and then a $1,000 emergency fund. The only other option that I would have to fund it if I don't use the 401k would try to be to finance it or use money from my in-laws, and I'd pay them back with little to no interest. But I just wanted to get your guys' opinion because I know it's shunned upon to take from your 401k even though I'm not putting anything in there now. Let me ask you a few questions about the work. Anytime I've ever had plumbing snaked, they show me the pictures. Have you seen the cracks? Not yet. I'm going to the first one told me. The main issue is that what they told me today, when I was cutting my grass yesterday, I did see a puddle of water on one of the corners of my house, and my father-in-law came, and he helped dig up some of that corner to see what it was, and it ended up being pretty much poop and stuff backing up and flowing up. Nice. How much money do you have to make where budgeting is just optional? If you chose C, watch this. She makes about $170. I make about $115. Hold on. Did you go back after you paid off everything, borrow some more money? Oh, yeah. Oh, no, Carlos. We like to go here and there, and we get this Mercedes. Oh, no. We went full South Beach. It's not just about how much you make. It's about having a plan for what you've got. Start budgeting with every dollar for free today. As far as the urgency goes, I do want to try to get it done just because I'm going to have a newborn. Of course. Dude, you got two guys with kids. We get it. You got storm on storm on storm right now. Yeah. Here's what I want you to think through. If they come out and they say, yeah, it's cracked, and we have to dig up your entire yard from the street to your foundation and completely redo this whole thing. It's old cast iron. It's rotted through. It's iron. It's useless. There could be, we can drill a hole in it and pump it, completely pump it out for $600, and that will get you two months or three months. Then we'll come out here and pump it again, and I'll get you three more months. The temptation is, and I totally get it, dude, both George and I, we both get it, is I want to just do all this right now. I need to get it all fixed right this second, whatever, but I always want you to remember generally in these kinds of situations, unless your house is falling over, there's step one, the perfect option, there's step two, there's step three, there's step four. What do I have to do to limp along while I'm still gathering and saving money so I can do this whole thing right? It's basically what gets us by versus what gets it completely fixed. Right. Since I'm not on a septic tank, I'm on my city line. I'm in the suburbs of Chicago. Based on what they find when it's dug up, how would you guys go about it then as far as- There's going to be multiple stages. If two guys come and give you the same issue, they both snake it and they're both like, yeah, brother, your pipe all the way to the street is screwed up. I'm going to want to call the city and see if they have any investment in this thing too. Is part of this line theirs? I'm also going to then, because then you start phase two, all right, how much is it going to cost for you to fix it? How much is it going to cost for you to fix it? I'm going to call four other companies out here to see what they would charge. I'm going to do my due diligence to see how I can get this thing, not the cheapest, but how I can get it done with the most reputable company done the right way for the best price. Okay. The plumber that saw the issue today did say not to use any of the washers, dryers, shower or anything, just because of the fact that poop was coming up from that little corner and the drain was busted. I'm just waiting to get an actual visual on the pipe and- Is there somewhere you guys can go temporarily? Yeah. My in-laws extended their hand for us to stay there for a couple of days. I would definitely do that. I'd call the city too and have a city sewage inspector come out and look at it and see, because if it may be backed all the way down the middle of your street for half a block and the city's got work to do, yeah. I would also contact your homeowner's insurance. Have you done that? No. I do have a warranty, but they won't cover it. I didn't think to contact my homeowner. The new home that you just bought, why won't the warranty cover that? The company said they don't cover any type of sewage plumbing, only above ground, which didn't make any sense to me. Here's your home. Go find every piece of documentation for that warranty. Go pull up your declarations for your homeowner's insurance. Upload it to AI and see if there's a way that this can be covered, because your insurance company might say, no, we don't cover that. You might find that you appeal it and go, nope, they're going to cover it now. They might then cover your displacement to go rent a home somewhere while it gets fixed. I don't want you to feel like there's only one option right now. I'm going to fight this thing to offload it as much as I can. It's a part-time job. If you think of a part-time job that you might earn $10,000, you'd probably take that part-time job. This is the same thing. You may save yourself 10 grand. What did that first plumber quote you to dig up the whole line from your house to the street? He said, well, the line is under six feet of dirt and it's in a crawl space under my basement or under my home in my basement. He said it could be at $6,000 to $10,000, just depending on how much line is cracked and how far down he has to dig. If you think about it, give yourself that exercise too. What does life look like? The numbers you just gave me for your car fund, you've got six grand in your pocket right now. Between your sinking fund, your savings, and that car repair fund, you got a good $5,500. Within a month, you could have six grand. You might not be in as bad shape as you think. What's the car loan is $14,000. What is that van worth? It's probably worth about the same, about $14,000, $15,000. It's a 2018 Honda Odyssey. You got four kids, so you need a van. I get that. But I was wondering if it's worth $30,000 and you guys can downgrade in van for now. That could solve some problems too. I definitely would not touch that retirement account. I know it's tempting because it feels like old money in your old coat pocket. But man, that's like taking a loan at 35% interest with the penalties and taxes you're going to pay on that money. It is not worth it. If you just leave that money alone to grow for the next 30 years, it's really a six-figure mistake you're making. Can I talk to you just dad to dad real quick, husband to husband? I promise you this will pass. It feels like it's all happening. You're having a new kid on the way. You've got in-laws saying you can come live with us. You've got a car that might die. It all feels like it's happening. Let's laser beam on the plumbing issue and get this thing cleaned up and let's celebrate this new kid coming and let's do everything we can to scratch and claw and pay for cash on this deal. And worst, worst, worst case, if the in-laws want to be generous and help you guys cover this for now, go for it. Create your free every dollar budget today. The simplest way to budget for your life.