New York man wants to borrow from 401(k) to pay $33K debt. Dave Ramsey is against it, but here's when it makes sense

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If you're successful debt, you're not alone. Experian reports that the mean U.S. user pays $1,237 successful monthly indebtedness crossed their assorted obligations (1).

Meanwhile, median play net for American workers were $1,196 during the 2nd 4th of 2025, per the U.S. Bureau of Labor Statistics (2). That’s an yearly wage of $62,192, assuming 52 weeks of work. And erstwhile we disagreement that by 12, it’s a monthly income of astir $5,183.

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This means the emblematic American could beryllium spending astir a 4th of their monthly income connected indebtedness payments alone. But portion digging yourself retired of indebtedness whitethorn beryllium hard erstwhile you gain a emblematic wage, the task should beryllium a batch easier erstwhile you person a ample salary.

That’s wherefore Dave Ramsey was appalled erstwhile a caller with a six-figure vocation precocious asked if helium should instrumentality retired a 401(k) indebtedness to wage disconnected his astir $33,000 successful indebtedness (3).

Dave, from New York, explained that his household income is $205,000. Ramsey felt that helium was making much than capable to escaped himself of indebtedness successful nether a year, fixed the comparatively tiny magnitude owed.

"Dude, wherefore don't you conscionable get connected a budget?" Ramsey said. "Clean this messiness up. Quit trying to find a hack."

After all, the archetypal measurement to paying down indebtedness is to make a strategy grounded successful pinching pennies to wage things off.

Generally speaking, determination are 2 ways to bash this: the avalanche method and the snowball method. The avalanche focuses connected paying down the biggest indebtedness first, past knocking disconnected the smaller ones. Meanwhile, the snowball method aims to physique momentum by paying disconnected smaller debts 1 aft the other.

But erstwhile dealing with debt, the archetypal measurement is figuring retired however overmuch you tin lend towards your main positive involvement each month.

Fortunately, figuring retired a fund tin beryllium easier than ever with Rocket Money.

The app tracks and categorizes your expenses, providing a wide presumption of your cash, recognition and investments successful 1 place. It tin adjacent uncover forgotten subscriptions, helping you chopped unnecessary costs and prevention perchance hundreds annually. This could interest up wealth to assistance wage down debts similar Dave’s.