When to Stop the Debt Snowball

from daveramsey.com on 27 Aug 2012

There you sit: debt snowball on one side and a big upcoming expense on the other.

So which gets paid?

If you are working Baby Step 2 and know a major expense is coming up, it's fine to stop the snowball for a little while. The important thing is to keep spending or saving your money on purpose. Stopping the snowball because you are burned out or just don't feel like doing it anymore harms you. But if hitting pause for a short time is part of your overall plan to succeed with money, that's smart.

A good example is when you are expecting a child. If you are, put the debt snowball on hold and stockpile cash. Once everyone comes home from the hospital healthy, take the money and apply it to your debt.

Other big expenses could be a child's braces or some medical procedure you'll need to have done. If you know you'll need $4,000 in 12 months, then pause the snowball to save $333 a month. Keep making the minimum payments on your debts to stay current, or even get an extra job so you don't have to stop the debt snowball.

As you can imagine, a big point of the whole Baby Step plan is to avoid debt and get out of it. When you know an expense is coming and you stop the snowball to save the money, you display wisdom because while you are technically not paying off debt, you also aren't accumulating more.

If you keep paying on your debt snowball and have nothing saved up, you'll borrow to pay the bills and kill your momentum. Since getting out of debt is 80% behavior, it's important to keep walking the walk, even when the going gets tough.

Don't beat yourself up if you halt your get-out-of-debt plan. You are still making progress even if numbers aren't going down on a computer screen. You are still using your money with a purpose. That's the important part. When you're intentional with your money, you'll eventually get to the fun part—making the last payment on your debt snowball.

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