Dave Ramsey Says To Hit The Pause Button To Pay Off The Debt
Dear Dave: I followed your plan, but recently I had a medical emergency. I am halfway through Baby Step 2 and paying off my debts using the debt snowball system. Given the circumstances, should I stop snowballing for now? —Brooke
Dear Brooke: That’s exactly what you should be doing. But make sure you only hit the pause button to pay off the debt. I’m talking about temporarily stopping the debt snowball and making only minimum payments on all non-mortgage debt for now.
Money is your umbrella when it rains, and you never know how long the rain will last. Even if you have great health insurance, you could end up paying a big chunk out of pocket. That’s why it’s important to save and have enough on hand.
Things like this are often just a bump in the road, so don’t be discouraged. They can be expensive and a part of life, but dealing with these kinds of issues doesn’t have to mean giving up control of your finances. Emergency issues, especially a medical emergency, come first. Then go back when things are better and pick up where you left off by eliminating debt using the debt snowball system.
You can do it, Brooke. God bless you!
Dear Dave: My husband and I just bought a small business with money. My sister let us live with her while we saved money for it, but things are starting to get a little cramped for everyone. The other day my sister offered to co-sign a house for us. Do you think this is a good idea? — Curry
Dear Carl: Ok, so you just bought a business. I like your entrepreneurial spirit and the fact that you saved and paid cash. But at this stage, you don’t know whether the business will succeed or not. Besides that, you told me you needed a co-signer for a house. If you need a cosigner for anything, it means you’re not financially ready for that purchase.
I know you don’t want to hear this, but you just have to forget about buying a house for a while. If I were you, I’d find a decent, cheap place to rent, and it would take two or three years to get the business started. Pay off all your debts while saving as much money as possible.
I want you and your husband to have a nice home one day. But right now it would be a burden instead of a blessing.
Dave Ramsey is a seven-time national bestselling author, personal finance expert and host of The Dave Ramsey Show, heard by over 16 million listeners weekly.