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When to Pause Your Debt Snowball

So you’re in the middle of paying off your debt using the debt snowball method, and then BAM: You find out you’re having twins. Double the kids means double the joy and double the bills.  

Is it smart to pause your snowball to prep for these bundles of joy?  

Whether it’s babies, car brakes or a busted water heater, life’s going to happen when you’re on Baby Step 2. So it’s important to know what to cash flow, when to use your emergency fund, and when to temporarily pause your debt snowball.

When should you pause the debt snowball?

No matter what life throws at you, it’s important to keep spending (and saving) your money on purpose. Don’t pause the debt snowball because you’re burned out or just don't feel like doing it anymore.

When you’re facing an unexpected expense, be sure to separate wants from emergencies. A new backyard fence for Fido is not an emergency. Don’t stop your debt snowball for that. You can save up for the fence when you’re debt-free and working on Baby Step 3.

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Also, you should be able to cash flow things like school clothes and your kid’s soccer sign-up fees. Just budget and plan for those expenses. Now, true emergencies, like a busted water heater or HVAC repairs, should be covered by your $1,000 starter emergency fund. That’s what it’s for.

But if you need to hit pause for a short time in order to deal with an unexpected—or expensive—situation, it’s OK. Just be sure to resume your debt snowball once you’re back on track with money and life.

Here are the most likely reasons you’ll temporarily pause your debt snowball:

1. You’re having a baby.

Congratulations! You’re expecting a baby. That’s great news. Unfortunately, the stork doesn’t leave diapers, wipes, car seats, baby food and a crib at your front door. You’re on the hook for those expenses. So continue to make minimum payments on your debt, and start stockpiling cash until the baby comes. Once everyone comes home from the hospital healthy and happy, restart your debt snowball.

2. You unexpectedly lose your job.

A job loss can turn your world upside down. Go into survival mode if this happens. Focus on the basics, like food, shelter, transportation and utilities. If you can, make minimum payments on your debt, but nothing extra.

While you’re looking for another job, pick up any side gig you can find. Wait tables, work retail, mow lawns. Do this so you don’t drain your emergency fund. Above all, stay positive until you snag another job. You can restart your debt snowball once your income is stable again.

3. Your family experiences a health crisis.

A serious medical diagnosis can throw your family into a whirlwind of emotions. During this season, it’s more important to get the care your family needs than to pay off debt. If a major surgery, hospital stay or expensive treatment is on the horizon, pause your debt snowball and cash flow your medical bills instead. You’ll get back on track when things return to normal.

4. You’re going through a major life-change, like a divorce.

If you’re about to go through—or are in the middle of—a divorce, you’re probably just trying to keep your head above water both emotionally and financially. During this major life transition, focus on maintaining your Four Walls: food, utilities, shelter and transportation. You can resume your debt snowball once you settle into your new normal.    

5. You have an outstanding IRS bill.

Pausing your debt snowball to pay the IRS is a smart idea for two reasons: First, their interest rates and penalties are really high. Second, they almost have unlimited power to collect your debt. It’s wise to get the IRS out of the way and then restart your debt snowball.

If you’re in a situation like this and need to pause your debt snowball temporarily, don’t beat yourself up. It happens. Just don’t lose momentum in the process. There are two things you can do while you’re in pause mode to help keep your motivation front and center.

First, use our free budgeting app, EveryDollar, to help you save for upcoming expenses and budget your money wisely. Second, listen to The Ramsey Show to hear from others who’ve been where you are. There are millions of people who’ve found themselves in hard situations and made it to the other side.

You’re going to make it to the other side too. Just be diligent with your spending now so you can restart your debt snowball later.      

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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