4 Reasons you should pause your debt snowball (And 3 reasons you shouldn’t)
Sticking with the debt snowball method can help you finally eliminate those unpaid bills and achieve debt-free living. However, we get that life happens, and there are certain circumstances where you may need to pause your repayment plan.
In this article, we’ll discuss reasons that warrant you taking a break from the debt snowball method, and reasons that just…don’t.
The debt snowball method is a payoff method in which you’ll prioritize paying off your lowest debt amounts first. You’ll still pay the minimum amounts on your other debts, but you’ll put extra money toward eliminating the smallest balance. Once that’s paid off, you’ll focus on paying down the second-smallest debt. The debt snowball can be very gratifying and motivational since you’ll be able to quickly see progress.
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Sticking with the method can help you inch toward that debt-free lifestyle. But there are times when it can make sense to take a break, including:
If you lose your job, you should keep making your minimum payments on all your debts, but instead of putting extra cash toward the smallest payment, you should put it into a savings account. You can’t predict when your next job will come along, so until then you should save instead of snowball. Once you secure your next role, you can put your extra savings back into paying off debt.
We all know that moving is basically the worst. And the farther you move, the more expensive and stressful it can be. From renting movers to staying in hotels, it can really add up. So, if you’re getting ready to go cross-country, consider pausing the debt snowball method until you’re settled in.
Whether you’re welcoming a new baby or sadly experiencing the death of a loved one, you may want to stop snowballing. Any change to your family dynamic can be expensive and overwhelming. Give yourself time to adjust and process, and resume when you feel it can be beneficial for your mental health and your finances.
Visits to the hospital can be jaw-droppingly expensive. Maybe you’re pregnant and need to set up a birthing payment plan. Maybe you broke your toe and had no idea how much emergency care was. Whatever the case, you may want to pause your debt payoff plans, heal, and then continue.
And then there are times when you have no excuse to pause, like:
While a 5-star stay in the Maldives sounds divine, it’s no reason to stop paying off your unpaid bills. In fact, it sounds like an excellent way to sink deeper into debt. So, no, you unfortunately shouldn’t take a break from paying off debt to live large abroad.
Fuchsia and silver might be in this season, but just because your wardrobe is a sea of grey doesn’t mean you should swipe serious plastic to stay en vogue.
If your ceiling is leaking, we give full permission to stop the snowball and patch your roof. But you want a hot tub? Sauna? Wine cellar? Unless you have a doctor’s note that says you need Pinot Noir as part of a rare medical condition, our answer is a hard no.
Pausing your debt snowball can be a good idea in some, but not all, circumstances. If you need to pause, then pause—just make sure you have plans to pick it back up when the time is right.
Stefanie began her career as a journalist, reporting on options, futures, and pension funds, and most recently worked as a writer and SEO content strategist at a digital marketing agency. In her free time, she enjoys teaching Pilates and spending time with her daughters and Siberian Husky.