Crush Debt

Four Times You Should Pause the Debt Snowball

I wanna keep rollin’ on the river like Proud Mary, but I might have to let the debt snowball chill a little. And that’s perfectly fine. Really, it is.

We can get tunnel vision when focusing on a goal, but life happens and we must reconsider where we put our energy and our money. Sometimes it’s better to save it than pay off more debt.

Here are four times it’s OK to pause your debt snowball.

1. You dipped into your savings.

This is probably the most obvious reason, right? You get a flat tire (or two) and use your baby savings to cover it. To replenish the coffers, press “Pause” and put any extra money back into the fund for the next snafu. Because we know it’s not a matter of ‘if’ one will arise. It’s ‘when.’

2. You have a major life event on the horizon.

Surgeries, moves and births cost a whole lotta money. To avoid huge charges on a credit card, press pause on the debt snowball to shore up some cash. You’ll feel much better saving to spend than becoming further indebted.

Times You Should Pause Your Debt Snowball

3. You’re not sure of your next move.

Maybe just pause for one month to try to figure out the next step. You’ll want cash on hand if you have to move or pay for a certification for a better job. If you give all of your money to your Visa, guess where you’ll go when you have no savings and you need money again. That’s right! Visa. If you feel more stable after a month or two, then throw that extra savings back into the debt to start the snowball again.

4. You want to eliminate debt with the highest interest instead of the lowest balance.

Your debt snowball is supposed to roll from the smallest balance into the next. Well, what if two balances are nearly the same, but have different interest rates. That $623 student loan incurs only 1.9% interest each month. But that Chase Card’s gotchu for 24.24% interest each month. That balance is $825. The student loans accruing about $0.40 of interest each month. Chase’s accruing nearly $20, and you’re only making $30 minimum payments. That hustling backwards.

This was my predicament on May 1. I wanted to get rid of that credit card for the emotional win and peace of mind. And guess what! I paid it off on May 31—in just one month! Switching from the debt snowball to the debt avalanche paid off big time! Now, that student loan is in the crosshairs.

Have you ever paused your debt snowball? Why and how’d you decide to do it? Please leave your thoughts below.

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