WAIT UNTIL I’M DEBT FREE?

debt-freeOne question I hear regularly: Should I wait to do X until I’ve paid off this debt?

Dave Ramsey has weighed in on this on a number of occasions. His answer: When it comes to getting married or having kids, generally there is no such thing as a ‘perfect’ time. These life changes are more important than your financial goals, so they move up the priority ladder of your life. Here are two examples of his advice on that:

http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=120070

http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=128732

I consider this an extension of Jesus parable of serving God OR money. You can’t serve both. Getting married or having children is in a very real sense “laying down your life” – it is the life of a servant that Jesus calls all his followers toward. Your personal financial goals aren’t as important as the life of your future child.

For that reason I advise continuing to pursue financial objectives while life changes happen.

The other context for this question usually involves a large purchase.

“Should I pay off all my debt (or car, or student loans) before buying a house?”

That’s a very different question. That question is a disguise for “Can I increase my lifestyle?” Ramsey has a pretty strong opinion on this one: Pay it all off first. Examples of that:

http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=8340

http://www.daveramsey.com/blog/make-it-happen-dream-house

http://www.daveramsey.com/davesays/column/column/dave_says_2012-05-22/

Dave Ramsey isn’t alone in this opinion. In America we are experts at creating necessities from what are truly lifestyle upgrades. I have really heard sensible people in my social circle use the following:

“I need a safe reliable car for my new child.”

“We need a 4th bedroom – our family just doesn’t fit in this house anymore.”

“We needed to be in this school district for our kids.”

“I need this (gigantic gas sucking manhood ensuring) truck for work.”

There are unlimited varieties of these statements, but if you’ve traveled anywhere outside the USA you know this is crap. Millions of people live without these silly luxuries every day. It really is justification of the lifestyle choices we want to make.

If you want a bigger house in a different school district with a nicer car in the garage – I encourage you to go for it. It isn’t immoral to own these things. But there is an appropriate time to acquire them: When you can afford to pay for them.

Going back to our original question: Should I wait to do X until we’ve paid off this debt?

It may be helpful to think through your scenario with the following question: Does this decision demonstrate my servant-hood toward myself/you/us? “Do you want to stand out? Then step down. Be a servant.”

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