My husband and I just finished Baby Step 1, and we have our $1,000 in the bank for an emergency fund. Our daughter may have to have kidney surgery in the near future. Should we beef up our emergency fund, or move to Baby Step 2 and the debt snowball?
I know Iím the ďget out of debtĒ guy. I want everyone to experience what life can be like when theyíre debt-free and donít have to send their paychecks out the door to creditors
every month. But this little girl may need the kind of help only doctors and hospitals can provide. So, for now, letís push the pause button on your Total Money Makeover.
If I were in your situation, Iíd pile up as much cash as possible. Live on a budget thatís tighter than tight and scrape together every penny you can find. Hopefully, your baby wonít need surgery. But if that kind of thing is a possibility, the only smart thing to do is prepare for the accompanying financial hit your family will experience.
Donít feel bad about this either, Noel. If the surgery is necessary, you guys can jump right back in and start your debt snowball
after your little girl is healed. But right now, baby comes first. And if youíve already got $1,000 saved, youíre off to a good start when it comes to handling things!