Her original position that you should modify the rational approach to paying down debt (highest rate first) by adding $10 to the minimum of all debts, THEN paying more than that to the highest rate account was a completely OOHA rule (out of her a$$). Made no sense then and makes no sense now.

Let’s say average family’s bills are $2,500 per month. (You and I both know that’s low…) $2,500 x 8 months = $20,000 on top of their regular bills. It’s just not reality.

On paper, sure most people would love to make double what they spend and save the rest. But let me tell you this. My company talks to thousands and thousands of people every single month, and we have yet to see someone in a position to do this.
They have just enough to survive and maybe a bit more. In this case I think eliminating debt makes more sense.

I can see Suze’s logic to a degree, but I tend to look at the big picture.

Suze is just another part of the media driven by fear. The right thing to do for your finances should always be the right thing, no matter if we’re in a bear or bull market.

We paid off debt when everybody else was borrowing, and we saved when interest rates were higher (ING was up around 5%.)

Now we’re in a good enough position that we’re buying a house, with 10% down at bargain prices.

Don’t do what everybody else is doing, do the opposite. Don’t be normal, normal is broke.

This is why I am not a fan of these talking heads who claim to be “financial advisors.” Any financial advice should be done after a fact finding mission to uncover all speed bumps, rather than just sound bites on Oprah.

My husband brings in the bulk of the income and his job is as stable as it gets. We have enough saved that with the severance and unemployment $ we would be in good shape for 3-4 months. He is in a highly in demand field, and would anticipate a job hunt to take about a month.

We do carry debt which we are paying off, and we will continue with our plan despite Suze’s advice. For us it just doesn’t make sense!

Like everything else in life, I think this issue is one of balance – being able to balance the need to beef up savings and pay down debt at the same time. Which one you focus on depends on how safe you feel about your future.

Just like you need an small emergency fund before you pay down debt (for those unexpected expenses), you don’t want to start using cards again when you go on unemployment just because you didn’t save up. So in a way, what Suze is advocating is just a larger emergency fund.