re: Tips for paying off debt?

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Dave Ramsey is simply out of touch with reality if he truly believes $1,000 is a good starter emergency fund. If anything, $5,000 is a good beginning to an emergency fund in today's reality. $1,000 may have been good enough to start with in 1995 or 2000 but not in 2015.

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This was brought up on Dave's show a couple of times, his response was that if someone is already thousands of dollars in debt the probability that they can accumulate $5,000-$10,000 for an emergency fund as step one is small. Just like paying of the smallest debt first regardless of interest rate doesn't make mathematical sense it gives the person a sense they have accomplished something toward their goal, the $1000 emergency fund is used as a starting point because it is more likely to be achievable, and at the same time provide a little relief for small emergencies. When you have only debt $1000.00 can make a difference. In his plan if you are forced to use the emergency fund the debt payment should be stopped until the emergency fund is back to $1000.00 so that somewhat take care of the case of having multiple emergencies that exceed $1000.00.