economic areas and if you make more than a certain income. Most people who have debt don’t have much in savings. His main goal with the “thousand dollars in the bank” is to make sure that when you cut up your credit cards and the car gets a flat tire, you don’t go looking for the crazy glue! The thousand dollars is just a safety net. I agree that if you are in Baby Step 2 for more than 18 months, you have a good chance of getting hit with a Murphy issue. We were in Baby Step 2 for 5 1/2 years. Luckily our $1,000 got us through. But we had to do a lot of juggling when we got hit with a big bill. I would have had a bigger savings or paid off our debt sooner, but having self-employment income and a spouse with different ideas, there were lots of compromises along the way.
The faster you pay off your debt, the better off you will be. Then you will be able to put that 5K back into your savings quickly.