Dave Ramsey Said This Money Move Is 'Like Climbing a Mountain With Weights Tied Around Your Ankles'

Are you making it harder to accomplish your financial goals?

If you want to be successful at managing money, you need to have some financial goals. 

Unfortunately, finance expert Dave Ramsey believes you may be making a big mistake that prevents you from achieving them. Ramsey has said that this error is "like climbing a mountain with weights tied around your ankles."

Are you making accomplishing your goals harder for yourself?

According to Ramsey, one of the biggest mistakes you can make when trying to effectively manage money is working toward other financial goals when you still have debt. 

"Going after your money goals when you still have debt is like climbing a mountain with weights tied around your ankles," the Ramsey Solutions blog reads. "As long as you're making payments, you'll always feel like you're way behind where you want to be."

Ramsey believes that if you begin investing while still repaying debt, you'll end up with less money in the end. He explained that the longer you take to pay off your debt, the more interest you owe -- and the more restricted you'll be regarding what you can do with your funds since some of your money will have to go to creditors. But, if you get serious about debt payoff and free up your income to invest, then you won't have to worry about these interest charges and can put more away for your future. 

"The best thing you can do for your financial future is ditch your debt so you can free up your income and start building wealth faster," Ramsey explained. 

Should you follow Ramsey's advice and focus on debt payoff? 

So, is Ramsey right? Should you prioritize debt repayment and put all of your other financial goals on hold while you're working on retiring your debt?

The answer is, it depends. In some cases, it makes sense to prioritize becoming debt-free ASAP. If you have credit cards and are paying a high interest rate, for example, then you probably want to make extra payments to your cards before you begin putting a bunch of money into an investment account. You could be paying 17% or more on your cards, and it is unlikely you would earn more than a 17% return on your investment if you bought stocks, bonds, or other assets that produce income. 

Now, you'll still want to contribute enough to your 401(k) to get any employer match -- even if you have credit card debt -- before paying extra on your cards. Otherwise, you are missing out on free money and won't get that opportunity back. But, once you've done that, if your interest rate on your loans or cards is higher than what you could earn by investing, you should pay off debt first as Ramsey suggests.

But if you have a lower interest loan such as a mortgage loan or even a personal loan with a low rate, it does not make sense to put off other financial goals just to pay that down. You could end up missing out on opportunities, such as the ability to benefit from compound growth and earn a higher return by investing. 

The bottom line is, you should carefully consider your own unique situation to decide what goals to prioritize, rather than just trusting Ramsey's advice that debt payoff always needs to be the priority.