Generally, I recommend letting the city hit 3 population before letting the settler finish, but ultimately you can make your judgment using several factors, including: that city's current tiles, where your citizens are working in that city, the state of your empire as a whole, current units, intended settlement destination, and more.
Remember that when you finish a settler, the current population in the city where they were built drops by 1 to represent that. This always impacts growth and production in that city, with particulars depending on which tiles your citizens in that city were working--in this case likely making it take more turns to reach population 2 again than pausing the settler to reach population 3 would have, and delaying the next few builds in your production queue on similar reasons.1
If this is just one of your many cities, that might not be a big impact. If this is your first city, it might have a bigger cascading impact down the line from a slightly slower start.
There are other reasons you might want to switch for a bit and let the population keep building. Most apply to multi-city empires:
- You are in a position where you need an escort unit for the new settler and you realize you don't have one available, or near enough (nearby barbarians, at war with someone, etc.)
- You are in a period where you're focusing on districts and you're about to hit a population tier that will increase the district limit in that city
- You are about to end an era and lose a particular era bonus (dark or golden) that will make a certain build easier/cheaper/more valuable/give something extra when it finishes and can manage to finish the build before it expires
- You are about to make a particular policy or government obsolete via the tech or civic trees and lose an associated bonus that makes a certain build easier/cheaper/more valuable/give something extra when it finishes and can manage to finish the build before the research completes
Some situations for finishing the settler first:
- You have more than one city and it won't make a big impact overall if this city is reduced to the slower pace of 1 citizen for a while, or you can support the loss of food/production via internal trade
- You are currently unable to swap government policies outside of civic advances, you're coming up on a new civic that will let you swap, and you need to switch out a policy giving a discount on settler production in favor of something else you need
- You are about to lose an era bonus making settler production cheaper and want to pump out as many as possible now before it expires
- You are in a settlement race with another civ over a particular area and need as many settlers as possible as fast as possible
 Personally, I never make settlers in cities with less than 3 population for this specific reason. I also only play on Prince difficulty and tend to play games like it's Utopia Sim, so, YMMV.