The Ramsey Show - App - Live Like No One Else So You Can Live Like No One Else! (Hour 3)

Episode Date: December 22, 2023

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically in your money, in your work, and in your relationships. The phone number is 888-825-5225. I'm Ken Coleman. Jade Warshaw joins me. 888-825-5225 is the'm Ken Coleman. Jade Warshaw joins me. 888-825-5225 is the number we'd love to coach you up. Merry Christmas, everybody. Let's get to it this hour.

Chris is joining us in South Dakota. Chris, how can we help? How's it going, guys? We're having a blast, man. What's going on with you? Awesome. Well, earlier this week, my wife and I paid off the rest of our debt. Whoa! Come on!

All right! Let's celebrate. How much? In total, let's see here. It was $40,000 for my pickup, another $28,000 for her car, and a few odds and ends along the way. So I'd say $70,000. Nice! In about three years. Way to go, Chris I'd say $70,000. Nice. That's up in about three years. Way to go, Chris. How's that feel? Feels really good.

Man, your debt-free Christmas, that's going to be a special day, isn't it? Yeah, that's what we told each other we were going to do for our Christmas gifts to each other this year is we're just going to pick it up and we'll call it a wash. Oh, man, that's great. That's awesome. Congrats. What can we do for you today? So I don't know the baby steps as well as I should.

However, my predicament now is that we're debt-free. The house is paid off as well. Wow. I want to start farming. That's always been my goal, but it's very expensive to start farming so do i invest my money into my retirement or do i just start saving up little by little and put down on some acres you can do both biggest question you can do both um congrats number one on having no home payment you left out that little nugget of wonderful information um so yeah assuming let's

let me kind of pull us back a little bit so that you have no consumer debt you know you have no home debt um do you have any other money saved besides retirement like a emergency we've got the 85 000 in the bank 85 000 in the bank. So that's, I'm assuming, well beyond three to six months of expenses. How much do you earn every year? Myself is about $100,000 and my wife is about another $40,000 to $45,000. Okay, so you guys are $145,000 a year.

You got $85,000 in the bank. So let's really look at this. Is there a way, if you had to say three months of expenses, basic expenses, what is that for you? Oh boy, now the pickups are paid off. It's minimal. Exactly. So cell phone payments are $200. I'd say probably $500 a month, if that, for everything, including all of our utilities. Oh, wow.

That doesn't include groceries, though. Yeah, you need to think about your... No, that doesn't include groceries. So a family of three, I don't know, $300 a month. Okay, let's say... Let's round up to two grand a month. Yeah, let's say $2,000 or $3,000 a month, all right? And so that's $9,000 or $10,000, just for a good measure. Let's say you keep $20,000 as three to six months of expenses.

All right. And then you can turn around and take that other 65,000. And now we get to decide, okay, we got $65,000. Are we going to put this towards land or real estate or whatever it is that you've said you want to do? So we're going to earmark that over there. You and your wife can decide what happens with that money. The next thing I want to make sure you have in place is with your incomes, are you guys investing 15% of your income every month?

So not yet. I took a new job here recently and I'm not allowed to have a, not allowed is the wrong term. They don't offer a 401k until I've been here for about a year. Okay. So I still have eight months roughly until I can start investing in that. I've had a 401k before in my previous jobs. Okay. My wife does like a 403b. Okay, great. So I mean, she's putting in, she takes care of insurance. And I mean, after taxes, it's not much of a paycheck that she brings home. Well, between the, so they're automatically pulling some into her 403B between the two of you. And this might mean that you need to go

and open some Roth IRAs between the two of you. I want you investing 15% of your combined income each month. So that's, when you walk away from here, that's the answer to the one question of, hey, do we need to start putting towards retirement? The answer is yes. And the answer is that 15% of your guys' income each month. So whether it's going into her 403B, I'd rather you guys start with the Roth IRAs and do those first. And then if you were able to max those out and

there's still money left, then move it on to her 403B. And then by then, if you still have money left over, you've got your 401k that's opening up. So that's kind of the order of business that I would do that. And then again, you've got this $65,000 there that you can say, okay, with any extra income and money that we have, we can add to that. And we can start piling up cash in order to make your next real estate or land purchase. Is that fun? It does. However, the way I've been thinking about it is buying land at, let's say, $7,000 to $10,000 an acre a year. That's my next career goal. I want to be a farmer.

But how to pencil it out with the interest rates right now at the bank, trying to buy loans and try to get land, it just doesn't pencil out. So I was wondering if instead of doing the 15% for my retirement, I mean, land would be a retirement option as well. If I ever had to sell it or if I rent it out, that would bring a good living as well. It would, but it is 15% for that. It is, but you want that portfolio to be balanced. You don't want it all in real estate. Just like, do you see what I'm saying? You do want to have a nest egg that you know you can get to cash. We're not waiting for a buyer. We're not waiting for like you're drawing money off of that monthly and so that is really important for you to have because there is going to be a time where you're not working and you want this money coming

and you don't want to just depend on social security that's right so it is important to have a nest egg and investment account and chris listen you know this far better than i but i read enough about america'sers and the business itself. It's a very tough business and has a tremendous amount of risk involved. And so you don't want to take the 15%, which is baby step four, and say, well, I'm going to put it into the land. That's a highly speculative business. You would agree with that statement? I would.

Yeah. So let's, real quick, we only got about a minute and a half. I just want to get some quick numbers. What kind of acreage would you like? If you had the money now, what size, how many acres are you looking for? I'd love to have 1,000 acres. Yeah. But I know that's going to take a lifetime of working to get up to that.

Yeah, but what kind of farming do you want to do? Just corn and soybeans. So what's the minimal amount of acreage that you need to be able to test this idea? So testing, I was just going to try to buy 40 acres just to start, and I'd have my full-time job. And then gradually, after I've got the 40 acres paid off, I want to buy that upfront so I don't have to go to a bank. So I like this idea to keep buying more. All right. So now we've got a number in our mind, right? At 7,000 an acre, that's $280,000, right? Yep. Okay. You know what? I challenged the 40 acres. I'd go, you know, listen,

we talk about people testing side hustles all the time on social media, but listen, man, you can still test something with dirt and seeds. So I guess Jade's giving you great financial advice. Hopefully you do exactly what we tell you to do and invest for yourself because I don't want you to sacrifice your long-term investments in a speculative farming business. However, could you save $150,000, $200,000, buy a smaller plot? Let's grow it. Let's test it. We pay cash. No risk.

We got the land that we could resell. I think this is doable. I guess that's the point. I wanted to give you a hug and an encouragement to say, I think you could get in this game for a lot less money than you think and see if it is a long-term play. I would challenge you to think about that in the days ahead. But we're proud of you.

Great job getting debt-free. Way to go. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me. Merry Christmas, America. Thrilled that you were with us.

We're here to help you win in your life, your money, your work, and your relationships. 888-825-5225 is the phone number. Let's go to Megan, who joins us now in Jacksonville. Megan, how can we help? Hi, I'm a brand new follower, and over just this past week, I've listened to the Total Money Makeover audiobook twice. Wow. My husband and I have just begun applying this principles to get out of debt and change our financial future. Cool. And after reducing our emergency fund and liquidating our assets, we'll have about 14,000 to dump into debt,

paying off multiple creditors. So soon it'll be just one creditor aside from the mortgage. So we'll only have one piece of debt. And I would just like advice regarding this particular piece of debt, if it makes sense for our family to pay it off and keep it for the long haul or sell it. What's the piece of debt? Is it a car? Yes, it's a van. It's a 2020 Ford Transit 15 passenger van. Wow. Why such a big van? Well, we are a family of eight. So we have,

my husband and I, we have six sons, ages two up to 11. Bless your heart. You need some rest. Yes. So tell us the details on the van. How much do you owe on it? Yeah, so, I mean, we bought it in March, which it was crazy. The market was insane. Painful time to buy, but we were kind of maxed out in our, the, our prior eight seater van, and it was just on its last leg. So what'd you spend on it? But, um, well that one has,

it was paid off. That one was paid off, but the one that we have now, so the one that's in question, we are balanced right now is $47,663. Okay. 47,663. Okay. And what's it worth if you were to sell it private sale? So I Kelly Blue Booked it and its value is about $56,600. $56,600. Okay. So the question then is, are you able to get your hands hands because what you could do if you wanted to you've still got the 14 000 you could get the difference cleared up and you could sell this thing it's a ten thousand dollar difference sell this thing and then put whatever i mean what what would the next step be do you guys have anything Do you have other vehicles for the family is my question. This is our only vehicle. The only vehicle period? Yes. Okay. So what would it cost to get, you said before you had an eight passenger van, which is great. What would it cost

to get another used eight passenger van? Well, it varies. I mean, there's a lot more options it's obviously a lot a lot cheaper um if the advice was to sell it then that's one thing that i would be asking what should i be looking for i mean should i be looking for something you know trying to go as cheap as we can that you know will be more short term or well you know, just trying to. Here's my answer to that. I think that I do want you out of this vehicle. I think it's more than you need and it's too expensive for you. In order to say what you need and what you can get, can you tell me what your income is? My husband, we make, well, our annual income is $120,000. Okay, $ 120 000 okay 120 so our general rule of thumb is we don't want any more than half of your annual income in vehicles okay so between the two of you

you could really consider this two ways that's 60 000 split between the two of you if this is your only vehicle and you plan on being a one vehicle family there is a world that you could pay this off and just keep this as your vehicle if you think you can pay it off in two years or less that's your bag if you want to do that if you're like jade i want to get out of debt i don't want this thing we bought too much car then there's a world where you say okay as as we're working to pay off debt we know that we're gonna have to fill the gap on this because there's a ten thousand dollar upside down and you're then gonna need some money somewhere to buy an eight passenger van that's used right so you've got some options here and you've got to decide ultimately can you can you kick it and pay this thing off super fast or do we need to really consider some can what you're

looking at vehicles what do you see Here's a question for you. Can you fit eight people? Can you do the six boys in a traditional third-row minivan? We could, yes. I mean, that is what we had before. The question was – and kind of the reason that we also wanted to go up because we weren't sure whether or not we would expand our family anymore in the future. And it was just kind of, well, we'd rather have, you know, at least have the space for it and not have to then at that point be like, okay, well, this is how we're going to have to. But now you're in agreement with Jade and I that, I mean, we probably shouldn't have bought a van for the future.

We should buy a van for the now, yes? The other benefit, like I said, we moved out of the city. We're a little more rural now. And having that extra space for when we do go into town and being able to get groceries and all those things. The question is— So I don't want to try to talk you out of it, so I'll answer Jade's question. I've got right here a 2015 Ford Transit Passenger 150 XL medium roof

with a sliding room passenger side door. I feel like a used car salesman, Jade. But now this is in Murfreesboro. All right, so this is Tennessee. But it's $26,900. It's got 78,000 miles, but it's 26. That's a lot less than the, what, 65? No, 47 is what you owe on the current one. So you guys can definitely find a van that large for half. She she can but she's also got to clear the ten thousand dollar difference no i know i'm letting you help her on that but we can at least get out of that car

payment well i'm glad you found that because now that i'm looking at that i'm like all right that's there she'd have to save up the 26 000 there plus the 10 000 to get to get right so she's already at 30 37 000. That's 10,000 less than where she's at now. I can do it one better. I mean, I was looking at minivans in the 15s and 16s. Here's one in Jacksonville, 2019 Dodge Grand Caravan, 35,000 miles, 19.8. That's not bad. So for the now. That's not bad. Here's where where i'm at and there's not a bad decision here um because your debt right now is minimum you've got the 14 000 you'll knock it out and the only debt left is this right so if i'm in your shoes other than our mortgage but that's another if i

were in your shoes um late we've laid out all the information and now i'm going to tell you what jade warshaw would do if i were in your shoes i would keep this vehicle and pay it off this year in one year because it's your only vehicle it's less than it's less than half of your take-home pay like for the year right and it's your only one i like that i i'm going to keep this car it's good it's serving a purpose it's going to get you towards the future you'll like it and the other options aren't enough of a payoff for in my opinion to go through trouble it's four grand a month to knock it out in a year yeah knock it out in a year four grand a month do you like that yeah yeah I mean not yet uh I was and it's something that you know there's that security I mean it was expensive but I mean we

we got it with only 13,000 miles on it. Listen, you're not going to make me feel good about the fact that you went out and got a car note now. Yeah. But you're in it now. We're learning. Exactly. You're in it now. Pay it off. And make me the promise that next time you guys, when it's time to upgrade, when it's time to get another car, stack up that cash.

Because I don't want you guys in car. I don't want you in car debt ever again. The car note is the difference between the middle class and the wealthy class. that cash because I don't want you guys in car. I don't want you in car debt ever again. The card, the car note is the difference between the middle class and the wealthy class. All right. That's the money right there that people, you know, it's, you need that money. You need to invest it. That's where your kid's college is. It's all wrapped up in that car note. So just you and your husband say, all right, we got, we got one out of it, but we're not borrowing money again on cars. I'm proud of you guys. Yeah, absolutely.

Thank you. You guys are going to win. I'll just knock it out. That's right. Yeah. Look, get Gazelle Intense on knocking out that car payment. And when you guys have singular focus on that, you'll be surprised. All the good stuff that'll start to happen when you think, okay, let's save a buck here.

Let's put it towards the car. Next thing you know, you guys have a paid off van. I put some more money in the bank before I have you know, you guys have a paid-off van. You know. I put some more money in the bank before I have another kid. I just wanted to throw that in there. Listen, Ken, you were a used car salesman over there. Ken's car lot. I like, because people need to know their options. Listen,

you doing that helped us make the right choice for her. There you go. Hey, listen. Money advice, used car advice, whatever you need. we're here for you. This is The Ramsey Show. Welcome back, America. You are listening to The Ramsey Show. I'm Ken Coleman. Jade Warshaw joins me this hour. And it's such a privilege to be a part of this show that helps so many people. And I want to just kind of give you a snapshot of where we are as we wrap up 2023. We have done 242 live shows. We've talked to 3,200 plus callers and we've done 184 debt-free

screams and get this, ready for this? I wish we had a ticker board for this. Totally. Thank you for the drum roll, Jade. $36,059,064. And don't forget the 47 cents. And so what an unbelievable year. And so we keep going on that total, Jade, because in the lobby of Ramsey Solutions, standing on the debt-free stage are Donald and Leticia. Welcome. Hello. How's it going? Hello. And I assume you're here to do your debt-free scream. Is that correct? That's correct. Oh boy. Let's go. Let's hear the story. All right. How much debt did you guys pay off? We paid off $152,000. $152,000. How long did did that take that took us approximately 30 months 30 months and what was your range of income during that time the range of income we started off at about 120 and we ended off at about 165 wow nice what do you guys do for a living i actually have my own uh lawn care landscaping company and uh my wife uh she works at the local hospital um and revenue

integrity excuse me and uh but really she does everything you know she knew like as a photographer she do t-shirts she actually is an author she does it all okay i like that latisha so was that the uh is she responsible for the uh forty five thousand dollar bump or was this a partnership in raising our income? Yes, she actually have a chair rental, a throne chair rental business that she started a couple of years back. Nice. And that's what actually gave us the bump. Did you say a throne chair rental business? Yes. So if I want a queen's chair, I can rent it from you. Absolutely. Come on somebody. Don't get her too excited about this. That's going to show up in the office one day.

Is this for like parties and things? Yes, like weddings, baby showers, birthday parties. No kidding. A lot of pastors use it for their pastor's anniversary. Okay. So it's used for a lot of things, photo shoots. Listen, America, don't tell me you can't make money. This woman is renting a throne, okay?

I know. Wow. That is the American dream right there. I love that. Love it. And you guys are from the New Orleans area, is that right? Oh, yes. Actually from Ponchatoula.

We're like 45 minutes north of New Orleans. Okay, gotcha. All right. Well, fantastic. Okay, so what happened 30 months ago when you guys say, all right, we're going to go on this debt-free journey? And by the way, that's a lot of debt in 30 months. I you guys say all right we're going to go on this debt-free journey and by the way that's a lot of debt in 30 minutes I know it is well to be honest I have heard about Dave um a couple years back and uh we was already kind of like on a journey without following the

Dave Ramsey plan so we would actually get in we'll pay off debt and then we'll get right back in it and we'll just be in this frizzle uh cycle so what happened was uh covid hit yeah so for covid that was uh a blessing and a curse for us so what happened was um i commute back and forth to new orleans every day and uh i heard dave on youtube and uh i was an essential worker of course sure and he was just telling me how crazy I was and how stupid I was you know so um I had to get myself together so I go home and I go to my wife and I say hey listen I have this plan I heard this guy on YouTube she's still shaking her head and I had to get her to buy in and I was so sold in Jade Ken and uh she looked at me she says I'm not with it uh-oh uh-oh Letitia that was tell us more tell

us how did you get into it um you know he'll be like hey let's watch Dave Ramsey I'm like you watch it tell me what he said right like I don't want to watch that and so right you're like wait a minute you want me to watch what now right I was like you get the information and you give me a short script of it and so what he did was he began to like uh because it was covid and it wasn't like we could do anything he worked a lot people still needed their grass cuts so he worked a whole lot so he was able to save about 10 grand wow and he came home i think it was like three or four months he saved 10 grand and so he was like hey pay these credit cards off and i'm like with what and he was like oh i saved the money because i was listening to you know Dave Ramsey oh okay so you know I'm like we don't have like this healthy

uh competition going on and he always say you know I like to spin and so I was like I'm gonna show him and so you know I had my businesses going and I was running specials uh like with my book specials and throne chair rental specials I was running it and so I came home and I was running specials like with my book specials and throne chair rental specials. I was running it and so I came home and I said, hey, guess what? Pay this credit card off.

And so we had a sheet on the wall and we would, you know, we constantly coming home and saying, I paid that one and we scratching it off. So it became a healthy competition.

I love that. And I stopped getting my hair and nails done. I was wearing press-ons. I learned how to do my own hair from YouTube. Not the press-ons. It's a sacrifice. That's a deep, deep sacrifice. I'm learning things right now.

Okay, I got to say this. Donald, you're a genius. Thank you. You need to write a book for husbands. That's what I've been trying to tell you. I actually think you're a genius. I'm like i can't i try to force stuff you just were like all right i'm just gonna save up some money and

surprise her you're a genius my man you should write a book yes all right fans fun fun stuff what was the debt comprised of curious the uh 152 okay so we had a van that we financed that was 12 000 my wife actually had a nissan pet finder that was 14 000 we had 28 000 in credit cards wow um my wife had 38 000 in student loans oh wow and we actually paid off um a home that was 60 000 whoa wait so we have a paid off home in this we have a paid off home in this whoa is it your primary home no you can tell us okay so what happened was in the midst of uh before the uh pandemic happened we were like i say already on a journey to pay off debt so we acquired a mobile home that we say hey we'll make this rental property and in the midst of

renovating i was like why don't we just live here and rent out our house and there's more money we can save interesting and so we we lived in the mobile home and renovated it and um so you know that's what we did we were on our journey they pay rent we made money and we end up selling the home you know because the market is right wow so we sold uh we end up selling the home and made twenty eight thousand dollar in profit off of that okay so now you're still on the airstream or whatever it is you're still on the mobile yes and you own it free and clear yes wow y'all don't have a payment in the world and the greatest blessing of it all as well is because of we live in louisiana where it's a hurricane state they have a program called restore louisiana and so because we're in a mobile home and we did

acquire some damages restore actually um gave us a grant to get a brand new mobile home so we just was blessed with a brand new 2023 mobile home. Congratulations. Congratulations guys. So we are really doing great. Y'all are floating. And I got to point out your nails look fabulous. Thank you. Yeah absolutely. I didn't get these done. All right so we've only got a couple minutes real quick tell people what you believe the key is to getting out of debt um it's discipline it's knowing that you are worth it that you are worth being debt free and not having to struggle and stress about bills the relief it is to be able to travel and take a trip without using a credit card is such an overwhelming feeling like it's just like wow I never believed that

we could really be debt free because you always hear people say you're gonna always have debt but to be able to go through the steps the sacrifice being talked about laughed at like y'all really left y'all house to live in a mobile home it's so rewarding because guess what we could do whatever we want now we're able to give substantially we're able to be a blessing and God is constantly pouring out his blessings to us substantially we're able to be a blessing and God is constantly pouring out his blessings to us because we decided to sacrifice a little so that we could live like no one else I'm ready I'm ready to uh do an altar call and take an offering I mean I'm gonna do it all Leticia that's the final word because that is so powerful. You guys are on your way to being Baby Steps Millionaires.

So we want to bless you with a copy of that book, Dave's latest book, Baby Steps Millionaires, because that's the next chapter in your amazing story from mobile home to millionaires. That's it. That's your slogan. I dig that. And then we're also going to give you a copy of Dave's book, Total Money Makeover, to gift to somebody else because you guys have modeled the way and we know you're going to continue to bless people by modeling the way. Yes, sir.

So thank you guys. Thank you. Okay, you got your son with you, so let's get him up there real quick. Kelshawn. This is Kelshawn. How old is he? 17. 17.

All right, here we go. We've got Donald, Letitia, Kelshawn. They paid off $152,000 in 30 months, making $120,000 to $165,000. Take it away. Let's hear your debt-free scream. Y'all ready? On three. Three, two, one.

We're debt-free! Yes, they are. Fantastic. I love that story. I mean, I got goosebumps. Listen, I'm ready to shout. That's all I'm saying, Ken. All right. Let's go do it. Let's go high five and shout with that fabulous family.

Hey, they did it. You can do it as well. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show, America. I'm Ken Coleman. I'm joined by Jade Warshaw. The number for you to jump in on the conversation is 888-825-5225. Our scripture of the day comes from Luke 2, verses 7, 8, and 9. And she gave birth to her firstborn son, and she wrapped him in clothes and laid him in a manger, because there was no room for them in the inn. And there were shepherds out in the field, keeping watch by night. And an angel of the Lord appeared to them, and the glory of the Lord shone around them.

Our quote today from Calvin Coolidge, a former president, he said, Christmas is not a time nor a season, but a state of mind. To cherish peace and goodwill, to be plenteous in mercy, is to have the real spirit of Christmas. President Calvin Coolidge. A great contribution there. Cool Cal is what they called him, of Christmas. President Calvin Coolidge. That's a great contribution. Cool Cal is what they called him, I believe. You would know. Thank you.

Thank you very much. Colorado Springs, Colorado is where we go. Alex is up. Alex, how can we help? Hello. How are you? I'm doing great, actually. I have some good news, personally.

I recently made a pretty big life change. I moved all the way across the country for a new job. And the income here is significantly better. It's about twice as much as I was making recently. And I'm about to have a bunch of disposable income that I've never had before in my life. And I want to begin building wealth and planning out my future. The only issue is I still have some debt, but I also want to do some investing. So I was just wondering, how would you recommend going about that? Winning. Listen, I'm excited for you. You got double the income.

Thank you. You've got options now. So how much debt do you have laying around? So I have $9,500 in student loans. Okay. And that's it. Oh, that's it? Okay, great.

All right. And what's your income? What's this doubled salary look like? So I actually do two jobs. I do a teaching job on the side. My main job is $97,000. And then with my teaching job, I make between about $5,000 and $10,000. Okay, cool.

And what does that look like monthly? Like what are you bringing home each month? About $8,500. Okay. That's pre-tax. After tax, it's going to be around $6,000. Oh, around $6,000, you said? Mm,500. Okay. That's pre-tax. After tax, it's going to be around $6,000. Oh, around $6,000, you said? Mm-hmm. Okay. So, what would it look like? Can you get this debt, this $9,500, can you have that gone in four months? I could. Okay, great. So,

that's thing one. Do you have any money or savings laying around? Let me ask that first. I do, actually. In my bank account, I have about $8,000. Oh, okay. Well, then we're going to knock this out even sooner. Wow. Okay. So what I'm going to walk you through is our series of baby steps, just in case. I don't know how familiar you are with them. But what we say is first step, you're just keeping $1,000. Keep it aside right quick because we need a cushion. We need a barrier between us and life if an emergency happens. So out of that 8,000 today, I'd earmark 1,000 aside. And then I'd take that 7,000 that's left and I would put it towards the student loan. And if you can scrounge together, I know it's the

end of the month, so this might be in January. If you can scrounge together that other $2,000, knock it out and it's gone. Okay. And then, go ahead, you go ahead. So another thing I was wondering though is that I was hoping to invest in an IRA. I was hoping to begin that.

We're getting to it. Currently I have a 401k going. Currently I have about $15,000. But the IRA, I know that there are annual contribution limits. And I was wondering, is it too late this year to begin that. We're getting to it. I have about 15,000. But the IRA, I know that there are annual contribution limits. And I was wondering, is it too late this year to hit that? No, it's not. So I'm going to get to that. But I want to make sure you understand it within our framework. Okay, because there's there's method to madness. If you everybody wants to build wealth, and everybody wants to do that. But if you don't do it in the right way, you end up taking steps

backwards. And we hate to see that. So it's super duper important that you walk through it with some method, okay? Because if you don't have three to six months saved, what happens is that money that you saved in a 401k or an IRA, that becomes your emergency fund. And then when it rains, you have to pull from it prematurely and you get hit with penalties and fees and it messes up your rhythm of investing and I really don't want that for you. Fair enough? Okay. Yes. Okay. So you've paid off the student loan in January. By February, I want your main focus to not be investing. I want your main focus to be stacking up three to six months of savings and I want that money liquid. I don't want you investing that money.. I don't want you

investing that money. Okay. Because if you were to lose your job, if something were to happen, you fall on hard times, you need that money there because I don't want you going into debt to cover an emergency. Okay. So February starts, you're piling up three to six months of expenses, basic expenses. Okay. This is not full-blown budget. And for anybody listening, three to six months of expenses, that is not every item in your budget. This is what it takes to keep your household running when we say basic expenses. So you're doing that. And then, then and only then are we talking about investing. Now, typically, Alex, we would tell people to pause 401k investing, but you're,

I'm not going to tell you that because you're literally going to pay this off in one month. It's not even worth the trouble. But once you stack up that three to six months, you're investing. All right. 15% of your income. If your 401k has a match, you can start with that. And then after you hit the match match you can go over to a Roth IRA you can max one of those out and if you still have money left of the 15% you can go back to the 401k and keep going until you hit it okay did I did I answer your question or you have more that makes sense yeah but I was just wondering, is it possible still to invest in the 401k or in starting the IRA this year? I haven't actually opened up an account,

but I'm just worried that we're kind of running into the deadline. No, with IRAs, you have until tax filing. So you can invest all the way up until April. I see. Okay. At least last I checked, did that change Ken Coleman? Last I checked. Yes, the wrong guy. I don't check those details much. Yeah, it's not the same as with your 401k. You've got time until taxes. I believe that's true because it's based on the 2023. That's right. So I think that's correct.

So yeah, keep going. I'm right about that. I just wanted to double check it. And Ken is right about that too. But yeah, I love this. I love it. I'm excited for you. You're on your way, young man.

Congratulations. Listen, follow what Jade told you to do. If you do that, you're going to be really wealthy. And just be patient. Just walk the steps out. Start that investing plan now. How old are you? 24. Oh, come on now. That's exciting. Listen, and again, I'm going to say this again. I don't know if you're going to do it or not, but if you really want to do this quickly, pause investing now. So just pause. It's a temporary, just quick pause so you can get that money back in your hands. So you can quickly get the student loan out. So you can quickly save up that three to six months.

And then you can hit a hard 15%. Oh my goodness. it's going to make your mind blown how quickly you recoup whatever little bit you lost off of that small pause. That's exactly right. It's all about momentum, Alex, and everybody else. I mean, that's the magic of the baby steps is it allows you to get emotional momentum, which then leads to financial momentum. And that's what's really great. Okay. So unbelievable here. I wanted to bring back perspective, Jade, for you as we wrap up the show today. 36 million plus of our listeners and viewers paying off debt. It is doable. And I've got to do this because she's my friend, but this is really good. You see that? I've got to tilt it the right way.

Look at that. Money's not a math problem. This is her new book. Comes out when? It's technically out now. Oh, it is. It's on the street. Okay.

It's on the street. So you can get it now, Amazon, wherever books are sold. Yes. If you buy it on RamseySolutions.com, it'll ship immediately. If you go on Amazon, Barnes & Noble, Target, those sorts of things, it will not ship until January 2nd. So keep that in mind. Yeah.

So here's what's great about it. Barely over 40 pages. Includes her amazing story. This is a woman who's walked the walk. She's talked the talk. The real reason you're broken, what to do about it. Money's not a math problem, and it's about behavior. And that's what I love about this title.

And Jade has lived it. She and Sam paid almost half a million dollars off in debt. And as we wrap today's show, I just was thinking the perspective here of all the calls we have had today. Plus, I could say this about every show. It really is about the title of your book. I'm going to give you the final word on that. It is about behavior. yes? It is. Money's not a math problem. At the end of the day, you're not going to accomplish anything if you don't truly believe you can. And I always say, if behavior is the car, belief is in the driver's seat. Belief is what drives our behavior. Whether you believe you can or you can't, you're right.

And if you're not getting where you want to go, it's because you don't believe you can get where you want to go. And I say it all the time. You can tell me you won't do it, but don't tell me you can't. You can do it, but your belief's got to be in the right place. And this book is all about that. Go get it right now. RamseySolutions.com. It's in the store. Be a great gift because it's very affordable. It's the gift that keeps on giving. Famous line from Christmas Vacation. How about that? Hey, big thanks to my colleague, my dear friend, Jade Warshaw, soon-to-be bestselling author, to our fearless leader, old captain, our captain, James Childs, and the amazing crew.

This is The Ramsey Show. Thank you.