Your Debt Should Make You Uncomfortable
The Ramsey Show
Deep Dive
Why shouldn't a college student invest extra money while paying for college?
Investing extra money while paying for college is risky because the investment horizon is short. It's smarter to keep the money liquid in a high-yield savings account for emergencies or future expenses like moving or unexpected costs after graduation.
What should a high-income earner do if they can no longer contribute to their 401k?
A high-income earner who can no longer contribute to their 401k should consider a backdoor Roth IRA and explore index or mutual funds for better returns. They should also consult a financial advisor to explore other investment options.
Why is it considered tacky to have wedding guests pay for their meals?
It's considered tacky to have wedding guests pay for their meals because the wedding budget should be based on what the couple can afford, not on expecting guests to cover costs. The presence of guests is the gift, not their financial contribution.
How should a couple manage their emergency fund during baby step one?
During baby step one, a couple should keep their $1,000 emergency fund in a separate, high-yield savings account, not in their checking account, to avoid accidental spending. The rest of their savings should go toward paying off debt.
What advice is given to a recent college graduate with debt and no job lined up?
A recent college graduate with debt should focus on working as much as possible, especially during seasonal opportunities like the holidays, to pay off debt quickly. They should also consider selling assets like a car if they are upside down on it to reduce debt faster.
Why is it important to have a buffer in your checking account?
Having a buffer in your checking account helps prevent overdrafts and covers unexpected small expenses that may not be budgeted for, ensuring you don't dip into your emergency fund for minor issues.
What should a person do if they inherit hidden financial problems after a spouse's death?
If a person inherits hidden financial problems after a spouse's death, they should seek help from a financial coach to navigate the situation. They should also assess whether keeping or selling assets like a house is the best financial move for their future.
How can a person with a large savings account and debt balance their financial goals?
A person with a large savings account and debt should first pay off all their debt, keeping only $1,000 for an emergency fund. They can then focus on building a fully funded emergency fund and start investing 15% of their income for retirement.
Why is it important for married couples to combine their finances?
Combining finances helps married couples work as a team, reducing financial stress and creating unity. It allows them to focus on shared goals like paying off debt and saving for the future, which strengthens their relationship and financial stability.
What advice is given to someone with an irregular income who wants to save for a house?
Someone with an irregular income should set aside a portion of each paycheck into a high-yield savings account for a house down payment. They should also ensure they have a fully funded emergency fund before focusing on saving for a home.
- Prioritize liquid cash over investing while in college.
- Focus on covering college expenses and building an emergency fund.
- Investing can begin after graduation and settling into a job.
Shownotes Transcript