When Is It Time To Start Making More Mature Money Decisions? (Hour 1)
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What is the main topic discussed in this episode?
Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. It's a free call anywhere in the country at 888-825-5225. And I am Rachel Cruz. Hosting this hour next to me is George Camel. George, it's been a good hour.
It is. I hope. I hope so, too.
How much cash should you have accessible for emergencies?
You're saying a lot there. Very aspirational.
No, it is. I'm going to say it as a fact. So, yeah, we're here to talk about anything about your life, whether it's your relationships, your mental health, your money. So just give us a call. So we're going to start out with Bo in Dallas, Texas. Hey, Bo, welcome to the show.
I appreciate it. Thanks for having me on. Absolutely.
How can we help?
So I'm 23. I've been working a job for about 10 months out of college, make good money, make about $78,000 a year. In a couple months, I should be getting a raise anywhere from $90,000 to $100,000. I've always been pretty good saving my money. For about the past five years, I've got about $20,000 in a Fidelity account. $15,000 in Bitcoin, which I know you guys are going to, you know, give me the laugh face about, maybe not. And then about $5,000 in a company 401k with a match. But my question is, I only have about $3,000 in my checking account. And in the inflationary environment we're in, you know, I'm losing my purchasing power every day. Just keeping the money in my checking account. And, you know, I'm 23, single, don't really think I need to save up for a house in this crazy housing market.
Should I be concerned about having this low amount of cash in my checking account? You know, if an emergency comes up, I could just, you know, sell some of my stock or some of my Bitcoin. So that's kind of my question. Should I, you know, keep my cash balance low and keep the aggressive investing up or maybe, you know, try and beef up that checking account?
Yeah, I mean, it's a great question. You know, I always answer these questions that if I woke up in your shoes. And for me, having liquid cash just to get where there's no strings attached, there's no hoops I have to jump through, hurdles I have to get over, that I can just literally get it right now if I needed it, gives me a sense of peace. And if there's something that happens that you have to have cash, having something just available that's not tied up in investments or even Bitcoin, right? I really do recommend. So that's kind of our three to six months worth of expenses. When we talk about baby step three, do you have any debt at all? Are you completely debt free?
No, I'm debt free. I was lucky enough. I didn't have to pay for college. That's awesome. You know, my only big expense. So yeah, I'm debt free.
Very cool. Well, you're doing an incredible job, Bo. I mean, the questions you're asking at 23 is, it's impressive. Sharp guy. So if I were you, yeah, I would, I would have some money and you can even start saving for it now if you want, you know, and just saying, hey, I'm on baby step three and then start saving for that fully funded emergency fund. You could do that because if you, if you love this other stuff that you have your money in, but I would probably just cash out one of those investments, probably the Bitcoin. I know you're not shocked that I want to say that.
It's not doing great anyways, Beau, let's be honest. Yeah, thank you. But here's what I'm thinking. Why can't you do both? Why not have a fully funded emergency fund and be investing? So I think right now your next goal should be to beef up your savings, leave that money in checking and create a three to six months expenses savings account. And then you can begin investing 15%. Beyond that, start saving up for a house.
When should you start making more responsible money decisions?
Is that your next goal?
Yeah, I think eventually that's the route I want to go to. My like my one thing with that is I know, you know, investing at a young age is so much more important than investing later on. And with, you know, the market taking such a big hit right now, I think, you know, it's just such a great opportunity to keep, you know, like really aggressively investing at this age.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:29–0:53
2
How much cash should you have accessible for emergencies?
0:53–3:51
3
When should you start making more responsible money decisions?
3:51–7:06
4
Is it wise to buy a condo while still in debt?
7:06–10:29
5
What steps can you take to invest after retirement?
10:29–13:39
6
How can you balance aggressive investing with savings?
13:39–16:18
7
What are the risks of keeping low cash reserves?
16:18–19:15
8
How do you prioritize financial goals when planning for the future?
19:15–41:57