Dear Dave,
Do you think I should lower the amount Iâm contributing to my 401(k) so I can pay off my house and my truck?
Jamie
Dear Jamie,
If youâre following my plan, the first thing you should do is set aside a beginner emergency fund of $1,000. Thatâs Baby Step 1. Next comes Baby Step 2, which means paying off all your debt except for your house. This would include your car. During this time, you should temporarily stop any kind of investing and retirement contributions.
Once your mortgage is the only debt you have left, itâs on to Baby Step 3. This means you start saving money and growing your beginner emergency fund into a fully-funded emergency fund of three to six months of expenses. When thatâs done, you can attack Baby Step 4âinvesting 15 percent of your pre-tax income for retirement. In your case, that would mean re-starting the contributions to your 401(k).
The rest of the plan goes like this. Baby Step 5 is putting money into your kidsâ college funds, if you have kids, while Baby Step 6 is putting everything you can scrape together towards paying off the house early. After that comes the real fun. Baby Step 7 is the point where you build wealth and give like crazy.
It may take a little time in some cases, but following these steps will lead you to financial peace!
âDave
Dear Dave,
I just accepted my first job in sales. In your mind, what is the key to becoming an excellent salesperson?
Bobbie
Dear Bobbie,
The key to becoming a great salesperson can be summed up in one simple wordâserving. Iâm not talking about being subservient. Iâm talking about always giving 110 percent towards ensuring customers and potential customers are served well. Itâs all about being proactive.
Serving means you believe in what you represent, and youâre excited about what you have to offer. It means youâre determined to give people a great experience. If an issue happens to arise, youâll take care of it quickly and completely. Youâll do this in a way that will make them forget it ever happened.
Really, serving is an attitude. You can pressure people if you want, but thatâs going to lead to a dull and frustrating life of one-shot deals. But if you serve people well, youâll have clients for life and theyâll send their friends and associates your way.
Make helping people your first order of business, Bobbie. If you do that, youâll never have to worry about money!
âDave
* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.
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