Use This Paycheck Routine EVERY Time You Get Paid

[@humphrey]

Thanks for watching!! Check out my free Discord Community where you can ask Personal Finance / Investing Questions: discord.gg/humphrey

[@koforiatta]

@humphrey excellent video: What do you use to automate your account?

[@gregbaxter6162]

Haven’t you already done this video?

[@sirheisenberg4459]

Diversification is the secret to optimal performance. This is why I have my interests set on market sectors based on performance and projected growth, such as stock, EV sector, renewable energy, Tech, and Health. Keep investing regularly and you'll be blown away how much it can change in a few short years. Here's to $1 million and to FIRE

[@type-r3x]

Dealing across multiple asset classes can reduce risk more effectively than putting all of your money into one. If you don't understand finances properly, see a financial consultant.

[@firefighter-i6q]

True. My portfolio was diversified across several markets with the help of a financial planner, and were able to achieve over a million in net profit among high dividend yield equities, ETFs, and bonds. It is vital that you have a variety of exposure, including in firms that are currently generating cash flows.

[@belobelonce35]

Could you provide guidance on how to reach out to this particular coach through their service? It seems like you might have the answer that others don’t.

[@firefighter-i6q]

MARY EBI AHEARN is her name. She is regarded as a genius in her area and works for FIRST HEARTLAND CAPITAL, INC. She’s quite known in her field, look-her up.

[@NorthCarolinaForward]

I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.

[@i.m.7777]

The snowball method is what worked for me. Each time I knocked out a debt, it fired me up to continue attacking the next one with a vengeance. That was seven years ago and the peace of mind that comes from being debt free is priceless--will never go into debt again!

[@paintingmonkey]

Same - I had some debt I felt really *guilty* about, too (small, but to family), and clearing that early on came with a huge lifting of emotional weight that just made it easier to think practically about the rest of the debt. There was no interest, so it would have been last with the avalanche approach, but it felt amazing to pay it off.

[@financialeducation4433]

Ditto. 7 years ago was -15k net worth. Today the Fidelity account cracked 75k.

[@daniellabrada654]

But don't some say that leveraging debt is good? I'm assuming they mean in an intentional manner.

[@SteveYoung49]

There's a mental mindset shift that needs to happen as well. People should treat investments, savings, etc. as "Costs" that need to get paid, so once the money is gone and moved... it's gone. You shouldn't consider that money still there and something you can touch (unless it's a true emergency). So many times I've seen people touch their savings and investments to buy a new computer or new car that they didn't truly need.

[@humphrey]

thanks Steve!!!

[@luke8173]

Yes, former banker here. People treat their Roths like a glorified savings account.

[@Courtney-Alice-Gargani]

I think people can figure out what to do with their money but don’t have the dedication and discipline to manage it.

[@dt5622]

For sure, by now, these kinds of content are just very repetitive already. It really comes down to discipline

[@Sakurasan2023]

I think this can be helpful for people. Not everyone knows this. The education on finance is very bad in the American school system overall. It doesn't help that it is harder for people to pass down money wisdom if they don't know how to. While I am fortunate to have parents who are good teachers on this, I also learned a lot on KZbin on budgeting

[@suwats7555]

Discipline is a must but most people have too many excuses to not to

[@DefenestrateYourself]

@@suwats7555 having a good upbringing, home life, and genetics accounts for 99% of this

[@seanstapelfeld6448]

Totally agree

[@ZackSeifMusic]

Financial management is such a mental game. After watching a few channels and reading a few books it totally changed my perspective over just a year or two.

[@aju7855]

Thanks to your channel I feel like I’m way ahead of other people my age (22 going on 23). I recently opened a Roth IRA and HYSA. I also set up automatic transfers to each of those as well as my student loan debt. Thanks, Humphrey! 🙏🏽

[@johnnyg7899]

Many people have done the right thing when young like you. Problem is that life takes unexpected turns later in life which makes you tap into what you have accumulated. If you have the discipline to avoid things like impressing others with a new car, a nice house, a relationship, etc. then maybe you might become wealthy. Never default on your student loans. Too many Ph.D.s I have know are in high debt while trying to impress others about their education.

[@Voop12345]

Your channel is so valuable. I feel bad for watching all of this content for free. I literally have my pen and paper and I’m making so many notes! I have so many plans and ideas now, already paid off 2 loans , 3 credit cards and now will be paying off my last loan and my other 2 credit cards. I’m so happy to be here. Thank you Humphrey! I really appreciate you man!

[@jbobby1841]

Me: Sounds great. Gonna get back on track Next Payday: * completely ignores advice *

[@tallylight7952]

Actually, I implemented both methods in the beginning I needed the psychological motivation to attack my debts head-on. However, after paying off the smaller amounts I switched to the avalanche method because I was frustrated with the amount of interest that I was paying in comparison to how much money was being actually applied to the debt. I think each person has to come to terms with what works best for them and their situation.

[@laserwizard1]

I pay every bill the day I get paid. I set aside a set amount into savings. I make quadruple the minimum amount of my credit card bill PLUS the interest I paid that month. By September next year I will be debt free. Just paid off one card. Paid off a car a year early in January. I even set a budget for christmas gifts that will be paid with cash only. It is sickening to see how much interest one pays each month on a stinkin credit card!

[@sureenddra]

Been waiting for this !! Thanks Humphrey

[@humphrey]

Hope you enjoy it - you're welcome!

[@NoyPi6step]

Perfect timing, thank you sir!

[@ellalamorena]

For us 9-5ers you can also just direct deposit whatever you plan on saving to your savings & investment account(s) (HYSA, Roth, etc.) instead of having everything go to your checking and then automatically transferring afterwards. It just saves a step. For me, it helps that the cash is out of sight & out of mind from my paycheck, so I only touch what goes into my checking account.

[@justinlowe337]

I do this too. I figured it was easier to take it straight from the check instead of me managing the transwer. Out of sight, out of mind.

[@mannya_realtor]

Can you do this video again for independent contractors and single member business owners?

[@Jeus-C]

I do avalanche. I love seeing numbers going down and interest getting smaller. Feel accomplished afterwards

[@bryson8918]

Both Paychecks Pension contributions and governmental 457b = 1,406 pre tax per month. 1st paycheck 500 to taxable brokerage - 80/20 VIT/VXUS 2nd paycheck Max roth contribution 400-500 of my leftover cash goes into my HYSA, leaving the leftover cash for needs/wants. Roughly 30k invested and 5k deposited in a HYSA every year.

[@connorholland3752]

Happy to be an internet friend, thank you financial guru.

[@bvoyelr]

PSA: CDs in some banks allow you to cancel the CD relatively quickly (within a week) without risking principal. You just give up up to 90 days worth of dividends. So read your bank's CD contracts. If they do allow you to cancel it, then by all means, use the CD. The whole *point* of emergency funds is that we don't really intend to need to dip into them unless the unexpected occurs, so as long as the principle isn't at risk and we can access it within 2-3 weeks (realistically, within a month and a half -- before your credit card starts bearing interest), then CD's are perfectly safe.

[@mjrvi9866]

Yeah but you lose money. The time that that money spent in the CD could have been spent in a hysa and getting basically the same apy

[@MichaelCarrPilot]

I really dig your new visuals, especially the emoji type ones. They’re super easy to look at (other than just text on screen) and easy to understand. Great editor/editing!! I wish there was an in between the avalanche and snowball. The highest interest rate isn’t necessarily accruing the most interest PER MONTH. Edit: also, you can certainly hold your own for financial advice and don’t need Jimmy Kimmel or whatever the co-hosts name is for DR.

[@humphrey]

Glad you like them!

[@username00009]

You can use that hybrid method if it works for you.

[@stevenciobanita9945]

Hey @humphrey, great content may you include some tips for the French part? Thanks

[@henokfg]

I’ve seen this type of video made 10 different ways and this is now my favorite.

[@humphrey]

Lets go!

[@keaten52]

I feel like everyone always leaves out the concept of motivation when discussing avalanche vs. snowball. Everyone and their mother already knows that higher interest = bad, but the snowball method helps motivate you to get out of debt quicker because you can actually visualize progress and complete milestones. The best method, though, is a combination of both methods - especially if high interest debts have lower balances.

[@marklechadores5574]

I'd prefer the snowball method since paying off the smallest debts first does create confidence and momentum, as well as endorphins and serotonin, which compounds into more confidence allowing the individual to tackle more debts. This is similar to sports such as MMA or basketball(your kobe shot 😅), and the points do add up eventually for the victory.

[@motoryzen]

Exactly staying in debt is a mental problem a lack of discipline and thus it's not a math problem it is a behavior problem if you attack the problem at the source you will destroy it and have a better chance of it staying gone

[@djford2724]

I like a combo of snowball and avalanche…it insures the # of debt accounts decreases but also satisfies my need to avoid paying a lot of interest…also balance transfers are a life saver!

[@Exi01]

Thanks, been meaning to ease up pension contributions to build up an emergency fund for a while

[@David-uh8bz]

Thanks for the Canadian consideration!!

[@humphrey]

Our pleasure!!

[@nickn9316]

got married recently and paid off my wife's remaining car loan. It docked her credit nearly 50 points. apparently paying off debts in total can have a negative effect on your credit score. pffff so wild

[@justinlowe337]

Same happened to me pre-covid. Credit score tanked and then it rebounded a few months later but then it tanked again by 30 points or so and hasn't really risen since. It just fluctuates up and down.

[@austintehguy]

Yup; if it was one of her oldest or largest debts it probably accounted for a large portion of her credit history. This is why it's usually worth it to open a beginner credit card that you never close, throw a recurring bill on it, and set up autopay to build your score up over the years.

[@russcargill8498]

Super helpful video and I totally agree with everything you said. Currently using similar strategies and I’m happy to hear I’m on the right track! Love your content always

[@humphrey]

Glad it was helpful!

[@ethyrice]

Now I won't need to eat ice soup 😂

[@devlynnmortesse6609]

I prefer the avalanche method for me, but I also focus on seeing the balance and the monthly interest go down. Seeing the companies make less money on me every month keeps me as motivated as seeing the balance decrease.

[@starfalsh]

CA tax rates are higher than what you mentioned. Assuming no dependents. Just speaking from personal/anecdotal exp. I make more than "Kelly" but net is less

[@JakeBluh]

You are awesome:) thankyou for putting all this solid information in a good understanding point.

[@cosmicentity1520]

Love your content❤

[@cybernoid001]

as for avalanche vs snowball, a lot of people can't wrap their head around the numbers. So unless you had a month to month spreadsheet showing all the savings by the end of the payoff they just can't conceptualize it. Where its easy to see progress in the Snowball. And it seems that people that struggle with their finances that would need these methods, often they are living paycheck to paycheck and doing the snowball method to knock out a smaller debt, will at the very least make it easier to make the payments on the other debts and not get penalized.

[@milleand0000]

Hey Humphrey. So my employer offers a SIMPLE IRA. Do you know if this is subject to the same $7k contribution limit as a ROTH?

[@caryishnagardner9429]

I love the new graphics Humphreys. your videos are easy to understand and entertaining . I am 53 and retired at 50.

[@domonickbaker-licensedreal4390]

What are your thoughts on holding reits in Roth IRA? I heard that if you drip the dividends from the reits you can collect them there tax free.. is this true?

[@jackreign67]

Thank you Humphreys for always making personal finance entertaining and simple. I learned so much from you and always look forward to your videos. Thank you

[@yoosyeni]

I like to think that alternating between snowball and avalanche is most comfortable. First smallest debt, then the one with biggest interest, then smallest again, etc. this way you see progress and do a wise thing with interest

[@Krueger444]

I'm not saying that there's a right way to do debt, but if there's a significant difference between the snowball and avalanche methods, something's gone very wrong. The interest rate you're paying should generally be inversely proportional to the amount you're borrowing, so your highest interest rates should only ever be on the smallest balances.

[@JesusOrtiz-kn1mp]

What is your outlook on whole life insurance policy ?

[@ChristopherR1981]

Automating your finances takes the emotions out of it, which is a good thing.

[@BardWannabe]

Humphrey, when I was younger I thought like you that I would do individual stocks in my Roth with the hope of out performing the market, but I’m over 50 now and am really regretting that I didn’t just mimic the S&P in that account.

[@GentleWhispersHaven]

I live not in the US, no Roth ira. Is there a similar thing in Europe?

[@ludovicusclericus]

$1800 rent in Los Angeles, is a studio somewhere in south central.

[@santiagokiwi3187]

If you don't have "crippling debt" the snowball method for clearing debt is the best way in my opinion. As you said, finances are a behavioural issue and when you clear a debt, it gives you motivation to keep going and clear the next one. You will end up paying a little more overall but the avalanche method will see more failure rate. When trying to tackle the biggest debt earning the most interest first, it can be disheartening because it takes a while and sometime you feel you're not getting anywhere. At least with the snowball you get that satisfaction of achieving a goal quicker which motivates you to tackle the next debt.

[@TheFourthWinchester]

I always recommend to pay off the high interest loans first. Its a huge money saver.

[@thisfoo8509]

What would you guys recommend? im starting community college I got no debt got a part time job that pays me at the end of every month im setting up my emergency fund and opened a roth ira any other tips (Im 19 years old btw)

[@devinthunderstrike]

I work for a city government. what can I do about retirement. The city doesn't match.

[@robertbenevento5768]

Hey Humphrey, long time viewer who just subscribed! You mentioned CD's not being a liquid asset. Different banks may have unique terms on their CD accounts however in my experience you can readily access your cash in a CD for a minimal penalty on interest earned. What makes you consider the CD a non-liquid asset?

[@ariealfa4382]

Could you have both a Roth and traditional? What about a deferred 457

[@ancientmeww]

Notifications of a new Humphrey video brings a smile to my face 😁

[@josephduenas4718]

your friend paying under 2k for rent in LA is probably the biggest plot twist ive ever seen 😂😂 great video! 🤙🏽🍻

[@Dusballin]

Dude, what an awesome video!

[@johnharwinmamuyac640]

Hey Humphrey, what do you think about rules about saving, for example the 75 10 15? I'm a new sub, congrats and more power to you and the channel.

[@missycheng1371]

I have Roth IRA and sold indexed funds that I held for more than 2 years to buy individual stocks in my ROTH IRA, would I pay taxes on the gains I have in my indexed funds that I sold? thanks

[@BaldytheBear]

I have used the snowball method before. And I absolutely think it’s the best when it comes to money and psychology. However, I got out of the military and went to school. I had to get student loans because nursing schools are very few and competitive here where I live. I got into an expensive school and even got 26k in scholarships but it still wasn’t enough. Now that I have a car loan and student loans and that’s it. My car loan is expensive and has a high apr. So in this case I’m choosing the avalanche method.

[@akshaygoyal8193]

Thanks this was a great video, i generally use an excel sheet which i created to suite my needs to track my cashflows. And that way really gives a good picture of my accounts health.

[@JayFingers]

Your friend Kelly got a great deal on her rent! I also live in LA and my rent is a couple hundred dollars more - and based on where I am, that’s still a bargain! 😅 Also, with 401(k)s, an option for emergency funds, if you really need the money, is to take out a loan against it. It’s not ideal, but at least you’re borrowing from yourself and not some bank.

[@daniellabrada654]

Did the math, and as a 24 yr old living with his parents while maintaining a decent job, only 19% of my income covers all my "neccessities." Any advice on how much I should save or allocate somewhere else? (I'm not the most educated when it comes to investing in stocks.)

[@CODOJOWI]

Im pretty sure in canada its better to use a TFSA. Unkess you make a crazy amount of money, then use the rrsp

[@JS-zi5hg]

here in Chile, my basic necessities cost me about 70% of my incomes. It is freaking high to live here even with a good salary, and if I hadn't be living with my boyfriend I should come back to my parents house

[@santiagokiwi3187]

Automation is a bit difficult where I live because bills come out as direct debits. That means that the money coming out of my account every month is unpredictable because it depends what the cost of my monthly services will be due to varying usage. I guess everything in the US is post-pay and you can use credit cards but due to finance laws where I live, generally we can't pay for utility or mortgage bills with credit cards. They get directly taken from our bank accounts. It's to encourage responsible spending and so that the necessities you need can be paid for with "cash" over credit.

[@xImbaLANCEx]

Hello. Roth IRA question. If contribution limit is 7000 in 2024.. can I contribute more than that, let’s say 15,000 in total, then before tax year ends, withdraw the 8k contribution without penalties? Does that affect anything at all in my tax filing?

[@ryanatkinson9622]

I can’t stand the highest interest rate first method. I like the highest payment method. 18% of 3k on CC1 is going to be more than 24% of 250.l on buy now pay later. The highest interest can just keep you in debt when those numbers are higher and you are paying off a simple loan but could have paid off a crippling one.

[@amk_arun]

Thank you @humphrey for your informative videos. Would like to see one on MAGI (in the context of Roth IRA). Please try to do.

[@tmdrake]

Zero to hero...worked for me.

[@Keellie]

Just childcare and rent is 53% of my income. Total family income a month is about 7500 (after taxes). Rent 2000 (this low for my area). Childcare $1900. This is the only childcare option near me. Now other necessities including groceries, gas, internet, electricity, phone bill, water, insurance, transportation.

[@WICKEDfsho44]

Glad ion got kids or a family im 20 but dang im ahead of a lot of u people cause of y’all’s life choices

[@ajapplesauce]

Do employers also match contributions to Roth IRA's that are done through companies, like Fidelity, or so those funds need to be transferred over? Pardon my current lack of understanding of this topic, I'm really eager to learn how to continuously build my family's wealth.

[@fionae7715]

Why would you pay off high interest debt after investing in retirement accounts, especially if the interest rate on the debt is higher than 8%?

[@kitkatjp4724]

Is it really better to contribute to index funds by taxable investment accounts rather tham roth IRA?

[@trickyplays240]

Just what I needed, subbing

[@henryh4468]

Nice vid! Do you have a video for retirement info for ppl who dont qualify for Roth IRA?

[@marinamorales39]

What category do you put insurance?

[@lesles4268]

Hi Humphrey! What if for Step 4 I have a Roth 401K account at work (Post-Tax Salary) and choose to do a 10% contribution, should I do a Roth IRA on top of it as Step 6? Or is Step 6 only for those who are only offered a Traditional 401K (Pre-Tax Salary)?

[@c.l.b1667]

My situation cant even handle snowball or avalanche method.😅 I am paying student loan every month about $56. It is interest free. Then I have to pay off a backlog for my land 800 until June. To pay off faster i will try to pay the amount of $800 until December. I am not making enough so i have a side hustle that also dont pay enough...but better then nothing at all. I make is between $200-$300 from side hustle. It all depends on hours i work.. I am hoping to get another job with more pay so I can become financially çomfortable. Right now my budget is very tight. I have to persevere and have a lot of patience. I have my normal rent to pay. Internet, groceries ofcource tithe is a must. It is frustrating but I know God will help me further.

[@blueupgreendown6402]

Her baseline cost is probably way more than 60% even with the side hustle, when you include gas, (especially with la traffic) car insurance, health insurance, utilities, and car licensing

[@tressalewis7004]

Great information and I love the graphics❤

[@noahkoppes6707]

Your base line is missing health insurance. Pretty big expense that is missing in this breakdown

[@madelaine3803]

Debt free and not getting caught in credit card ,for rewards cards are only good for those who spend a lot and pay the full amount rather than monthly

[@chucalissa9231]

40k a year what to do with that pay check! Rent close to 2,000..and car payment is up there too

[@Nickydlll]

What website did you use to calculate her taxes?

[@rainetravels1410]

Automatic pays paid by your banks bill pay scheduled to pay day before it's due

[@terumiw1878]

Do you review your automations periodically? Or the goals? I was thinking about setting up a quarterly reminder to go through my accounts and my spending. Would love to see a video on that.

[@Afashi-vo4vz]

In a country that doesn’t allow interest, how would your plan work?

[@patrickjorgenson5820]

thoughts on Roth 401K? would you recommend over Roth IRA since you get the company match?

[@itspronouncedjello]

I would love to see a video on the steps you would recommend one take if they’re already in a deep financial hole and most of their income is spent on paying off what feels like never ending debt. It’s at a point where I’m literally only spending on necessities and debt, I can’t see a light at the end of the tunnel, and I just want to give up. My hobbies are tv and video games because I cant afford to go out and spend money on anything else.

[@carrcovers3775]

I just started this year. Its april and i knocked out 2 accounts. (Total 3,000$) 4 more to go (9,000$) i swear i wake up every morning ready to knock the next one out…

[@exnecross3141]

I end the day with close to 0 in the bank. Every single dollar is put to work. Helps cut down on wasteful spending too.

[@TheSecondAnon]

Thank you for this wonderful video!

[@humphrey]

Glad you enjoyed it!

[@GrowingThroughItAll]

Love your content! Have you covered the topic of late starters yet?

[@sergioramirez1693]

I get paid biweekly 😢 and right now i gotta buy some things for a family party in December and that’s takin away half of my savings 😂 what do i do

[@natedogg8822]

These videos really help. Thank you👍🏾👏🏾💯

[@humphrey]

Glad to hear it!!

[@majormushu]

Im using sort of a combo method for getting out of debt. Im currently paying down the highest interest rate debt because its only 3k, then im going to the smallest debt because its the one i see the most often, then back to avalanche for the rest of the debts because they are all large anyway so snowball doesnt matter.

[@Courtney-Alice-Gargani]

❤ this video. Very helpful.

[@humphrey]

Glad it was helpful!

[@Yugiboii]

On my budget list I have investments and savings above fixed costs and discretionary spending so each time I get a raise I go down the list and increase investment/savings first. By the time I reach discretionary spending I don’t have much left lol

[@jeromea257]

Awesome Video Humphrey!❤

[@hersdera]

We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2024, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.

[@Michaelparker12]

Keeping some gold is usually a wise decision. You would be better off keeping away from equities for a bit or, even better, seeking advice from an expert given the current market conditions and everything that is at risk with the current economy.

[@SandraDave.]

Could you possibly recommend a CFA you've consulted with?

[@URGOVTNAME]

Could you make a video going over information on a roth 401k?

[@austinplace8440]

When offered a Roth 401k with the company matching in Roth would you take that or use the traditional 401k? current income is 140k, and both would be maxed out.