Jade Warshaw is a Ramsey personality who is known for paying off $460,000 in debt. She joins Dave Ramsey on his “Ramsey Show” regularly and has her own social media accounts, where she shares money advice.
In a recent TikTok video, Warshaw explained how people can know whether they’re ready to make a big purchase. She said that many people in the Ramsey community find it difficult to make big purchases, especially after reaching big financial milestones, like paying off debt.
In fact, the Federal Reserve published a report that found that 65% of adults said increased prices on daily items made their financial situation worse. Therefore, it’s no surprise that some people, even if they’re doing well financially, feel reservations about making big purchases.
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Warshaw shared what she called the five main pillars to have in place before making a purchase. If people meet all these criteria, she said, chances are they can afford to buy the couch they want, go on a vacation or complete a home renovation. Here’s how to decide whether you’re ready to make a big purchase.
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You Live on a Budget
An October 2024 report from Bank of America indicated that nearly half of Americans are living paycheck to paycheck. Creating a budget can help people track their finances and plan for the future.
Warshaw explained that if people live on a budget and have awareness of where their money goes, that’s one part of knowing whether or not they can make a big purchase.
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You Are Out of Debt
The average debt per adult in the U.S. is $66.772, per Ramsey Solutions. To help people get out of debt, increase wealth and live generously, the Ramsey Solutions team teaches a method called the 7 Baby Steps.
And Warshaw includes paying off debt in her criteria. The second pillar to know you can make a big purchase, according to Warshaw, is being out of debt and staying out of debt.
You Have Proper Insurance
Having a big emergency, whether it’s a health emergency, a natural disaster or a car accident, can dramatically derail people’s finances. Warshaw explained that having proper insurance coverage in place and checking it regularly is something everyone should do before making a big purchase.
You Are Saving for the Future
According to MarketWatch, Americans are saving less money than they used to. It found that in January 2025, they saved just 4.6% of their disposable income — a decrease from 5.3% 10 years ago. However, saving is an important part of any financial plan.
Warshaw explained that another habit people should have in place before making a big purchase is regularly saving for the future. Ideally, people should make saving for their future a regular part of their monthly budget before purchasing items that are wants.
You Prioritize Generosity
Finally, Warshaw said the last piece to have in place before buying something is to prioritize generosity first.
If someone is out of debt, sticks to a budget, has proper insurance, regularly saves for the future and still shows generosity to others, then everything is in place for that person to go ahead and make that big purchase.
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Sources
Jade Warshaw, TikTok
Federal Reserve, “Economic Well-Being of U.S. Households in 2023.”
Bank of America, “Paycheck to paycheck: what, who, where, why?“
Ramsey Solutions, “Average American Debt.”
MarketWatch, “How Much Is the Average American Saving?“
This article originally appeared on GOBankingRates.com: 5 Ways To Know If You Can Afford a Major Purchase, According to Jade Warshaw
