The best thing I ever did to get out of the middle class rat race was when the first car I ever bought was paid off, I kept making myself those car payments and didn't let life creep occurr. I then drove that car for 15 years, and when I needed a new car again, I was able to pay cash for it. I'm still driving that car 15 years later, with no signs of needing a new one any time soon. This has allowed me to pay off my home and invest over all these years, and have become a millionaire over the last 2 decades.
Very cool way to end the call with psychological advice from Dave about the behavior for the budget to become a habit takes 90 days. I needed that reminder.
Regarding the callers question about a "buffer"; I had the same concern when I started the baby steps, so what we do is make sure that our main checking account has the exact amount that we plan to spend that month on the 1st of the month. Each paycheck I receive during the current month is for Next month's expenses. That way we are always a month ahead instead of being paycheck to paycheck. We also have a separate checking account for our sinking funds for annual or quarterly costs like insurance, school supplies, etc.
After you get your $1000 emergency fund, Dave does recommend building a 6 month cash reserve, doesn't he? I have mine, but I thought it was on his recommendation...
Bt the show encourages you to become a home owner first and then pay off the mortgage. It’s not rlly encouraged to save for 10 years and pay cash as Dave said
@@Shortballa11 You cannot save enough in 10 years to buy a house. A $300,000 house would require you to save $30,000 a year. But in 10 years the same house will cost $400,000.
Proverbs 22:7 isn’t a Biblical law, like all the Proverbs. It’s advice that will make your life more fulfilled and God-centric. It doesn’t say borrowing is a sin, but it is saying there are ramifications to borrowing.
@@insideoutsideupsidedown2218 doesn’t make it a law. Just like proverbs 15:1 is literally advice on how to turn away wrath. Not a law but you probably should follow it if you want less stress
2 Timothy 3:16 "All scripture is given by inspiration of God, and is profitable for doctrine, for reproof, for correction, for instruction in righteousness:"
I live in the country too, a car is absolutely necessary. But nobody needs a $1,000 a month truck payment. You can buy a $1,000 car, then save up some money, buy a $3k car, work your way up to a $10k car, etc.
@lukeforbes2008 $1k cars do exist. They aren't pretty, but my son just bought a 1998 Cavalier with 150k miles on it for $750. It's not perfect, but it runs well. We threw some cheap tires on it and the total was less than $1k.
a mortgage is the best of a bad situation, and Dave isn't even a hypocrite on this. if you have the money to buy outright he recommends it. This is consistent with his own life.
I've been making car payments for the last twenty-eight years. But I don't make them to the bank. I make them to myself. I pay cash for every car I've ever owned because instead of paying a bank (with interest), I put it in a sinking fund. Cars are subject to the second law of thermodynamics- they are moving from order to disorder; they are breaking down and don't last forever, so make payments to yourself, pay cash, and NEVER PAY INTEREST.
@@BREEZYM6015 The last two cars have been a 2012 Nissan Maxima and a 2016 Maxima, and I paid $10k and $14k respectively. I save $500/month in a car fund and I drive my cars until I donate them, usually around 200k miles. I keep my cars for an average of eight years.
@dkibler1974 25k miles per yr is a bit over the std annual, so you must commute alot. Smart that you don't have a truck or SUV, so you save on gas. Based on your annual mileage, there is no point buying new as you are going to destroy and throw your money, so you buy used, save gas and put that on for the next car.
Unfortunately, I'm a high school drop out and not a student of physics. Despite this compromise, I have been able to deduce several things pertaining to cars: When a car is operating it is subject to all of Isaac Newtons principles pertaining to motion and energy. A financed car, however, is subject to not just the same forces that an operating vehicle is, but is subject to forces above and beyond those that are expected by the operator. I call the phenomenon cash entropy.
A house will make you money in the long run if you take good care of it. If you borrow money for pretty much anything else it would depreciate in value.
The value of a house is not in its ability to make you money nor serve as a tool to acquire "cheap" finance. That is a very recently adopted economic concept. The value of a house is much more easily defined, especially if you've lived without one.
going into debt to purchase a profitable business or education in a STEM field will bring you more ROI than a house ever will but Dave is only okay with mortgage debt
They still haven't changed this? Imagine your estimated debt payoff date is 2 years aways wtf u going to do with 1k? That's like not even a months worth of groceries these days wtf..
@@JohnLopez-gt6og The $1000 is solely to prove to non-savers that they CAN in fact save money. It's called a "baby step." You set a small goal in order to get started towards larger goals. If you think it's not enough does that mean you already have MORE saved? Or does it mean you're not even going to try to save $1000 because it's a pointless amount?
Not really. It is less about planning and more about behavior. Maybe at first it's about planning but as your behavior changes it requires less planning. I mean do you plan to breathe or do you just breathe. When your behavior changes for the better, you won't need as much thought and planning!
@@veramae4098yeah if you truly think that part of your rent doesn't go towards repairing anything involving the place you live in, you are severely mistaken. Renters are going to account for the possibility of repairs every single month in a dwelling you live in
@@veramae4098 Lol how naive. You're right, landlords take care of that out of the kindness of their hearts. It is why rent is NEVER more than the mortgage.
@motoryzen thats funny. as a renter i don't recall having to take out an additional $3000 for a water heater replacement, or $10k for a new roof. my rent doesn't go up anywhere near that much. also i don't need to buy a mower, clean gutters, install fencing, worry about pests, shovel snow before i get a ticket, etc
Pastor was right about the buffer. If you're dirt poor, that buffer keeps your account from overdrafting while you're paying your debts. I'll try that.
And the worse you are at budgeting the more the things that should have been predicted and put into the budget are instead taking chunks out of your buffer, means you'll need a bigger buffer, means less of your budget goes to paying debts, means you'll be in debt longer, means you'll pay more total in interest.
Because that debt is necessary to purchase a house. Very few people can afford $200k to $600k to buy a house. If you have the money buy the house without a mortgage. But, you have to be able to afford a mortgage.
100000$ is the new downpayment my kids plan to live at home and stack cash they looking at 200000$ down payments cause to afford a house on a 50000$ income requires about 200000$ down to make the payment
@@jasonleatherwood2172 Is that $50k before or after taxes? You may get a $300,000 mortgage with a $500,000 house but what are you going to drive and what are you going to eat. Tough to live on $50K.
AFTER becoming debt free, I started saving the amount that I used to spend on my mortgage. It was a pleasant surprise to see the amount of dividends and interest payments I was getting from the bank is $1000 monthly!!! I started using the $1000 as spending money and saving 100% of my take home. I used to spend $3000 on mortgage interest, bank fees, and credit card interest. Now the bank pays ME. If you lived only in debt, you will never know what it is like to be FREE
We kept a 1 paycheck buffer in the account for a few months while we were still learning to budget effectively. After dialing in the budget, cash in the accounts allocated for the various budget items and sinking funds effectively serves as the buffer. For example in Everydollar, the sum of the 'remaining' column is equal to the amount of cash in our bank account
that's a great way to do it. We "save up" in a separate savings account for annual and biannual payments like taxes and insurance. Then the cash is ready when the bills are due.
@elizabethallen4353 we do the exact same thing. It is nice just to transfer that money into the checking account to pay insurance when it's due every six months to a year.
Keep my budget on a spreadsheet with columns for each type of purchase, incomes and realtime account balance. Special formulas are used so each entry affects the checking account balance upon entry. It must balance DAILY. Each page is monthly and sums up each column as it happens. At the end of the month I can see what I spent in each category and where I can economize. Don't use actual checks, account # is right on the check! Not handing that out to anyone. Also, no checks are ever "floating" or can be stolen. A money order is cheaper and paid for upon purchase. Paid my mortgage in 4 years. Sold 3 years later, made 20%. But not really, subtract mortgage interest, maintenance and taxes. That's your true sum of capital gains. Don't over purchase to impress anyone, even yourself.
I’ve got something similar with month tabs and a running digital “checkbook” so I can see month in advance what a money movement now looks like for my bank account later. It’s always fun to have a spreadsheet do most of the work once it’s set up which is esentially all these money “tracking” apps, even Every Dollar, are doing.
@@MichaelCarrPilot it's a true fortune teller. Recently added a small module to total all assets and reflect net worth. Update when markets close every Friday. No liabilities included, they don't exist.
We need more like this... "slosh" and more importantly "planned slosh" keeps me from getting through the baby steps. Would love to call the show but haven't been able to get through
It's HARD to pay cash for a car when you start out in life with nothing, but it would be nearly IMPOSSIBLE to buy a starter house without a mortgage! Saving for the down payment is enough.
Exactly! Most people can’t afford to buy a home in cash. Unless you came from California, sold your home and had 600K of equity money and paid cash for a home in a state like Tennessee. Most people don’t have tens of thousands of dollars floating around. A car is a bit easier to get without a loan but if you’re not getting like a car worth less than 10 grand, than most people will be taking a loan. Like I agree, one thing, you should not be taking out huge loans that you cannot pay off. Like I qualified for a higher mortgage, but I wanted to keep it lower than my means because you never know what might happen.
@@ToastbackWhale doubt it in my area. Got our house back in 2021 and the market has increased by another 20-30k with interest rate at 6 to 7 percent. My interest rate is roughly 3.25
buying a car needs to start small. You can get a vehicle for $2000. Then save a bit more, sell it, and buy a $5000 car, then a $10,000 car, and so on until you have graduated up to whatever you're comfortable in or suits you. Personally I think $10,000-20,000 for a car is a perfectly fine upper limit. I'll never own another brand new vehicle. Buying used from private parties has served me well for nearly 2 decades.
I’m in Dave’s financial church, but I’m the back pew. a) I’m 75 years old. I’m retired. I have net worth of two million dollars. I have a $200,000 30 year fixed rate mortgage at 3.25%. I could pay off the mortgage with money I have in the bank. The money in the bank is earning 5% interest! b) I use credit cards. I get 3% cash back on gas. I get 3% cash back on groceries. I get 5% cash back on Amazon. I pay all my utilities with credit cards and get Amazon points on those payments. I’m very careful with my spending. I always pay my credit card bills in full. Except for the mortgage I have no other debt. I have never had a car loan. For me “saving” money by using credit cards is a game!
He's using harsh words... because they work. Dave is exactly right. If I need more than a 100$ buffer in my account I'm being incompetent with my budgeting.
The problem with saving for 10 years for a house is that the housing prices go up faster than your savings/investments (at least for right now). By the time you save $150k for a house, that house will now cost you 200k.
Something else that should be mentioned to all, is to pay your house property tax and insurance on your own and not through your mortgage. I pay my self monthly, and invest it making around 15% on my money and pay taxes every six months.
Remember, the most common type of slavery during the Old Testament era was due to debt. People who owed money and couldn't pay it literally became slaves to their lender to pay off their debt. The year of Jubilee helped such people in those situations. I agree wholeheartedly with the application of Scripture today and with Dave's personal choices for his finance and understand why the only debt he permits for others is a mortgage.
Living in a rural area with harsh winters (your car dies, you could die) you need a reliable car if you have to drive in the winter. I would much rather see a friend take out a prudent loan to get a solid reliable car than to buy the $1500 clunker they could afford without borrowing. That's an edge case I agree. But there are times beyond a mortgage where prudent use of debt is reasonable.
I’ve had a 900 dollar car go for 3 years with no trouble and my mother was stranded in her $30000 car with a blown head gasket. It’s not about the money you spent on the car. Even cars you took a loan out on break down. It’s just a justification to by a car out of your price range. Bring a lighter and some blankets. Even if you drive a 30000 dollar car.
@@JeremyWinkels Yup, I've got a nothing fancy but in good shape subaru and in the winter the trunk has a couple blankets, a sleeping bag, some extra warm clothing, a minimal set of tools, and a box of chocolate bars. (Somehow the chocolate is always missing come spring, strange). But from personal experience I can tell you I've rescued a lot more friends, relatives, and total strangers driving $900 cars than I have driving $30000 cars. But I'm not saying you need a $30000 car - I'm saying you need a solid reliable car. If you can get that for $900 good for you. But if it's a $900 car you're not sure about or a $3000 car you do think is reliable move mountains to get that $3000 car.
I feel that renting falls into borrowing. Weather a house, car, stereo system couch. When you rent anything you are borrowing that item and paying to borrow it. The land lord is letting you borrow "lend" the living space in exchange for money. It's just another method loaning. Lease, lend, loan all the same just different structures. Different illusions.
I’ve listen to Dave on and off for many years. What he is saying and what this pastor called in about is true. It does go against biblical principles of money and debt. I will say this and I am a prime example. I work in construction, I drive and wear my truck out. My last truck had 348k miles on it before I got my “new” one. Which clearly was used not a new truck. I am debt free (minus my home) but Dave is 100% correct my truck goes down in value each day I drive it. My home has only gone up. Bought my house for $146k in 2016. Refi to 15 year mortage at 3.1 and now my house appraises for $335k. I have well over $200k in equity. So essentially yes do I owe on my home. I do but it is on 15 years I am paying off aggressively and furthermore I have no other debt and $200k+ in equity so call it “good debt” I guess plus most important aspect of anyone’s life is shelter. If you have a place to sleep, be secure, take a hot shower, most important who cares if dinner is a $1 gas station hotdog you have a place to come to and a place to sleep and rest
What worked for me is having an E-Fund in place before tackling debt because stuff happens and if you live somewhere where you need a car, you'll want at least 1k in an account for repairs and car maintenance. Essentially, I did step 3 before step 2, and if I had to go into the E-Fund, I made sure it was back before continuing debt payments. It made the whole process a lot less stressful doing it this way, and if you have variable income, this strategy makes sense because you don't want to end up in a situation where you don't have income for a month and end up stepping backwards and having to put bills on a credit card. That month that that happens could be what causes you to give up being debt-free. We want to avoid this situation!
Wow. I like and his approach to telling me that he doesn't borrow. Period. It's awesome. He states somewhere around 4:20 that it's hard to tell people to save up for 10 years to buy a house with cash. I don't know where he lives but houses near me are now listing for at least 200k. I don't know anybody who has 2000 a month to pay rent which is nearing 1000 a month here for just soso housing and put the 1.6k a month into the bank ( and and not have that house $$$ within that 10 years ).
I differ on the mortgage advice in only one way. Find out what the payments would be for both a 15-year and a 30-year mortgage. Then take out a 30-year mortgage and send in the payments for a 15-year mortgage. That way if your income is suddenly reduced (you lose your job) you can reduce your mortgage payment to what a 30-year mortgage would be. As soon as you get a new job go right back to making the 15-year mortgage payments.
I call that Living By Halves. Keep all your mandatory bills, all the ones you're not able or not willing to sacrifice what you're buying from them, under half what you can afford. Thankfully my husband and I never had to deal with that (it helped that he was career military) and now he has a pension. But I based the concept on a couple of things. First, whenever I would hear had heard people who had lost their jobs, after unemployment they rarely ended up with a job that paid _less_ than half what they had been making, but to end up with only half was not an uncommon thing. The second was seeing friends of ours deal with having bought a house while they were stationed in Texas, because you must buy a house in such a seller/landlord friendly market, then not be able to rent it out when they transfered to Ft Lewis, Washington. So they were paying both rent and a mortgage. And that was off one Seargent's pay (E-5, lower supervisor level), and with two small children to raise.
In my country, your monthly rental cost is equal to or greater than what you would pay for mortgage monthly. Annual leasing is hardly done here for private housing- it's mostly done for business properties or homes run by organisations- and even so, it's not usually cheaper. So, you might as well get a mortgage, if you cannot completely fund the purchase. That's why I don't mind going the mortgage route for acquiring a house.
@@handleyobusiness Those home purchases with cash are mostly corporations buying houses and people selling a house they already own, not individuals buying their first home.
I keep a $1k buffer in my checking separate from my emergency fund. It’s basically like a secondary emergency fund but I’m lest strict on myself when it comes to spending it.
What Dave says started to make sense to me when I started to save money after being debt free. I saw my high yield savings account earning $1000 monthly interest and it nearly blew my mind. I used to pay the bank $3000 interest on my mortgage and debt payments. Now the bank is paying ME $1000 monthly which is what I use to live on, so that 100% of my take home income goes back into savings!!
Several questions….where do you bank? What is the interest rate you’re getting? How much do you have in savings? 1 mil? 2 mil? More? Thank you. My bank pays less than 1% interest and even their cd’s are 5%
Awesome job at saving! $250,000 is probably too much for a savings account. Not just Dave, but nearly all financial advisors recommend 3 to 6 months of expenses. Higher isn’t better, anything beyond that should be invested. Just a heads up, I tried replying to other people’s comments. No matter what I said it was immediately removed by Utube.
@@nbdysfool3 You can Google "High Yield Savings". Right now they range from 4-6%. They can change the return rate at any time. They typically change it when the Fed changes the interest rate. If the Fed interest rate is high, then the return is high, and vice-versa. I recommend a good Money Market account instead. On average the return is slightly better than High Yield Savings. It can be done on your own but I'd recommend talking to a financial advisor to help you choose one.
Yeah the reason why he's cool with it is because of my exact scenario. Back in 2021 I bought my house quickly because the market was shooting up higher than the pace I could save. If i didn't get a mortgage I would still be saving, I might have 50k saved by now. In that same period my house has appreciated in value by 150k and payments due to interest rates are almost double. I'd need double the income to qualify for the same exact house. Couple that with rents going up about 30% and that would've eaten my monthly cash flow. I'd have to buy a piece of crap home in cash to afford to buy all cash, it's an almost impossible thing to do for most people.
I agree with Zachary on the buffer. While you’re right, people need to budget first, it is important. However there’s always cases of unexpected expenses, I always try to create a buffer when I can. Because I think a savings account is good but even the best savings account can have liquidity problems, so having some money instantly accessible for whatever reason be it impulsive purchases, unexpected expenses, unprocessed transactions, or an investment opportunity always buys you some time until your money from other avenues can come in.
The problem that I have had buying used cars-they all have something wrong. My last one was the transmission went out. Cost me $6000. The used cars are “Crap”. They cost me about $300 to $500 a month to continually maintain them.
Not a single used car on this planet safe or maybe Mercedes and BMWs will cost you that much a month and maintenance that is pure BS also we're talking about you being lazy enough and complacent enough to take your car to the dealership because you put that many miles because you're needing oil changes and they're going to rape your wallet in the process. When an oil change is something you can do yourself, so no the only thing caution you three and 500 bucks a month is your own complacency and the unwillingness to get your own hands dirty to change your own engine oil
And yes eventually a transmission will go out in a brand new car too because that brand new car one day will become used in fact it's technically use the mom and you drive it off the lot regardless of the miles. You clearly do not understand the concept of a depreciating asset
Again your right in 14 years of owning cars the average cost for major and minor repairs (not insurance, not oil changes, not gas) has been around $2,600 per year!!!! So not a new car is the better bet BUT it requires saving thousands for.
@@donaldlyons17 No..a new car is NOT the better bet... You're forgetting INSURANCE and yearly Tag costs. ;) My 05 civic si hatchback 1st's tag was 398 bucks...in Rankin County MS Now it's 30 ish bucks tops Insurance for just liability was over 110 bucks a month back then ( and yes I shopped around with ALL available insurance providers) ...Now it's more like 25 to 28 bucks tops a month Do the math. I'll take a 4 or 5 year old vehicle over a brand new one ..ANY day now
Props to Dave for not flexing when the guy thought he had an improvement for the baby steps. I would've been like, wait, so you're a couple months to this and broke, and I've got 30 years of practice with millions of customers and a 600m+ business that was built literally around these 7 baby steps, but you're telling me I did em wrong? 😂
I don’t think we need a buffer. Ever since we surpassed BS 4 there has been plenty of extra in the checking account. The caller is still in middle class mentality.
I live my life without debt. The only debt I ever felt comfortable was when I bought my house. The trick it to buy a house you can afford and can pay off in a reasonable manner. It is paying for my shelter that I otherwise would pay for rent. I pay for everything else with cash. If I ever took out a loan for a car I always made a sizeable down payment and paid it off way early. Now living worry free!
I want to see the math from Dave on how he would expect someone to buy a house on a 15 year mortgage for less than 25% of the take home pay. I want him to do the math and tell me how the average American can afford that in these times when the average household income is around 70k. You'd need to make over 200k a year to afford a very modest home at an insanely good rate. I got out of consumer debt 8 years ago because of Dave's baby steps but I cannot imagine how these rules on mortgage apply to today and still they are discussed as if they are relevant. It's a nice goal, sure, I'd prefer it be 10% or less but in today's market and with today's wages, 99% of the people who follow him could not buy a house. You have to break the rules to follow his rules which is insanity. PLEASE SHOW US THE MATH and make it make sense. Please.
Over the past 80 plus years the value of gold has had a crappy Roi including silver as well. That is the reason why Dave does not recommend you invest in gold and silver. It's not like this fact is hidden it's probably knowledge
A buffer is key for more than money but especially money. My church does it's budget off of previous giving not projected and takes off 10%. So its off 90% of what has already come in.
My financial peace came when I didn't have to do regular budgets anymore. I hit a point where I had enough savings and buffer that -- unless it's an unusual purchase -- I don't have to think about it. This doesn't mean I don't have a budget, but it only needs to be updated a few times a year to check that things are still good. As for daily activity, I simply live in a way that my spending is well within my means. (And I do realize that some folks can only stay on course by tracking every dollar, so this might never be for them.)
1. You will be paying somebody a monthly payment for your living environment. There is no option to pay cash for that in a quick time span, unlike buying an affordable car with cash. 2. A mortgage is unique. Basically, no other form of debt preserves and even eventually increases your net worth, in and of itself. 3. Biblical principles don't always = overarching uniform commands.
By the time someone saves up enough to buy the house the house has increased in price where they still can't afford it. People would constantly be chasing the price without a mortgage and never actually get there.
I do not think so. If you saved up to buy a house and were saving to buy a 300k house and saved the 300k, you are still in a better position than not having that money.
Adding to insideout 's point.... worst case you end up having to agree of a mortgage of around 10 to 20 something thousand dollars. Which unless you live in a third world country yes you'll be able to pay that off pretty damn fast
@@fusionreaper I would not call that an anomaly I would call that an idiot who can't even locate his own pants zipper by himself to properly prep to piss nor make up his mind which ghost he wants to shake hands with who can't even read a damn teleprompter
Would a buffer be something that is OK for things that you budget for that have inconsistent amounts? For example, water bill is typically around $280 every three months. This bill came and was $330! It was unexpected so would a buffer be necessary for it?
I like this answer from Dave and it is actually consistent with biblical principles. The Bible is anti-slavery (all humans made in the image of God), but also exists in the real world where the practice is impossible to stamp out in many cultures and so also gives out principles for handling slavery in a more godly way.
Buffer, is necessary, you dont want to see a 0 in the bank account. If you follow the budget correctly (which is not easy) then that $50 buffer is the new $0. But you have to get used to leaving half your mortgage payment because pay day is every 2 weeks and the autopay on the 15th so you have to budget to ensure it is their before that date. The struggle is real.
“I’m a small town pastor…so I know more than everyone…as a small town pastor…I like pointing out things I find inconsistent…because as a small town pastor…did I mention I’m a small town pastor…”
Wow. He's a small town pastor? I didn't know. I wish he would have said something! It's too bad he didn't say anything because it's completely relevant to the call!
@@JustinCase780 I would love to see you call into a radio show so we can pick apart each and every word you have to say. Maybe the pastor was nervous. You are not being kind in this instance, and nothing the pastor said was negative.
It’s worth adding that simply living by biblical principles, though wise, is not the fulfillment of their purpose. The wisdom is a gift from a holy, fearsome, living God who in his love made a way for us to be saved from wrath by his son Jesus. If I have no debts to man, but my incalculable debt to God isn’t paid, all is lost.
So I've had my mortgage for 22 years, I bought it with $20,000 down for $115,000 . I filed bankruptcy in 2017, the balance was 85,000. You tell me how it's possible that I still owe $90,000 on my loan even since October I've been paying on it for 7 months now and it hasn't gone down at all. The first thing I'm behind and since I've got off my forbearance and I've been paying it they've been back dating it a year so I can't even get any credit I can't get an equity loan or anything they're ruining my credit😢. Would you happen to know the best negotiable instruments and you didn't use to pay off the balance and get settled once and for all??
I saved up for 6 years to buy a house. It wasn't a $400k house, but it is a house and its fully paid off and it's MINE. I make $32k a year and bought the house in 2023, so everyone whining about "you cant do that in todays society" are just negative and living above their means.
@@noxproductions6851 What was your purchase price then? You grossed $192k over 6 years and that let you buy in cash. The vast majority of areas with jobs in this country simply do not have housing that dirt cheap in 2023.
Also, when the alternative to borrowing is renting, that’s not necessarily any better. What you don’t want to do is to buy more house than you can afford.
*I love the grounded reality of this channel!!!* Retirement took a toll on my finances, but with my involvement in the digital market, $27,000 weekly returns has been life changing. AWESOME GOD😊🎉😊❤
My condo. The one I own. I purchased for cash in 2010. I never had a mortgage on it. Same for the cars my wife and I own. All cash. We have politely told the car salesman when they try to get on a loan. We decline it. They get pissed. We have even walked out of a car negotiation over price, and the fact they didn't know how to do a sale with cash...no loan.
It is difficult to pay with cash. They want your financing. In order to negotiate you almost have to allow the financing. Just make sure you pay off the loan then next day. I reme bae those days when cash was king.
A well thought out home purchase using a mortgage is one of the best ways the average person has to build wealth. I have been pushing my children to buy a home for the last 25 years. Now, at 40 and 41 years of age, they are both still renting and they are both being pushed out of their rental homes because the owners want to sell. Because of the drastic price increases of homes in the area and the price increases in rentals they are priced out of the market. I suppose they can find a bridge to sleep under.
@@matthewphillips5483 In limited cases, yes. But debt is a dangerous double edged sword and extreme caution must be exercised when considering using it.
You're paying rent and flushing that, what would otherwise be your own equity in home ownership, down a toilet. Especially long-term. Short-term I can see the argument for renting. Say 5 years or so. But 15, 20 years? You really should be investing in your own home equity.
@@AnAZPatriot This is a stupid myth that has been debunked over and over again. Shelter is always going to cost you money whether you buy or rent. In pretty much every major metro now, the cost to buy exceeds the cost to rent by a wide margin. Placing what would be your down payment, closing costs, and difference between mortgage payment and rent into an index fund based on the SP500 will yield you as much or more than any equity you will likely get into your home. Renters don't have to put a new roof on their home, repair the HVAC, replace the water heater, etc. All of that money can go into the market. In California metro areas, the average family only stayed in their home less than 5 years (this trend dates back as least as far as 2019). This means home buyers are literally "throwing money down the drain" with closing costs, etc. Those that stay, many end up with a HELOC or do a cash out refi that cannibalizes equity, raises payments, and sometimes resets the clock on the mortgage. Your counter will likely be "most renters lack the self discipline to invest the difference in the market" which is true. What is also true is that most home buyers don't pay off their home nor stay out of debt either. Most "homeowners" will never see the end of a mortgage in their lifetime due to bad financial decisions. I'm not anti owning a home. I'm anti-mortgage. Rent + invest in the markets until your investments can buy you a home in cash. It doesn't take any longer than (and is actually quicker than) waiting to pay off the mortgage with the bank. Instant gratification culture is destroying everyone.
@@matthewphillips5483 Provably false. 40% of homeowners pay off their mortgages sometime in their lifetime (citation: Bloomberg, Nasdaq, Axios). What percentage of renters invest in the S&P? I rest my case.
What Dave says to do that it's not like you are borrowing more money you're moving your debt around to where it's easier to pay. If you owe the IRS money then getting a loan from a credit union to cover it makes the IRS off your back but you still owe the same amount of money.
That's converting one type of debt for another rather than going into debt. If you are in debt to the tax man, that's a really bad debt. Converting that to a debt to a credit union is a great improvement. Converting a large car loan and an expensive car into a small credit union loan and a cheap car is also a great improvement.
@@jackiechoate6163 You can setup a payment plan with the IRS. Interest will still be cheaper then taking a loan. But he hates when people do debt consolidation to move debt around. But to move IRS debt, is OK?
As Dave says, cash is king, buying a good home justifies debt, the home goes up in value, and can stabilize your expenses, while still caring for yourself and family.
I disagree with him on the buffer. I feel like it needs to be the size of your largest auto payment. Then you are covered should they draw it a day early for a holiday or a weekend, or whatever. It should never be looked at, much like an emergency fund, unless it is needed. Not only for auto pay, but even for things that make sense. Let's say your grocery store has a huge meat sale, but it isn't in your budget to spend money on 2 months worth of meat, even though that two months worth today to save you needing to buy any meat next month and cost you less money. I personally never have less than $5000 in my checking, so i never need to worry about it, but I'm also much further on in the process than most, but an extra $1000 could save you more, or cover you when you do slip into old habits.
A buffer of an entire month's worth of money means that if there's a problem with your employer's pay system, you're still ready for your bills to come in.
@@pvtbuddie no, a months worth of expenses means you are prepared for an actual emergency rather than the risky $1000 that, in this day and age, doesn't cover much of a financial mess
@@JasonGroom : A month's worth of spending money means staying a month ahead on your spending money. That's not savings, or an emergency fund, since it's there for a specific types of contingencies that should be ballanced out, hopefully, within the next month to six weeks. Also, whatever you think of Dave's advice, it's intended for people who have found themselves to be, and to have been, burried under debt and _without_ any emergency fund. And $1000 will still pay for most of the emergencies that get put on credit and set people back. Fix that one part that broke on the car, replace the washer with another used one, etc. Then you rebuild it, and go back to your snowball. Myself, I would say to keep adding $50 to that fund every month, or at least 1/10th of what's available after your necessary monthly spending, along with paying down your debts, but, thankfully, I've also never been under much unplanned debt, or stuck for long at minimum payments.
Trust us Zachary, you arent the only one with a problem with the $1,000 emergency fund since the 90s. But we can still agree with majority of the Ramsey principles.
I like your comment and that's how more people should be. You don't have to agree with everything. I certainly don't, but overall, I find Ramsey's financial principles a good way to live. What bugs me are those people who follow Dave and comment negatively on every video because they clearly disagree with most or all Dave is about. To them I say, you should follow someone you agree with. Shaking my head at these people!
Not sure if i fall under this situation or not. My house is paid for i have only one debt i did buy a Tesla last year i put 20K down i was spending $750 a month on gas now i spend $500 on car payment probably the dumbest thing i have done. but i also put %20 into my 401k
The used car market in the uk is a lot different than what ramsay would say, i bought by car for 6k 5 years ago and I could sell it for 6k if i wanted now lol
Dave Says: If you owe it, pay it Dave Does: Declare bankruptcy Days Says: Eagle that doesn't leave the nest is a turkey Dave does: my adult daughter still works for me Dave says: you need to find work outside the home to find purpose and contribute to society Dave does: my wife never had a job even after all 3 kids left home for college
@@siva47931 Also the Golden rule treat people like you wanna be treated. Runs his business like a tyrant. Single moms are heros. Fires a women who wasn't married and got pregnant.
@@siva47931bro you’re reaching so hard. Dave declared bankruptcy 30 years ago. And he has always supported the idea of being a stay at home moms when it works financially. Swing and a miss
@@siva47931I have to correct you. Sure one daughter is an on air personality/author who uses her dads name to sell books but let’s not forget his other daughter runs his charity, his son runs his business, and his son in law runs his real estate business….but I’m sure it’s a coincidence and they were just the best people for the jobs.
It also equals a relatively secure environment and one which you can tailor to your own liking. Added bonus is that mortgage repayments fall relative to income whereas rents rise.
is there a video that does a deep dive on dave's study of the 10,000 millionaires? Heard him mention it for years but never read details on it or seen a video about it.
I bought a house I could afford but didn’t have enough for a down payment. I got owner financing with a lower rate than what the bank could give me and no PMI. Today that house is worth double. If I listened to Dave’s advice I would have never got that home today.
One consideration is earn 30% - 50% pa. from investment in order to buy a house in 5 years. A house MAY be an investment using leverage (mortgage) requires risk management skills. So either payoff in 7 years or pay cash from savings from high investment gains.
Servant or slave in this context does not matter they're close enough to being the same in that yes they can legally come after you and cause the administration of punishment upon you if you don't pay back the debt And the feeling of slavery in this case is not too far off
When you're in Baby Step 2, your buffer should be the $1000. Also, dont pay extra on the credit cards until AFTER the month is over. If i had budgeted $500 over to pay for a credit card in August, I'm not paying that $500 until September.
The best thing I ever did to get out of the middle class rat race was when the first car I ever bought was paid off, I kept making myself those car payments and didn't let life creep occurr. I then drove that car for 15 years, and when I needed a new car again, I was able to pay cash for it. I'm still driving that car 15 years later, with no signs of needing a new one any time soon. This has allowed me to pay off my home and invest over all these years, and have become a millionaire over the last 2 decades.
Such a humble, transparent, gracious answer to the Pastor, and kudos to the Pastor too!
The pastor was a smart ass high and mighty dude. Dave was cool to him. but the "pastor" was entitled and arrogant.
Na Davey got donged.
That Pastor will be humbled by God for his arrogance
Following Ramseys steps, I paid off my 30-year mortgage in 5 years.
😂😂😂😂
Lolz
Nice.
The heck do you do for a living?🤣
I got a 15 year mortgage and paid it off in less than 10 years. I’m now debt free. Just got utilities now at 37 years old.
And property tax and insurance.
Cool story bro
Bro I’m aiming for where you’re at. 300k house bought in 2023 and I’m now below 200k left. Pray for me.
I'm sad for you... You are looking to TH-cam for approval... 🙄
Just got utilities? Are you playing monopoly?
Very cool way to end the call with psychological advice from Dave about the behavior for the budget to become a habit takes 90 days. I needed that reminder.
Regarding the callers question about a "buffer"; I had the same concern when I started the baby steps, so what we do is make sure that our main checking account has the exact amount that we plan to spend that month on the 1st of the month. Each paycheck I receive during the current month is for Next month's expenses. That way we are always a month ahead instead of being paycheck to paycheck. We also have a separate checking account for our sinking funds for annual or quarterly costs like insurance, school supplies, etc.
After you get your $1000 emergency fund, Dave does recommend building a 6 month cash reserve, doesn't he? I have mine, but I thought it was on his recommendation...
Dave doesn't like your mortgage. He just won't yell at you for it.
Well said.
Bt the show encourages you to become a home owner first and then pay off the mortgage. It’s not rlly encouraged to save for 10 years and pay cash as Dave said
Unless your mortgage is a large chunk of your income. THEN you will get yelled at.
@@Shortballa11 You cannot save enough in 10 years to buy a house. A $300,000 house would require you to save $30,000 a year. But in 10 years the same house will cost $400,000.
@@Fred2-123 don’t argue with me. I am telling you exactly what Dave said in the video. He literally said 10 years, I’m just quoting.
We have owned three houses and bought with cash. Our current home is 100% paid for and we have 0 debt.
You would be much richer if you invested that money over 30 years.
@@privacyplease1556 - LOL - I did better with my house investment than any 401 K - but OK
Most people can't do that. Duh
@@janeoleary8454 - Lost it all twice and since then have had 4 houses and am mortgage free - DO not say you can't -
@@privacyplease1556 Borrowing money to invest is a fools game.
Proverbs 22:7 isn’t a Biblical law, like all the Proverbs. It’s advice that will make your life more fulfilled and God-centric. It doesn’t say borrowing is a sin, but it is saying there are ramifications to borrowing.
Biblical principle
@@insideoutsideupsidedown2218 doesn’t make it a law. Just like proverbs 15:1 is literally advice on how to turn away wrath. Not a law but you probably should follow it if you want less stress
2 Timothy 3:16 "All scripture is given by inspiration of God, and is profitable for doctrine, for reproof, for correction, for instruction in righteousness:"
Slave is a pretty strong word for advice.
Way to be pedantic
I live in the country too, a car is absolutely necessary. But nobody needs a $1,000 a month truck payment. You can buy a $1,000 car, then save up some money, buy a $3k car, work your way up to a $10k car, etc.
A 1000 dollar car are you high?
@lukeforbes2008 $1k cars do exist. They aren't pretty, but my son just bought a 1998 Cavalier with 150k miles on it for $750. It's not perfect, but it runs well. We threw some cheap tires on it and the total was less than $1k.
@@lukeforbes2008lol yeah 3000$ is the 1000$ car 10 years ago
@@lukeforbes2008I do it all the time, especially out in the country. Used cars. Living rural is actually affordable.
Actually sounds wasteful considering the $1k and $3k cars will cost you in immediate repairs
a mortgage is the best of a bad situation, and Dave isn't even a hypocrite on this. if you have the money to buy outright he recommends it. This is consistent with his own life.
Please make a Canadian version of the Every Dollar App
I need a Nigerian version.
I've been making car payments for the last twenty-eight years. But I don't make them to the bank. I make them to myself. I pay cash for every car I've ever owned because instead of paying a bank (with interest), I put it in a sinking fund. Cars are subject to the second law of thermodynamics- they are moving from order to disorder; they are breaking down and don't last forever, so make payments to yourself, pay cash, and NEVER PAY INTEREST.
What's the average price you've paid cash for a car?
@@BREEZYM6015 The last two cars have been a 2012 Nissan Maxima and a 2016 Maxima, and I paid $10k and $14k respectively. I save $500/month in a car fund and I drive my cars until I donate them, usually around 200k miles. I keep my cars for an average of eight years.
I’ve started doing the same
@dkibler1974 25k miles per yr is a bit over the std annual, so you must commute alot. Smart that you don't have a truck or SUV, so you save on gas. Based on your annual mileage, there is no point buying new as you are going to destroy and throw your money, so you buy used, save gas and put that on for the next car.
Unfortunately, I'm a high school drop out and not a student of physics. Despite this compromise, I have been able to deduce several things pertaining to cars: When a car is operating it is subject to all of Isaac Newtons principles pertaining to motion and energy. A financed car, however, is subject to not just the same forces that an operating vehicle is, but is subject to forces above and beyond those that are expected by the operator. I call the phenomenon cash entropy.
A house will make you money in the long run if you take good care of it. If you borrow money for pretty much anything else it would depreciate in value.
Enjoy it while you can. Don't worry about depreciation. Just ad long as you can afford it.
The value of a house is not in its ability to make you money nor serve as a tool to acquire "cheap" finance. That is a very recently adopted economic concept. The value of a house is much more easily defined, especially if you've lived without one.
going into debt to purchase a profitable business or education in a STEM field will bring you more ROI than a house ever will but Dave is only okay with mortgage debt
The $1,000 is a separate emergency fund, not the maximum amount that you can have in your day-to-day checking account.
They still haven't changed this? Imagine your estimated debt payoff date is 2 years aways wtf u going to do with 1k? That's like not even a months worth of groceries these days wtf..
@@JohnLopez-gt6og1000$ is “starter” fund. 3-6months of expenses once consumer debt is payed is what they recommend.
@@JohnLopez-gt6og, the $1K *starter* emergency fund is specifically to have cash set aside for a new starter, not a whole debt reduction.
@@JohnLopez-gt6og The $1000 is solely to prove to non-savers that they CAN in fact save money. It's called a "baby step." You set a small goal in order to get started towards larger goals. If you think it's not enough does that mean you already have MORE saved? Or does it mean you're not even going to try to save $1000 because it's a pointless amount?
Wait, so how would someone account for emergency situations? What if a tree fell on your car during a storm?
I’ve been listening to seven months. This is a great detail about planning.
Not really.
It is less about planning and more about behavior.
Maybe at first it's about planning but as your behavior changes it requires less planning. I mean do you plan to breathe or do you just breathe. When your behavior changes for the better, you won't need as much thought and planning!
You have to live somewhere. You either pay rent or pay a mortgage. In 15 or 30 years the mortgage will be paid off, but the rent will never stop.
I personally do not want to live in a shared wall apartment and have the communal knowledge of neighbors
On the other hand, if you rent you don't pay for repairs and improvements.
@@veramae4098yeah if you truly think that part of your rent doesn't go towards repairing anything involving the place you live in, you are severely mistaken. Renters are going to account for the possibility of repairs every single month in a dwelling you live in
@@veramae4098 Lol how naive. You're right, landlords take care of that out of the kindness of their hearts. It is why rent is NEVER more than the mortgage.
@motoryzen thats funny. as a renter i don't recall having to take out an additional $3000 for a water heater replacement, or $10k for a new roof. my rent doesn't go up anywhere near that much. also i don't need to buy a mower, clean gutters, install fencing, worry about pests, shovel snow before i get a ticket, etc
Pastor was right about the buffer. If you're dirt poor, that buffer keeps your account from overdrafting while you're paying your debts. I'll try that.
A good accountant knows when he's out of money. A buffer is not "necessary"
@timkopp2204 it's still good to have one even if it isn't necessary
@santiagolerin yes. Thats called an emergency fund/rainy day fund. Otherwise, it just becomes spending money. For "$5 coffees"
And the worse you are at budgeting the more the things that should have been predicted and put into the budget are instead taking chunks out of your buffer, means you'll need a bigger buffer, means less of your budget goes to paying debts, means you'll be in debt longer, means you'll pay more total in interest.
@@gorkyd7912 reasonable points as well. I'll still try the buffer. It makes me feel more secure, but I see your point.
😂😂😂😂 the way he guesssed his age was spot on saying “kid, just cause your a pastor, doesn’t mean you know the bible, thank you for asking an elder”😂😂😂
The verse is correct, the borrow is slave to the lender... It doesn't make it a sin, it's a statement of relation between people. Not a sin.
It is a sin in Christanity and Islam
@@szey9488 it is not a sin in Christianity. Never does it say so. It just says that it is a thing that borrower is slave to a lender.
@@theadventurousprogrammer6449 therefore, when the debt is paid, the bond is lifted. No debt IS freeing.
The tenant is also slave to the landlord. But at least with a mortgage there is a schedule for ending that master-slave relationship.
@@szey9488 Excess interest that is burdensome to the borrower is the sin -- "don't take a man's cloak beyond nightfall"...
Because that debt is necessary to purchase a house. Very few people can afford $200k to $600k to buy a house. If you have the money buy the house without a mortgage. But, you have to be able to afford a mortgage.
100000$ is the new downpayment my kids plan to live at home and stack cash they looking at 200000$ down payments cause to afford a house on a 50000$ income requires about 200000$ down to make the payment
@@jasonleatherwood2172 Is that $50k before or after taxes? You may get a $300,000 mortgage with a $500,000 house but what are you going to drive and what are you going to eat. Tough to live on $50K.
@@Wall2000xExtremely regionally dependent. My *gross* is a hair over 50k and it’s perfectly livable here in Cincinnati.
AFTER becoming debt free, I started saving the amount that I used to spend on my mortgage. It was a pleasant surprise to see the amount of dividends and interest payments I was getting from the bank is $1000 monthly!!! I started using the $1000 as spending money and saving 100% of my take home. I used to spend $3000 on mortgage interest, bank fees, and credit card interest. Now the bank pays ME. If you lived only in debt, you will never know what it is like to be FREE
In my areaa a new 1600 sq ft house us like 350000-400000 so with 200k down ur payment be like 1700$ or so
Gold is the money of kings, silver is the money of gentlemen, bartering is the money of peasants and debt is the money of slaves.
Very well said…! Is that a quote from the past?
Where is this from?
@@morbuenogroup3092This is from Norm Franz, author of, 'Money and Wealth in the New Millennium'.
@@LovesGrillingThis quote is from Norm Franz. See previous comment.
What's bitcoin the money of?
You can tell how immediately extra respectful Dave is when he hears the caller is a Pastor
Until he calls him "incompetent at budgeting" 😂
We kept a 1 paycheck buffer in the account for a few months while we were still learning to budget effectively. After dialing in the budget, cash in the accounts allocated for the various budget items and sinking funds effectively serves as the buffer. For example in Everydollar, the sum of the 'remaining' column is equal to the amount of cash in our bank account
that's a great way to do it. We "save up" in a separate savings account for annual and biannual payments like taxes and insurance. Then the cash is ready when the bills are due.
@@elizabethallen4353 yeah same here! Those are all in our budget under a "future due" section
@elizabethallen4353 we do the exact same thing. It is nice just to transfer that money into the checking account to pay insurance when it's due every six months to a year.
The episode we’ve all been waiting for!
Why did you give your channel this name?
It's extremely sus btw
Keep my budget on a spreadsheet with columns for each type of purchase, incomes and realtime account balance. Special formulas are used so each entry affects the checking account balance upon entry. It must balance DAILY. Each page is monthly and sums up each column as it happens. At the end of the month I can see what I spent in each category and where I can economize.
Don't use actual checks, account # is right on the check! Not handing that out to anyone. Also, no checks are ever "floating" or can be stolen. A money order is cheaper and paid for upon purchase.
Paid my mortgage in 4 years. Sold 3 years later, made 20%. But not really, subtract mortgage interest, maintenance and taxes. That's your true sum of capital gains. Don't over purchase to impress anyone, even yourself.
I’ve got something similar with month tabs and a running digital “checkbook” so I can see month in advance what a money movement now looks like for my bank account later. It’s always fun to have a spreadsheet do most of the work once it’s set up which is esentially all these money “tracking” apps, even Every Dollar, are doing.
@@MichaelCarrPilot it's a true fortune teller. Recently added a small module to total all assets and reflect net worth. Update when markets close every Friday. No liabilities included, they don't exist.
We need more like this... "slosh" and more importantly "planned slosh" keeps me from getting through the baby steps. Would love to call the show but haven't been able to get through
It's HARD to pay cash for a car when you start out in life with nothing, but it would be nearly IMPOSSIBLE to buy a starter house without a mortgage! Saving for the down payment is enough.
Not to mention that the cost of housing is going up so good luck trying to save all that money at once
@@shinineagle23I’m not convinced that 90% of people could mathematically save for a house fast enough to outpace housing price inflation.
Exactly! Most people can’t afford to buy a home in cash. Unless you came from California, sold your home and had 600K of equity money and paid cash for a home in a state like Tennessee. Most people don’t have tens of thousands of dollars floating around. A car is a bit easier to get without a loan but if you’re not getting like a car worth less than 10 grand, than most people will be taking a loan. Like I agree, one thing, you should not be taking out huge loans that you cannot pay off. Like I qualified for a higher mortgage, but I wanted to keep it lower than my means because you never know what might happen.
@@ToastbackWhale doubt it in my area. Got our house back in 2021 and the market has increased by another 20-30k with interest rate at 6 to 7 percent. My interest rate is roughly 3.25
buying a car needs to start small. You can get a vehicle for $2000. Then save a bit more, sell it, and buy a $5000 car, then a $10,000 car, and so on until you have graduated up to whatever you're comfortable in or suits you. Personally I think $10,000-20,000 for a car is a perfectly fine upper limit. I'll never own another brand new vehicle. Buying used from private parties has served me well for nearly 2 decades.
I’m in Dave’s financial church, but I’m the back pew. a) I’m 75 years old. I’m retired. I have net worth of two million dollars. I have a $200,000 30 year fixed rate mortgage at 3.25%. I could pay off the mortgage with money I have in the bank. The money in the bank is earning 5% interest! b) I use credit cards. I get 3% cash back on gas. I get 3% cash back on groceries. I get 5% cash back on Amazon. I pay all my utilities with credit cards and get Amazon points on those payments. I’m very careful with my spending. I always pay my credit card bills in full. Except for the mortgage I have no other debt. I have never had a car loan. For me “saving” money by using credit cards is a game!
what credit card is that
I keep a $20k buffer for my business, and maybe $3k for my personal over and above what I think I need to have in there.
He's using harsh words... because they work. Dave is exactly right. If I need more than a 100$ buffer in my account I'm being incompetent with my budgeting.
The problem with saving for 10 years for a house is that the housing prices go up faster than your savings/investments (at least for right now). By the time you save $150k for a house, that house will now cost you 200k.
Yep, if I'd been saving for the last 10 years I could now still not afford that $120,000 house that I wanted 10 years ago which now costs $650,000.
Step 1 to save $1k is a training tool. Step 3 to save 3 months is the buffer tool.
Thank you Russ for your well reasoned, helpful comment
Poor Dave and John, imagine hearing that guy "Directly in your ear".
Something else that should be mentioned to all, is to pay your house property tax and insurance on your own and not through your mortgage. I pay my self monthly, and invest it making around 15% on my money and pay taxes every six months.
Thank you for providing Every Dollar. Wonderful APP!
You have to either pay a mortgage or pay rent. I’d rather pay a mortgage.
Hear, hear. Neither is fun, but in the long run, paying a mortgage is much more likely to leave you with a lot more options.
You would rather be a slave. Cool brah. Get a fetlife account.
Remember, the most common type of slavery during the Old Testament era was due to debt. People who owed money and couldn't pay it literally became slaves to their lender to pay off their debt. The year of Jubilee helped such people in those situations.
I agree wholeheartedly with the application of Scripture today and with Dave's personal choices for his finance and understand why the only debt he permits for others is a mortgage.
Living in a rural area with harsh winters (your car dies, you could die) you need a reliable car if you have to drive in the winter. I would much rather see a friend take out a prudent loan to get a solid reliable car than to buy the $1500 clunker they could afford without borrowing. That's an edge case I agree. But there are times beyond a mortgage where prudent use of debt is reasonable.
I’ve had a 900 dollar car go for 3 years with no trouble and my mother was stranded in her $30000 car with a blown head gasket. It’s not about the money you spent on the car. Even cars you took a loan out on break down. It’s just a justification to by a car out of your price range. Bring a lighter and some blankets. Even if you drive a 30000 dollar car.
@@JeremyWinkels Yup, I've got a nothing fancy but in good shape subaru and in the winter the trunk has a couple blankets, a sleeping bag, some extra warm clothing, a minimal set of tools, and a box of chocolate bars. (Somehow the chocolate is always missing come spring, strange). But from personal experience I can tell you I've rescued a lot more friends, relatives, and total strangers driving $900 cars than I have driving $30000 cars. But I'm not saying you need a $30000 car - I'm saying you need a solid reliable car. If you can get that for $900 good for you. But if it's a $900 car you're not sure about or a $3000 car you do think is reliable move mountains to get that $3000 car.
I feel that renting falls into borrowing. Weather a house, car, stereo system couch. When you rent anything you are borrowing that item and paying to borrow it.
The land lord is letting you borrow "lend" the living space in exchange for money.
It's just another method loaning. Lease, lend, loan all the same just different structures. Different illusions.
I’ve listen to Dave on and off for many years. What he is saying and what this pastor called in about is true. It does go against biblical principles of money and debt. I will say this and I am a prime example. I work in construction, I drive and wear my truck out. My last truck had 348k miles on it before I got my “new” one. Which clearly was used not a new truck. I am debt free (minus my home) but Dave is 100% correct my truck goes down in value each day I drive it. My home has only gone up. Bought my house for $146k in 2016. Refi to 15 year mortage at 3.1 and now my house appraises for $335k. I have well over $200k in equity. So essentially yes do I owe on my home. I do but it is on 15 years I am paying off aggressively and furthermore I have no other debt and $200k+ in equity so call it “good debt” I guess plus most important aspect of anyone’s life is shelter. If you have a place to sleep, be secure, take a hot shower, most important who cares if dinner is a $1 gas station hotdog you have a place to come to and a place to sleep and rest
What worked for me is having an E-Fund in place before tackling debt because stuff happens and if you live somewhere where you need a car, you'll want at least 1k in an account for repairs and car maintenance. Essentially, I did step 3 before step 2, and if I had to go into the E-Fund, I made sure it was back before continuing debt payments. It made the whole process a lot less stressful doing it this way, and if you have variable income, this strategy makes sense because you don't want to end up in a situation where you don't have income for a month and end up stepping backwards and having to put bills on a credit card. That month that that happens could be what causes you to give up being debt-free. We want to avoid this situation!
Did u hear Dave say "Am on my 34th anniversary of my 30th birthday"😂😅😅😅
Yes. We are not deaf.
Wow. I like and his approach to telling me that he doesn't borrow. Period. It's awesome. He states somewhere around 4:20 that it's hard to tell people to save up for 10 years to buy a house with cash. I don't know where he lives but houses near me are now listing for at least 200k. I don't know anybody who has 2000 a month to pay rent which is nearing 1000 a month here for just soso housing and put the 1.6k a month into the bank ( and and not have that house $$$ within that 10 years ).
I differ on the mortgage advice in only one way.
Find out what the payments would be for both a 15-year and a 30-year mortgage.
Then take out a 30-year mortgage and send in the payments for a 15-year mortgage.
That way if your income is suddenly reduced (you lose your job) you can reduce your mortgage payment to what a 30-year mortgage would be. As soon as you get a new job go right back to making the 15-year mortgage payments.
I call that Living By Halves. Keep all your mandatory bills, all the ones you're not able or not willing to sacrifice what you're buying from them, under half what you can afford.
Thankfully my husband and I never had to deal with that (it helped that he was career military) and now he has a pension. But I based the concept on a couple of things.
First, whenever I would hear had heard people who had lost their jobs, after unemployment they rarely ended up with a job that paid _less_ than half what they had been making, but to end up with only half was not an uncommon thing.
The second was seeing friends of ours deal with having bought a house while they were stationed in Texas, because you must buy a house in such a seller/landlord friendly market, then not be able to rent it out when they transfered to Ft Lewis, Washington. So they were paying both rent and a mortgage. And that was off one Seargent's pay (E-5, lower supervisor level), and with two small children to raise.
In my country, your monthly rental cost is equal to or greater than what you would pay for mortgage monthly. Annual leasing is hardly done here for private housing- it's mostly done for business properties or homes run by organisations- and even so, it's not usually cheaper. So, you might as well get a mortgage, if you cannot completely fund the purchase. That's why I don't mind going the mortgage route for acquiring a house.
It’s virtually impossible to buy a home in cash these days unless you are already wealthy. Home prices are far too high compared to salaries.
Dave has never has said to only buy a home for cash.
Yet, more than 50% of home purchases are cash transactions.
@@handleyobusiness Those home purchases with cash are mostly corporations buying houses and people selling a house they already own, not individuals buying their first home.
@@PabloSanLuca I didn’t say that he did.
If you cant afford a home in cash with no interest then how do you afford it with 7-8% interest?
I keep a $1k buffer in my checking separate from my emergency fund. It’s basically like a secondary emergency fund but I’m lest strict on myself when it comes to spending it.
What Dave says started to make sense to me when I started to save money after being debt free. I saw my high yield savings account earning $1000 monthly interest and it nearly blew my mind. I used to pay the bank $3000 interest on my mortgage and debt payments. Now the bank is paying ME $1000 monthly which is what I use to live on, so that 100% of my take home income goes back into savings!!
Several questions….where do you bank? What is the interest rate you’re getting? How much do you have in savings? 1 mil? 2 mil? More? Thank you. My bank pays less than 1% interest and even their cd’s are 5%
Awesome job at saving! $250,000 is probably too much for a savings account. Not just Dave, but nearly all financial advisors recommend 3 to 6 months of expenses. Higher isn’t better, anything beyond that should be invested.
Just a heads up, I tried replying to other people’s comments. No matter what I said it was immediately removed by Utube.
I smell a scam/spam bot here.
@@blackworldtraveler3711 we’ll see if she answers!
@@nbdysfool3 You can Google "High Yield Savings". Right now they range from 4-6%. They can change the return rate at any time. They typically change it when the Fed changes the interest rate. If the Fed interest rate is high, then the return is high, and vice-versa.
I recommend a good Money Market account instead. On average the return is slightly better than High Yield Savings. It can be done on your own but I'd recommend talking to a financial advisor to help you choose one.
Yeah the reason why he's cool with it is because of my exact scenario. Back in 2021 I bought my house quickly because the market was shooting up higher than the pace I could save. If i didn't get a mortgage I would still be saving, I might have 50k saved by now. In that same period my house has appreciated in value by 150k and payments due to interest rates are almost double. I'd need double the income to qualify for the same exact house. Couple that with rents going up about 30% and that would've eaten my monthly cash flow. I'd have to buy a piece of crap home in cash to afford to buy all cash, it's an almost impossible thing to do for most people.
"The borrower is slave to the lender" is not a command, it's a statement/observation/principle. It can't be violated...
It's not a sin to be either
I agree with Zachary on the buffer.
While you’re right, people need to budget first, it is important.
However there’s always cases of unexpected expenses, I always try to create a buffer when I can.
Because I think a savings account is good but even the best savings account can have liquidity problems, so having some money instantly accessible for whatever reason be it impulsive purchases, unexpected expenses, unprocessed transactions, or an investment opportunity always buys you some time until your money from other avenues can come in.
The problem that I have had buying used cars-they all have something wrong. My last one was the transmission went out. Cost me $6000. The used cars are “Crap”. They cost me about $300 to $500 a month to continually maintain them.
What kind of used cars were you buying?
Not a single used car on this planet safe or maybe Mercedes and BMWs will cost you that much a month and maintenance that is pure BS also we're talking about you being lazy enough and complacent enough to take your car to the dealership because you put that many miles because you're needing oil changes and they're going to rape your wallet in the process. When an oil change is something you can do yourself, so no the only thing caution you three and 500 bucks a month is your own complacency and the unwillingness to get your own hands dirty to change your own engine oil
And yes eventually a transmission will go out in a brand new car too because that brand new car one day will become used in fact it's technically use the mom and you drive it off the lot regardless of the miles.
You clearly do not understand the concept of a depreciating asset
Again your right in 14 years of owning cars the average cost for major and minor repairs (not insurance, not oil changes, not gas) has been around $2,600 per year!!!! So not a new car is the better bet BUT it requires saving thousands for.
@@donaldlyons17 No..a new car is NOT the better bet...
You're forgetting INSURANCE and yearly Tag costs. ;)
My 05 civic si hatchback 1st's tag was 398 bucks...in Rankin County MS
Now it's 30 ish bucks tops
Insurance for just liability was over 110 bucks a month back then ( and yes I shopped around with ALL available insurance providers) ...Now it's more like 25
to 28 bucks tops a month
Do the math. I'll take a 4 or 5 year old vehicle over a brand new one ..ANY day now
Props to Dave for not flexing when the guy thought he had an improvement for the baby steps. I would've been like, wait, so you're a couple months to this and broke, and I've got 30 years of practice with millions of customers and a 600m+ business that was built literally around these 7 baby steps, but you're telling me I did em wrong? 😂
I don’t think we need a buffer. Ever since we surpassed BS 4 there has been plenty of extra in the checking account. The caller is still in middle class mentality.
So you have a buffer.
I live my life without debt. The only debt I ever felt comfortable was when I bought my house. The trick it to buy a house you can afford and can pay off in a reasonable manner. It is paying for my shelter that I otherwise would pay for rent. I pay for everything else with cash. If I ever took out a loan for a car I always made a sizeable down payment and paid it off way early.
Now living worry free!
He loves a good buffer.
I want to see the math from Dave on how he would expect someone to buy a house on a 15 year mortgage for less than 25% of the take home pay. I want him to do the math and tell me how the average American can afford that in these times when the average household income is around 70k. You'd need to make over 200k a year to afford a very modest home at an insanely good rate.
I got out of consumer debt 8 years ago because of Dave's baby steps but I cannot imagine how these rules on mortgage apply to today and still they are discussed as if they are relevant. It's a nice goal, sure, I'd prefer it be 10% or less but in today's market and with today's wages, 99% of the people who follow him could not buy a house. You have to break the rules to follow his rules which is insanity. PLEASE SHOW US THE MATH and make it make sense. Please.
Why isn't Dave covering this surge in inflation and the record high Gold price?
Gold is at $2350. Hard pass.
Over the past 80 plus years the value of gold has had a crappy Roi including silver as well. That is the reason why Dave does not recommend you invest in gold and silver. It's not like this fact is hidden it's probably knowledge
@motoryzen but it keeps going up?
@RBC0405 and?...you pick a time to lock in a 15 year fixed rate mortgage, then...guess what?... the price of that home no longer increases
@@motoryzen it went from $35.00 an ounce to $2,350 an ounce. How exactly is that bad return?
A buffer is key for more than money but especially money. My church does it's budget off of previous giving not projected and takes off 10%. So its off 90% of what has already come in.
My financial peace came when I didn't have to do regular budgets anymore. I hit a point where I had enough savings and buffer that -- unless it's an unusual purchase -- I don't have to think about it. This doesn't mean I don't have a budget, but it only needs to be updated a few times a year to check that things are still good. As for daily activity, I simply live in a way that my spending is well within my means. (And I do realize that some folks can only stay on course by tracking every dollar, so this might never be for them.)
1. You will be paying somebody a monthly payment for your living environment. There is no option to pay cash for that in a quick time span, unlike buying an affordable car with cash.
2. A mortgage is unique. Basically, no other form of debt preserves and even eventually increases your net worth, in and of itself.
3. Biblical principles don't always = overarching uniform commands.
By the time someone saves up enough to buy the house the house has increased in price where they still can't afford it. People would constantly be chasing the price without a mortgage and never actually get there.
I do not think so. If you saved up to buy a house and were saving to buy a 300k house and saved the 300k, you are still in a better position than not having that money.
Adding to insideout 's point.... worst case you end up having to agree of a mortgage of around 10 to 20 something thousand dollars. Which unless you live in a third world country yes you'll be able to pay that off pretty damn fast
That's only a recent phenomenon. Historically prices increase 3% per year. The last couple years are an anomaly
@@fusionreaper I would not call that an anomaly I would call that an idiot who can't even locate his own pants zipper by himself to properly prep to piss nor make up his mind which ghost he wants to shake hands with who can't even read a damn teleprompter
Would a buffer be something that is OK for things that you budget for that have inconsistent amounts? For example, water bill is typically around $280 every three months. This bill came and was $330! It was unexpected so would a buffer be necessary for it?
@5:04 "stupid"... great Pastor
I like this answer from Dave and it is actually consistent with biblical principles. The Bible is anti-slavery (all humans made in the image of God), but also exists in the real world where the practice is impossible to stamp out in many cultures and so also gives out principles for handling slavery in a more godly way.
I finance vehicles because I keep them at least 6-8 years. The depreciation doesn’t affect me at all. Most of the time I do pay them off early though
Good work
Buffer, is necessary, you dont want to see a 0 in the bank account. If you follow the budget correctly (which is not easy) then that $50 buffer is the new $0.
But you have to get used to leaving half your mortgage payment because pay day is every 2 weeks and the autopay on the 15th so you have to budget to ensure it is their before that date. The struggle is real.
“I’m a small town pastor…so I know more than everyone…as a small town pastor…I like pointing out things I find inconsistent…because as a small town pastor…did I mention I’m a small town pastor…”
I don't see what's wrong with someone calling in and asking a very legitimate question.
@@andrewmarshall7569 It's just the REPETITION, as if he wasn't heard the first 4 or 5 times!
He needs to repeat it over and over because he doesn't believe it either.
Wow. He's a small town pastor? I didn't know. I wish he would have said something! It's too bad he didn't say anything because it's completely relevant to the call!
@@JustinCase780 I would love to see you call into a radio show so we can pick apart each and every word you have to say. Maybe the pastor was nervous. You are not being kind in this instance, and nothing the pastor said was negative.
It’s worth adding that simply living by biblical principles, though wise, is not the fulfillment of their purpose. The wisdom is a gift from a holy, fearsome, living God who in his love made a way for us to be saved from wrath by his son Jesus. If I have no debts to man, but my incalculable debt to God isn’t paid, all is lost.
Consumer debt is bad.
So I've had my mortgage for 22 years, I bought it with $20,000 down for $115,000 .
I filed bankruptcy in 2017, the balance was 85,000. You tell me how it's possible that I still owe $90,000 on my loan even since October I've been paying on it for 7 months now and it hasn't gone down at all. The first thing I'm behind and since I've got off my forbearance and I've been paying it they've been back dating it a year so I can't even get any credit I can't get an equity loan or anything they're ruining my credit😢.
Would you happen to know the best negotiable instruments and you didn't use to pay off the balance and get settled once and for all??
I saved up for 6 years to buy a house. It wasn't a $400k house, but it is a house and its fully paid off and it's MINE.
I make $32k a year and bought the house in 2023, so everyone whining about "you cant do that in todays society" are just negative and living above their means.
Most people don't live in the middle of nowhere where houses can be found that cheap.
@@joejohn. Do you read the drivle you post? You're too busy coming up with excuses and whining to be able to do anything about it, sad...
@@noxproductions6851 What was your purchase price then? You grossed $192k over 6 years and that let you buy in cash. The vast majority of areas with jobs in this country simply do not have housing that dirt cheap in 2023.
@joejohn. boo hoo, you are still MAKING EXCUSES and, furthermore, trying to justify that stance.
@@noxproductions6851 Another reply without substance, cool
Also, when the alternative to borrowing is renting, that’s not necessarily any better.
What you don’t want to do is to buy more house than you can afford.
So kids, the moral of the story is if you have $100 million dollars, you don't have to borrow anything from anyone!
Only $1 million...
I spend April's earned income in June. This is separate from having the 6 month emergency fund.
Who cares?
@@matthewphillips5483 if you actually watched to the end of the video you would know why this is relevant.
@@Raegoul You came here looking for validation (which is sad in itself) but no one cares, dude.
*I love the grounded reality of this channel!!!*
Retirement took a toll on my finances, but with my involvement in the digital market, $27,000 weekly returns has been life changing. AWESOME GOD😊🎉😊❤
I'm in a similar situation where should I look to increase income? Do you have any advice? What did you do ? Thank you
Thanks to my co-worker (Alex) who suggested Ms Maria Angelina Alexander.
She's a licensed broker in the states 🇺🇸
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My condo. The one I own. I purchased for cash in 2010. I never had a mortgage on it. Same for the cars my wife and I own. All cash. We have politely told the car salesman when they try to get on a loan. We decline it. They get pissed. We have even walked out of a car negotiation over price, and the fact they didn't know how to do a sale with cash...no loan.
It is difficult to pay with cash. They want your financing. In order to negotiate you almost have to allow the financing. Just make sure you pay off the loan then next day. I reme bae those days when cash was king.
Don’t be in debt.
A well thought out home purchase using a mortgage is one of the best ways the average person has to build wealth. I have been pushing my children to buy a home for the last 25 years. Now, at 40 and 41 years of age, they are both still renting and they are both being pushed out of their rental homes because the owners want to sell. Because of the drastic price increases of homes in the area and the price increases in rentals they are priced out of the market. I suppose they can find a bridge to sleep under.
So you are in favor of using debt to build wealth? Cool.
@@matthewphillips5483 In limited cases, yes. But debt is a dangerous double edged sword and extreme caution must be exercised when considering using it.
You're paying rent and flushing that, what would otherwise be your own equity in home ownership, down a toilet. Especially long-term. Short-term I can see the argument for renting. Say 5 years or so. But 15, 20 years? You really should be investing in your own home equity.
@@AnAZPatriot This is a stupid myth that has been debunked over and over again. Shelter is always going to cost you money whether you buy or rent. In pretty much every major metro now, the cost to buy exceeds the cost to rent by a wide margin. Placing what would be your down payment, closing costs, and difference between mortgage payment and rent into an index fund based on the SP500 will yield you as much or more than any equity you will likely get into your home. Renters don't have to put a new roof on their home, repair the HVAC, replace the water heater, etc. All of that money can go into the market.
In California metro areas, the average family only stayed in their home less than 5 years (this trend dates back as least as far as 2019). This means home buyers are literally "throwing money down the drain" with closing costs, etc. Those that stay, many end up with a HELOC or do a cash out refi that cannibalizes equity, raises payments, and sometimes resets the clock on the mortgage.
Your counter will likely be "most renters lack the self discipline to invest the difference in the market" which is true. What is also true is that most home buyers don't pay off their home nor stay out of debt either. Most "homeowners" will never see the end of a mortgage in their lifetime due to bad financial decisions.
I'm not anti owning a home. I'm anti-mortgage. Rent + invest in the markets until your investments can buy you a home in cash. It doesn't take any longer than (and is actually quicker than) waiting to pay off the mortgage with the bank. Instant gratification culture is destroying everyone.
@@matthewphillips5483 Provably false. 40% of homeowners pay off their mortgages sometime in their lifetime (citation: Bloomberg, Nasdaq, Axios). What percentage of renters invest in the S&P?
I rest my case.
He also tells people to sometime borrow to pay taxes, or to pay off a car loan, to sell it.
What Dave says to do that it's not like you are borrowing more money you're moving your debt around to where it's easier to pay. If you owe the IRS money then getting a loan from a credit union to cover it makes the IRS off your back but you still owe the same amount of money.
That's converting one type of debt for another rather than going into debt. If you are in debt to the tax man, that's a really bad debt. Converting that to a debt to a credit union is a great improvement. Converting a large car loan and an expensive car into a small credit union loan and a cheap car is also a great improvement.
@@jackiechoate6163 You can setup a payment plan with the IRS. Interest will still be cheaper then taking a loan.
But he hates when people do debt consolidation to move debt around.
But to move IRS debt, is OK?
@@thomasdalton1508 You can set up payment plans with the IRS.
If you have a $2,500 loan at 3% and a $30,000 loan at 24% pay off the little one first. *sarcasm*
As Dave says, cash is king, buying a good home justifies debt, the home goes up in value, and can stabilize your expenses, while still caring for yourself and family.
Church Hill mortgage pays Dave Ramsey millions of dollars a year to advertise getting a mortgage. It's nothing personal people It's JUST BUSINESS!
DR is an uber grifter.
I disagree with him on the buffer. I feel like it needs to be the size of your largest auto payment. Then you are covered should they draw it a day early for a holiday or a weekend, or whatever. It should never be looked at, much like an emergency fund, unless it is needed. Not only for auto pay, but even for things that make sense. Let's say your grocery store has a huge meat sale, but it isn't in your budget to spend money on 2 months worth of meat, even though that two months worth today to save you needing to buy any meat next month and cost you less money. I personally never have less than $5000 in my checking, so i never need to worry about it, but I'm also much further on in the process than most, but an extra $1000 could save you more, or cover you when you do slip into old habits.
A buffer of an entire month's worth of money means that if there's a problem with your employer's pay system, you're still ready for your bills to come in.
@@pvtbuddie no, a months worth of expenses means you are prepared for an actual emergency rather than the risky $1000 that, in this day and age, doesn't cover much of a financial mess
@@JasonGroom : A month's worth of spending money means staying a month ahead on your spending money. That's not savings, or an emergency fund, since it's there for a specific types of contingencies that should be ballanced out, hopefully, within the next month to six weeks.
Also, whatever you think of Dave's advice, it's intended for people who have found themselves to be, and to have been, burried under debt and _without_ any emergency fund. And $1000 will still pay for most of the emergencies that get put on credit and set people back. Fix that one part that broke on the car, replace the washer with another used one, etc. Then you rebuild it, and go back to your snowball. Myself, I would say to keep adding $50 to that fund every month, or at least 1/10th of what's available after your necessary monthly spending, along with paying down your debts, but, thankfully, I've also never been under much unplanned debt, or stuck for long at minimum payments.
Trust us Zachary, you arent the only one with a problem with the $1,000 emergency fund since the 90s. But we can still agree with majority of the Ramsey principles.
I like your comment and that's how more people should be.
You don't have to agree with everything. I certainly don't, but overall, I find Ramsey's financial principles a good way to live.
What bugs me are those people who follow Dave and comment negatively on every video because they clearly disagree with most or all Dave is about. To them I say, you should follow someone you agree with. Shaking my head at these people!
@@GAFB1122 this is spot on. And rlly this is the problem with societies view on most things in life nowadays
Need about 5000, then start on the 3 months salary savings, then 6 months, but usually something happens and you must pay for it.
A minimum of $2500 emergency fund is necessary in 2024. No discussion.
@@pamwilliams6630 id prob side with the comment below $2kish. That covers car issues or a next day play ticket if there is an emergency.
Not sure if i fall under this situation or not. My house is paid for i have only one debt i did buy a Tesla last year i put 20K down i was spending $750 a month on gas now i spend $500 on car payment probably the dumbest thing i have done. but i also put %20 into my 401k
Don't play gotcha with Dave.
Wasnt rlly a gotcha. it was a very respectful question
@@Shortballa11 you're not allowed to question Dave 😤 😂
Dave it like a parent to a little child: because I said so.
The used car market in the uk is a lot different than what ramsay would say, i bought by car for 6k 5 years ago and I could sell it for 6k if i wanted now lol
He Should have went into Dave character contradictions that's where the gold is.
Dave Says: If you owe it, pay it
Dave Does: Declare bankruptcy
Days Says: Eagle that doesn't leave the nest is a turkey
Dave does: my adult daughter still works for me
Dave says: you need to find work outside the home to find purpose and contribute to society
Dave does: my wife never had a job even after all 3 kids left home for college
@@siva47931 Also the Golden rule treat people like you wanna be treated. Runs his business like a tyrant.
Single moms are heros. Fires a women who wasn't married and got pregnant.
@@siva47931bro you’re reaching so hard. Dave declared bankruptcy 30 years ago. And he has always supported the idea of being a stay at home moms when it works financially. Swing and a miss
@@siva47931I have to correct you. Sure one daughter is an on air personality/author who uses her dads name to sell books but let’s not forget his other daughter runs his charity, his son runs his business, and his son in law runs his real estate business….but I’m sure it’s a coincidence and they were just the best people for the jobs.
The caller is a character 🤣
House = equity. Even if you owe and you sell it, you get a significant amount in return.
Couple years ago this was a windfall.
It also equals a relatively secure environment and one which you can tailor to your own liking. Added bonus is that mortgage repayments fall relative to income whereas rents rise.
is there a video that does a deep dive on dave's study of the 10,000 millionaires? Heard him mention it for years but never read details on it or seen a video about it.
Dave is not a Christian.
Next, you will say he is not a sinner...
I bought a house I could afford but didn’t have enough for a down payment. I got owner financing with a lower rate than what the bank could give me and no PMI. Today that house is worth double. If I listened to Dave’s advice I would have never got that home today.
Dave Ramsey is rich 🤑 selling you his books and tape sets 😂feeding off the poor people
Hey, if you don't want it, don't buy it.
@@insideoutsideupsidedown2218 You keep making him rich buddy lol 😂
Ramsey employs over 1000 people and it has nothing to do with books.
Love this!
One consideration is earn 30% - 50% pa. from investment in order to buy a house in 5 years. A house MAY be an investment using leverage (mortgage) requires risk management skills. So either payoff in 7 years or pay cash from savings from high investment gains.
The verse he is referencing is the borrower is servant to the lender, not slave.
Haven't researched it but I suspect it says slave in some versions of the Bible and servant in others
Servant or slave in this context does not matter they're close enough to being the same in that yes they can legally come after you and cause the administration of punishment upon you if you don't pay back the debt
And the feeling of slavery in this case is not too far off
Ol, but I don't want to serve Capital One either.
When you're in Baby Step 2, your buffer should be the $1000. Also, dont pay extra on the credit cards until AFTER the month is over. If i had budgeted $500 over to pay for a credit card in August, I'm not paying that $500 until September.
We put x amount per month into a budget fund for insurance. Them when the bill is due the money is there.