The radio personality makes a solid, if seemingly obvious point.
In response to a listener’s request for advice, personal finance radio host Dave Ramsey shared some ideas.
The comments offered a way forward, but he didn’t mince words.
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“Dear Dave,” wrote the inquisitive listener, according to Ramsey’s account in KTAR News. “I’m thinking more seriously about buying a house in the next year or so. The housing market seems to have calmed down a bit, so I also plan on getting a secured credit card to help rebuild my credit score in the future.” . meanwhile.”
“I make $60,000 a year, and I have about $15,000 in debt and $3,100 in savings,” he added. “Is this a good idea and a good start to get my credit back and take control of my finances?”
He signed his name, simply, “Martin.”
“Dear Martin,” Ramsey replied. “In a word, no. I want you to be debt free before you buy a house. I also want you to have an emergency fund of three to six months of expenses set aside and have a down payment, preferably at least less than 20% so you can avoid having to pay for private mortgage insurance before you buy a home.”
Ramsey then told Martin about a guaranteed way to stay broke.
“Let me tell you a thing or two,” he wrote. “No. 1, your income is your most powerful wealth-building tool. If you don’t have any payments, you have the ability to build wealth and be generous. When you’re in debt, all you do is send money out the door to make payments “So being in debt is a guaranteed way to stay broke. That means getting a secured credit card isn’t a good idea either.”
Ramsey closed the answer with another piece of advice.
“Buying a house when you’re in debt and broke is a very bad idea, Martin,” he wrote. “It’s the fastest way I know of to turn something that should be a blessing into a financial and emotional curse.”
“Just be patient, get out of debt and save. Getting control of your finances is the smart thing to do before buying a home!”
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