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In this video, a caller hits up Dave Ramsey for advice on how to deal with a family situation in which her husband’s brother is draining their mom financially because he has bum habits. If you don’t know who Dave Ramsey is, check out his YouTube channel on the link below. He’s a millionaire with a no-nonsense attitude about debt. I’ve been checking his work out heavily over the last few days on building wealth and have been making progress already.
Here are a few tips I picked up.
- CREDIT CARDS: Stop using your credit card – It’s very difficult to build wealth when you’re always giving away your money.
- HOME OWNERSHIP: Don’t rush to buy a house – A lot of people can’t afford them anyway and there’s nothing wrong with renting. If you do get a house, don’t take out anything longer than a 15 year mortgage and be sure to put a 20% down payment.
- RENT: Your rent should not be more than 1/4 of your take home income – If it is, it’s time to move to a cheaper location.
- RETIREMENT: Retirement should be priority and there’s no excuse for being broke if you’ve worked your entire life – Commit to saving at least $100/mo in your Roth IRA.
- SAVING: Save. Save. Save. – The goal should be to spend less and save more. You should be saving at least 15% of your annual income.
- STUDENT LOANS: Stay away from student loans – They’re almost impossible to pay off.
- CAR LOANS: Car loan payments kill your wealth because you’re giving away your income – Consider buying a cash car to begin with or if you are over your head in debt on your car loan, it may be time to sell it.
- BANKING: Chose the local credit union over the big banks – they’re more personal and can do more for you on the local level.
- TV: Turn the TV off and focus your energy on things that matter – Like getting out of debt.
- EMERGENCY FUND: Got at least $1000 in your emergency fund for a rainy day? – If not start building one.
- PLAN: List out your income and expenses to see where your money is going – Cut back on things you don’t need (fast food, going out, clothes shopping) until you get out of debt.
- NO: Learn how to tell yourself no and other people no – Period.
- SELL THINGS: Got electronics, jewelry, DVDs, clothes and other valuables laying around the house? – Sell them for cash and use that money to pay off debt.
Source: Dave Ramsey YouTube
-Farlin Ave (@farlinave)
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