Search

How to Get Out of Debt & Save Money

  • Thread starter 15Katey
  • Start date
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #1
I've written a lot of articles over the years about getting and staying out of debt as well as how to save money the most efficient and effective ways. Since those articles were scattered around various web pages, I thought I'd collect them all and post them right here in this one thread. If you've got something to add to what you read below, I welcome you to do so. I love getting other people's opinions on topics like this. Thanks!
 
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #2

How Do I Get Out of Debt?​

About 20 years ago, I held a lot of debt. Perhaps it wasn't much compared to today's standards, but to me, it was a lot. I owed on student loans from college and I had a huge balance on my credit card. I never actually owned more than one credit card, which was smart, but the one I had was terrible for me. I purchased a used car using its cash advance feature and I think I may have put a semester or two worth of college tuition on it. Needless to say, the balance was in the multiples of thousands. Beyond that and after my used car died, I took a loan to buy a brand new one. You know, I needed a new car because I was just so sick and tired of having to deal with a used one. Classic way of thinking for those who borrow money to live.

Holding this type of debt made me feel very uncomfortable and nervous, as I simply wasn't the type of person to live the way I was living. The money I owed gnawed at me day and night and I can't remember a time when I wasn't thinking about what I had to do to get out from under it. Eventually, I paid everything off and never looked back. The process wasn't easy though, but after getting my head straight, I did what needed to be done.

The question is, what did I do to get rid of the debt that I held all those years ago? I can remember thinking about ways to do it. The first idea I came up with was to make more money. That was the most obvious. If I could only make a few more dollars an hour or a few extra thousand dollars a year, I'd be free and clear. I'd use that money to pay down what I owed and everything would be fine. I actually did make more money through the years, but it did very little to help my situation. What ended up happening was I spent anything extra I made. It was like the more I made, the more that left my pocket. After a while, I realized that my income wasn't the problem.

Some of my other ideas were, I'm ashamed to say, just terrible. I thought about trying to meet someone who was rich to start a relationship with. If I could just get close enough, perhaps they could help me pay off my debt. That was stupid, I know. It didn't work in the least. After that, I wondered if there were any government programs out there that would help someone like me. I began asking around and doing research to see if someone at either the state or federal level would lead me to some free money. I didn't get very far with that either. It was like every time I tried to get something I didn't earn myself, someone would slam a door in my face. It wasn't until I realized that it was me who was the problem that I did something about my issue. Do you want to know what I ultimately used as a solution? Here it is:

I stopped spending money frivolously and every extra cent I had, I put towards what I owed.

I can hear you now. "Well, that's pretty obvious. Anyone can do that!" Oh can they? Would you like to know exactly how I reduced my spending? Yes, paying down the debt is rather simple; it's actually the reducing the spending to get the money to do that that's the trouble. At the time, I was living a great life. I was very social and owned nice things. I looked good, dressed well, and drove a nice car. The problem was, everything I had or did was on the back of what I owed. Simply put, I had to reduce all aspects of my quality of life in order to save the money I needed. I knew that was going to be a massive internal battle because changing one's behavior and entire attitude towards money is never easy.

The most difficult thing I did was sell the car. I knew that needed to be done. I actually still owed money on it after I sold it and needed to pay that off, but once I did that, I was free to purchase a used car with cash. I got over myself. I drove a car that was like the one I owned while I was in college. I didn't look good doing it, but at least it was honest and what I could afford.

I also stopped going out - completely. My social life was over. From that point on, I totally stopped spending money on drinks and food that wasn't consumed inside my apartment. I didn't visit bars, clubs, or restaurants. That was a huge money saver. I had never realized how expensive it was and how much money I wasted on going out. It was ridiculous. In the place of going out with friends to have fun, I read used books I got for free from the library or bought for a few dollars from my local used book store. I read a lot in those days.

I moved out of my apartment when my lease was up and I moved into a less expensive apartment in an area of town that wasn't as nice as the one I had just left. It wasn't fun, but it was what I needed to do. I saved a good amount of money doing that.

I also ate rice, beans, and ketchup for months and months. I lived like a college student. That combination of ingredients and I became best friends. I lost about 30 pounds doing that, but boy did I save a lot of money resisting the temptation of purchasing expensive food at the grocery store. I never quite noticed how expensive grocery store shopping could be. After I calculated my expenses, that was one of the first cuts I made. It was well worth it.

While the steps I took were challenging to execute, they weren't nearly as challenging as they might have been if I were in a relationship and living with someone. I could only imagine the complaining that would have occurred as I sold my car, stopped going out, increased my reading, moved into a lousy apartment, and began eating baked beans every night for dinner. This actually leads me to a final point. I got out of debt fairly quickly after I changed my lifestyle for the better. I felt great when the last dime was paid off, but things wouldn't have gone nearly as smoothly had I been married or in a serious relationship with someone. Spouses and partners don't always see eye to eye when it comes to finances, so if there's trouble getting out of debt while attached to a certain person, you may want to look at what caused your increase in debt in the first place. Perhaps it was them. Yes, you may have come into the relationship with problems, but if who you're with is resistant to change for the better, they likely exacerbated the problem. This is an entirely different type of situation that I'll discuss in a later post. For now, just know that in order to get out of debt, you'll likely need to live like a pauper while you get your life in order.
 
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #3

Under 30 Years Old with $1,000,000 in Debt​

I just watched a Dave Ramsey video where the caller indicated that she and her new husband were in nearly $1,000,000 of debt. She was 29 and he was 32. Their mortgage was around $250,000, their student loans were approximately $300,000, their car loans were about $30,000, and the rest were credit cards and personal loans. I'm not even sure what personal loans means. Did these people go to a bank and take out personal loans? Do banks even do that? I'm sure they do. They'll lend to pretty much anyone these days.

The caller said that she was scared and ashamed. They were trying to avoid filing for bankruptcy. Again, late twenties and early thirties. Both she and her new husband had advanced degrees and worked for the government. He holds an MBA and she a degree in Social something. She said that the two of them had been married for a few years, which means that they were in financial trouble before they met. Can you imagine meeting someone who holds over $150,000 in student debt and then choosing to marry them? Who does this? More importantly, who borrows over $150,000 to go to college? It was actually her who held most of the college debt and him most of the credit card debt. She said that both of them exhibited bad judgement. Ya think? I bet they weren't thinking about how bad their judgement was when they were experiencing the high of borrowing all that money.

She wanted to know what to do. That they were at the end of their rope. As I was listening to this, I wondered if they felt like they were at the end of their rope because they were being cut off from borrowing or were ready to default on that borrowing. I bet if they won the lottery, they wouldn't feel bad at all; that they'd merely go out shopping again. So really, I don't think there was any mental awakening or anything like that. It was more likely the pressure of not making enough money to cover their bills. This is actually a variant of the dreaded rat race. Earn and spend. Earn and spend. Keep going until you can't anymore. Until someone won't let you spend. And then, call a radio show to ask for advice. Ask someone else to do the mental work to get them out of their bind. Why didn't either of them ask for advice when she was signing the paperwork to borrow hundreds of thousands of dollars to get a junk degree? Or while he was putting tens of thousands of dollars on a credit card? Why not then? Why only now? It seems like the music has stopped and there were no chairs left.

There's a section in Dave's book, The Total Money Makeover, that's called The Big Challenge: Find a Mirror. He actually alluded to this section in the video. He said what these two were facing wasn't a math problem in the least, but a personal one. In the book he says that successful personal finance is 80% behavioral and 20% head knowledge. Basically, that if someone who knows what they're doing puts you on a plan, if you follow that plan like a lumbering idiot and without wavering, you should see success in the future. Being successful with finances doesn't take a lot of brain power. The only brain power you'll need is to know when to avoid doing dumb things. Borrowing hundreds of thousands of dollars for college is dumb. Having over $30,000 in car loans is dumb. Having hundreds of thousands of dollars in credit card bills is dumb. Extraordinarily dumb. There's no other way to describe it.

Dave says that the only thing standing in the way of these two getting out of the trouble they're in is themselves. That if they follow his plan and eat rice and beans every day for the next three years, they'll fix their situation. That it won't be easy and they'll hate every minute of it, but since they're the ones who got themselves into this mess, they'll have to be the ones to get themselves out. You should have heard the girl sighing on the other end of the phone. She didn't like hearing any of this at all. She loved the fact that she and her husband spent more by the time they hit their late twenties than most retired couples spend, ever. She hated the fact that she'd have to suffer through the next few years cleaning up the mess they created. As if it was someone else's problem. As if she should be able to simply walk away.

Dave told her that while the next few years would be tough, it would be good for them. Personally, I think the time will introduce them to a few concepts; responsibility, accountability, and restraint. I guess, for some people, there's no other way to teach them about these things. They need to hit rock bottom.

Here's a question for you: what's the most you've ever been in debt? Have you ever felt like you'd never get out of it? Does money stress you out? Do you feel as though you're owned by bad decisions you may have made in the past? I'd love to hear your story (or the story of someone you know).
 
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #4

Why Do People Do Stupid Things with Money?​

I have been asking myself this question for over 20 years. Back when I was in college, I was what we like to refer to as an idiot. Even before I left for college, I was an idiot. Intellectually speaking, I was actually pretty smart, but when it came to money, I had a hole in my pocket about the size of the Grand Canyon. Any amount of money I got my hands on burned its way right though. And quickly! I could hardly hold on to a red cent. I'm not sure why this was the case with me. Perhaps there was just too much temptation out there. There was, and still is, a lot of great stuff to buy.

My spending habits back then didn't do me any favors for the next few years. It actually took a wake up call to set me straight. After college and after I managed to somehow rent my own apartment, I called my mother to see if she could help me out financially. It didn't take long for her to tell me that I was fully on my own and for me to "figure it out." That was hard to hear. That meant that I'd have to grow up and begin paying off my student debt and $7,000 worth of credit card bills. I didn't like the situation at all. With only a few hundred dollars to my name and groceries, rent, gasoline, car insurance, and all the rest to pay for, I'd say I was screwed.

Luckily a friend of mine came to the rescue and moved in to my apartment with me. He paid for the next month's rent, which gave me the wiggle room to focus on getting a job. I did manage to land a job and for the next year, I worked my butt off. I paid off all my bills and walked away from that experience $15,000 in the black. And that was the last time in my life that I had no money. If it wasn't for my friend who needed an apartment, I would have been thrown out. It's pretty pathetic when a healthy and college educated young person become homeless. There's no reason for it.

Today, I am as frugal as frugal can be. I am so careful with my money that it actually makes friends and family angry. When they ask me to do things, I tell them that I'm too busy working. In truth, I am. I work a lot. I work with the goal of financial freedom and independence in mind. I've achieved those two things long ago, but I keep my foot on the gas just to make sure I stay that way. My attitude toward money annoys people and I don't know why. Perhaps it's because every time they think of how secure I am, it forces them to look in the mirror. They most likely don't like what they see.

I think it takes going broke to wake up and see the financial light. Many people just don't get it. Young people certainly don't get it, but I can't really blame them. They see the world through rose colored glasses. What they don't understand is that "stuff" can happen. Getting married can happen and having kids can happen. Getting sick can happen and wanting to buy something large and important can happen. There are many emergencies that can suck up your meager savings faster than a Hoover. To me, the biggest financial mistakes someone can make in their life are as follows:

- Getting married to the wrong person.
- Having children.
- Expensive pets.
- Buying a house that's too large for your needs.
- Living in an expensive area.
- Keeping up with the Joneses.
- Starting a business with no experience.
- Student debt.
- Stupid business idea.
- Buying a brand new car.
- Smart phone, cable, HBO, gym memberships, etc...
- Credit cards.
- Vacations.
- Home equity loans.
- Lack of saving.
- Lack of investing.
- Not having financial goals.

You might look at that list and say, "Yeah, but those are the things most of us do every day. It's called living." And I'd respond, "Sure, go ahead then. Enjoy. Just make sure to look around once in a while to see how screwed most of society is." When you plop yourself in a group of like minded individuals, you can easily become just as irresponsible as they are. If that makes you feel better, then so be it.

I was watching Dave Ramsey on YouTube the other day when a high school student called in for advice. He mentioned that he had recently been accepted into the University of California at Santa Barbara and that he had managed to save just about $40,000 for college already. Dave congratulated him and asked why he was calling. The kid wanted to know if it was a good idea to take out loans for the remaining cost of his education. Dave asked if California had community colleges. The kid said yes. "Well then, there's your answer." The kid had no idea what Dave was talking about.

Basically, here's how it goes. If you don't have the full amount for college saved in cash, you don't go. It really is that simple. You don't take out loans to go to college. I took out loans back when I was younger and it was the dumbest thing I ever did. My loans weren't large and if I had simply worked a bit harder at a local job, I could have avoided them altogether.

If you've got a rich grandfather who wants to pay for your education, then go ahead and enjoy. Just don't get used to the lifestyle because it's deceiving. Otherwise, work and save your money for a year after high school and then enroll in your local community college. Go there for two years. There's no sense in spending thousands of dollars on a basic Algebra class and the like when it only costs a few hundred at a local school. While you're commuting, keep saving your money. When you've got enough to transfer into a four year school, that's when you go. Not a day before. This is such a simple concept, but hardly anyone adheres to it. They act as if going to college is some sort of a right. It's not. There are plenty of people who are just taking up space across the various universities we have in the United States. They shouldn't be there. They've got no business being there. And if your reply is, "But what about the college experience?" Grow up.

Another great tip is to stop looking at schools you can't afford. Just because some fool will give another fool a loan to buy a Mercedes, doesn't mean the Mercedes should be purchased. If you've got parents who aren't wealthy, guess what? You're going to a state school. Even if your parents have some money, you should still go to a state school. Those schools are subsidized. Take full advantage of the cost savings.

If I were hiring for my business and someone sent in a resume and cover letter that explained how frugal they were by following the advice I just laid out above, I'd hire them in a snap. I'd definitely hire them over someone who went to a fancy university. When I look at people, I look at how grounded they are. I don't care if you're a genius, if I can't identify with your spending habits and your outlook on the world, I don't want to identify with you at all. You have to have shown some sort of struggle and some sort of win. I like those sorts of things. My mother used to call that "grit."

Here are a few more pieces of advice. I know I can be sort of unrealistic at times, but if you're in the hole right now, some of these things may help. Yes, you won't like any of them because none of them are fun, but then again, you aren't reading this post because you're looking for a good time.

Getting Married to the Wrong Person

Probably the worst thing you can do in your entire life. I've got example after example of spouses taking half of what was never theirs after they divorce their unsuspecting tool. The divorce lawyers take the other half. Ladies and gentlemen, be very careful out there. Run a credit report on the person you intend to marry and ask for references. Find ex-girlfriends and ex-boyfriends. Interrogate them. You think I'm kidding. If your future spouse fights you on this, you have to wonder why. Also, date them for 10-15 years before marrying them. If they can't handle that, then they just did you a favor. And if you discover they're getting married because they want to have children immediately, don't walk, run the other way. They're using you. Nothing else. You can't expect them to stick around for very long.

Having Children

Which brings me to my next point. If you don't have any money, don't have kids. Again, this isn't a difficult concept to grasp. A few years ago, I spoke with one of the poorest friends I have. I asked why they decided to have children when they clearly weren't ready for them. Do you want to know their response? "When is anyone ever really ready for kids?" I nearly fell out of my chair. I'll tell you when you're ready. When you've been married to the person you love for at least five years. When you've saved up enough money to deal with almost any eventuality. When you've purchased and paid off a house. When you have stable jobs. When you're completely sane and have no mental issues. When you're a good person. Otherwise, do the world a favor and don't breed.

Expensive Pets

This one is easy. If you're in debt even a smidge, you can't have a pet. Not even a gold fish. Sorry.

Buying a House You Can't Afford

If you enjoy the prospect of being foreclosed on and divorced, go ahead and buy yourself a nice big house. All the neighbors will be thoroughly impressed by your financial prowess. And by all means, if you want to find yourself in a mental hospital for stress related symptoms as well as driving around in search for the nearest cliff to jump off of, listen to your spouse when he or she says, "But we need this house because it has enough bedrooms for our children." Ever hear of bunk beds?

Living in an Expensive Area

It's up to you, if you enjoy paying taxes for other people's children to go to school. Not my cup of tea, but hey, to each their own.

Keeping Up With the Joneses

Don't be an idiot. The Joneses don't even like you. They never will.

No Business Experience/Stupid Business Ideas

I'll lump these two together because they're similar to one another. Let me ask you something; is the prospect of money leaking out of your bank account like it's leaking through a sieve attractive to you? Do you want to take a loan from a bank and have no idea how to pay that loan back? If either of these things excite you, then you should definitely start a business that you don't know the least about. And by all means, open another coffee shop. Downtown needs one of those. No, wait - a used book store. Even better, a smoothie shop.

I talk to people about business all the time. I tell them these negative things and depress them beyond belief. When they ask when they should start a business then, I tell them after they've worked in the industry for at least five years. After they've watched their bosses make good money. After they've climbed the ranks. After they've approached their boss to ask about how to become a partner or if they can buy him or her out. The last thing a person needs to do is to start a bad and unnecessary business when they have no experience in that line of work. There's a reason pretty much ALL businesses go out of business. Because people dream too much. Business isn't attractive. It's not a way to get out of working a real job. It's labor and it can be ugly.

Student Debt

I discussed this above.

Buying a New Car

Who are you, Mr. Got Rocks? Have you been working all your life and have you finally retired with way too much money in the bank? Are you a careful spender? Do you have investment accounts that are bursting at the seams? Are you completely out of debt? Have you paid off your mortgage? If so, splurge on a new car. If not, start looking through the papers. Buying a brand new car is one of the biggest wastes of money there is. Everyone knows this and has known this forever.

Overspending on Things You Don't Need

You know, there was a time in this world when people didn't have a $500 device in their pocket that cost them $80 per month to keep active. And when people didn't have access to 79 channels on TV. And when they didn't have the internet. There was a time when people did push-ups in their basements. When they went jogging out on the road for free. People today spend far too much money on frivolous items and they know it. If you're one of those people who justify your spending by claiming that you need this or you need that, stop it. I suppose you could say that to someone who is younger than 25 years old, but as for the rest of us, we know better.

Credit Cards

Cut them up. Right now. Go in your wallet, pull them out, and cut them up. Pay them off and never apply for another credit card as long as you live. No matter how attractive these companies make their offers.

Vacations

Really? What ever happened to summer vacations that took an hour long car ride to get to? Disney World? Every year? The Bahamas? It's like people want to be poor. They just can't help themselves. Have you ever seen how many one year olds people drag to Disney World? It's unnerving. Like the kid is ever going to have any recollection of going there. C'mon.

I think I'll stop there. My fingers are getting tired. I'm sure you get what I'm trying to say here. Basically, don't succumb to the temptations and don't start telling yourself that you've got more money than you actually have. You don't have the money. Yes, someone may be willing to lend you the money, but that's not yours. It never was and it never will be. Think about it. A credit card company is willing to hand their money directly to a retailer for something you really don't need. You never even saw the money! And now you've got to pay it back with some crazy interest attached. That could likely take decades.

Alas...

The last thing you want to do is find yourself in a situation where you're being forced to spend money you don't have.

- I married him so now I have to go on a honeymoon we can't afford.

- I had the children, so now we need a house that has four bedrooms.

- I started the business, so now I'm forced to pay the loan back.

These are all horrible situations that a bit of foresight and prudence could have avoided. But really, watch out for that marriage thing. It can ruin and bankrupt an otherwise good person.
 
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #5

How Much Do I Need to Save for Retirement?​

Just the fact that you're looking at this page means you are on the right track. Believe it or not, no matter how many people preach about retirement savings, most people don't give the topic much thought at all. If I had to guess, I'd say a good majority of folks begin getting nervous around the 50 year mark. They look at their savings and wonder how they're going to live for the rest of their lives after they retire. I can tell you that turning 50 years old and just beginning to concern yourself with your retirement savings is a recipe for disaster. Whoever is in this situation is looking at many more working years than they had planned on. I knew one woman who was forced to work until she was 90 years old. Can you imagine that?

Required retirement savings can vary widely. If you're living in the center of NYC, San Fransisco, or Los Angeles, and have a lifestyle that costs tons of money, then you're most likely going to need a lot more savings than someone who is living alone in a shack in the mountains of Maine. The costs of living in these areas is like night and day. So while one person may require $75,000 per year to go on all their vacations and pay all their bills, another person may only require about $8,000 per year to hang around their shack. Some people want to purchase huge RVs to travel around the United States. Other people enjoy a simple day of fishing down at the stream. So really, there is no absolute rule that one must follow when it comes to retirement savings. You'll need as much as you need.

The question is though, how much do you need to save before you turn 65 years old to supply you with the necessary funds you'll need to survive every year thereafter? Here's the deal - it's called the 4% rule. Here's how it works:

Let's say you've managed to save up $1 million dollars by the time you turn 65 years old and retire. In your first year of retirement, you'd withdraw 4% of those investments and use them as funds for living. That would be $40,000. The next year, you'd withdraw 4% of your total investments, but this time, you'd account for inflation as well. So if inflation rose by 2%, you'd withdraw the $40,000 (if you had a remaining balance of $1 million) and you'd tack on 2% of the $40,000, which would be $800. So in that second year, you'd withdraw a total of $40,800 to live on. You would continue this every year thereafter.

Now, you may be asking yourself, "Won't I run out of money quickly if I do this? It seems like $40,000 is a big chunk of $1 million." I'd say, yes, it is. But you need to remember that your investments will continue to grow during your retirement. Any money you withdraw may be replaced during the year, so it's not a big deal. If your investments grow steadily, you may actually replace that $40,000 during the year, allowing you to start at the beginning every single year. If you follow this rule, it's highly probable that you won't exhaust your savings in your lifetime, if you assume that will be 30 additional years after the retirement age of 65.

Now, obviously this 4% rule can't apply to all situations every single year. If the market crashes, you'll need to adjust. If your expenses rise, you'll need to adjust. If you don't need to withdraw as much every year, then don't. This rule can seem somewhat rigid, but it's your job to figure it out as you go along. Don't stick to something like this if it's not working out perfectly. Make modifications.

Let's make a few calculations for different needs. Let's say you need a certain amount to live each year. I'll do the math below.

You need $10,000 per year to live. You'll need to save up $250,000. ($10,000 / 4% = $250,000)

You need $20,000 per year to live. You'll need to save up $500,000. ($20,000 / 4% = $500,000)

You need $30,000 per year to live. You'll need to save up $750,000. ($30,000 / 4% = $750,000)

You need $40,000 per year to live. You'll need to save up $1,000,000. ($40,000 / 4% = $1,000,000)

You need $50,000 per year to live. You'll need to save up $1,250,000. ($50,000 / 4% = $1,250,000)

What does all this tell you? It says that you'll need a lot more money than you thought you'd need to retire comfortably. If you take your age and look at your retirement savings, I have a feeling that you'll realize you're falling short. If this is the case, I advise you to take this issue seriously and to begin hustling in a big way. Also, you should never retire with a mortgage or any debt. Figure that out now too. Get completely out of debt before you turn 65. Don't make excuses for this. I can go on and on about this, but I'll spare you the agony of that. Let me just tell you that if you think you don't make enough money to get yourself out of debt and you've got a cell phone, drop the phone service. If you've got cable TV, get rid of it. If you eat fast food, stop. Drink coffee, you don't anymore. Again, I can go on and on, but I won't. Just look at all the areas you waste money in your life and change your behavior.

If you've got any questions about saving for retirement, please ask. I'd love to help.
 
15Katey

15Katey

Member
Joined
May 10, 2021
Messages
130
Reaction Score
0
Points
23
  • #6

70 Year Old Only Has $900 to Her Name​

I was just watching a Dave Ramsey video on Youtube where a retired 70 year old woman called into the show. She wanted advice on possibly financing the cost of a garage she'd like to have built on her property. She lives two hours west of Olympia, Washington in a small town called Ocean Shores. Basically, here's the rundown:

- She has a mortgage on a house that's worth $190,000.
- She owes $136,000 on the mortgage.
- She's living off her social security and teacher's pension of about $30,000 per year.
- She's got a total of $900 in the bank.

The caller would like to refinance her house to take $20,000 in equity to pay for the garage. The result would be that her property may be worth more with the garage built, but she'd also have a larger mortgage, not to mention higher property taxes.

Can you guess what Dave's response to this woman was? Yep, he said there is no way he was going to advise her to go further into debt, just to have a garage built. I'm assuming he considered the garage a want as opposed to a need. Personally, I consider the garage a want as well as an investment. If it raises the value of the property in a housing market that's climbing, that might be a good thing. If the market is falling though, it would be a terrible investment.

The real issue with this situation is that this retired woman is in no position to be investing in anything when she's barely scraping by and only has $900 in the bank. I think Dave was correct in putting the smack down on her.

I'm attaching the video below. Listen to the woman's voice closely at the beginning. Notice how she starts off justifying her terrible idea by saying the "small house has no garage" and that she's "wanted to build the garage for a long time." It's terrible how people talk themselves into terrible things, isn't it?

 
Top