The Rachel Cruze Show - How to Afford the Life You Really Want

Episode Date: June 12, 2023

Can you afford a home in this economy? You can . . . if you have a plan for your money (aka a budget). In this episode, I’ll share six reasons why I, a spender at heart, love my budget. Plus, we’ll go over the best time for you to buy a home and a few tips to make moving easier. What you get in this episode: ·      6 Reasons You Should Start a Budget Today ·      Moving Stressors No One Talks About (with George Kamel) ·      Is It Possible to Afford a Home in Our Economy? Helpful Resources: EveryDollar Christian Healthcare Ministries Carly Jean Los Angeles with code “Rachel”   Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries and Carly Jean Los Angeles.   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

budgeting puts you in control of your money. Budgeting gives you permission to spend and the ability to save. A budget is there to help you. It really is the foundation of making all of your money dreams come true. Hey guys, welcome to this episode of the Rachel Crewe Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about the best way to afford the life you want. I'll go over how it's possible to afford a home in today's economy.

then you'll hear a conversation I had with my friend and Ramsey personality, George Camel, on moving stressors that no one talks about. So George moved last year, and let's just say we have some things to say about it. But first, let's start with the most important next step to the life you want, the budgets. So here are six reasons why you should start a budget today. Take a listen. Now, before you assume that I just love budgeting and I've loved it my entire life, some of you have heard this before, but to remind you,

I was not a natural budgeter. No, budgeting was something that I really had to learn to love. I didn't think I would ever love it because actually I would cringe every time I had to do one. But the more I lived with it, the more it became a discipline in my life, the more I realized, oh my gosh, this is amazing. Like at first it kind of felt like a chore.

And every time again, I kind of felt like, oh, my gosh, do I really need to do this? But then I really started to see the benefits of budgeting and it won me over, y'all. and I have never looked back since. And Winston and I were not perfect when it comes to it, but we've pretty much done a budget every single month. Because now, again, the benefits so outweigh the work you put into it,

and you walk through life knowing, hey, I'm in control of my money, and it is so worth it. So I'll tell you the first big reason why you should start a monthly budget today is that budgeting is a plan for your money. Yep. And listen, we all make plans in life, don't we? I mean, whether it's career goals, life goals, health goals, travel goals, holiday goals.

Like, there's always something that you're looking at and you're like, yeah, I'm going to plan for that. I'm going to plan for what I'm going to wear to work. I'm going to plan my grocery shopping. I'm going to plan things out. So if you plan all these other areas of your life, why would you not plan for your money? And that is what a budget is.

A budget is a plan for your money. And when you make a budget, John Maxwell would say, you're telling your money where to go instead of wondering where it went. And personally, I have found that having categories, that I love, like travel, shopping, food, whatever it is, actually that money that is designated to those things goes further when I have a line item for them. So I can actually see, okay, this is the plan for food. Now I get to plan around this number, and it's really, really helpful. So again, budgeting

is just a plan for your money. Number two, budgeting puts you in control of your money. So there is so much in life, you guys, that we just cannot control. It is so. so hard. Things are constantly going on. But one thing you can control is where your money is going. And I know sometimes it can feel like your money is happening to you and it can feel kind of helpless, just watching your income, go in and out of your bank account every month. You're like, oh my gosh. Or, you know, debt is so normal. So you're used to like seeing payments go out all the time. But what's amazing is that when you have the ability to say, hey, I have obstacles in front of me, right? So whether it's things that you can control, things you can't

control. I'm going to sit down and actually plan for where my money's going. And I'm going to say, hey, where can I remove some of these obstacles to let my money go further, like paying off debt? So don't just sit back and blame, you know, where you are with your money on everything going around you because I know it can be really easy and people are in very different circumstances, but I'm telling you one common denominator I have found people that are winning with money is that they're intentional and they believe they can. And this is a process, you guys, slow and steady wins the race. So you can take power back. And listen, you're not going to solve all your money problems in five minutes or three weeks. But after you have a discipline of something

like budgeting and you have control over your income and you know where it's going, it's amazing because you can make different choices with your money. You can actually let it go further for you. So again, it puts you back in control of your money. It helps you create healthy boundaries around your spending. And it creates a level of freedom. because there is empowerment, you guys, in peace when it comes from knowing, hey, I have control over my money. And when I'm spending my money, I know what I'm spending it on. And that's what I found for me is it allows me to enjoy my spending, which is number three. Budgeting gives you permission to spend and the ability to save. So if you have ever felt guilty for a purchase, I'm right along with you where you go and you spend something and you're saying, oh my gosh, should I have bought that? like, is that okay? And again, this could be something small or it could be something big,

like, and, you know, a new car or a new mattress or something. And you're like, oh, my gosh. So, like, the range of spending is so big and that guilt can be there regardless of that range. So for me, what I have found is when I just sit back and I say, okay, I'm going to have a budget, I'm going to have a line item, and I'm actually going to spend exactly what I have planned, then I know I don't have to have guilt or shame over it. because I have a plan for it. It's already been planned out. Like, I have that amount of money to spend on clothes.

And it's great. So when I go and buy clothes, I don't feel bad about that. And so it's amazing where that guilt and shame can go away because I am a natural spender. And again, I used to worry so much when I would be spending, like, is this okay? Is it not?

And a budget gives you permission to spend, which is just absolutely powerful. And so it gives you permission, not just to spend, but also to save and to give. And again, you don't have to second guess anything, you really do have the ability to spend the money where you want to. And so, again, budgeting, it helps natural savers as well, because it does make you spend money. And savers, you need to spend some. And spenders, you need to save some money, not spend everything

you make. But again, a budget gives you those parameters. All right, number four, is that budgeting is how you reach your money goals, big and small. So if you want to pay off debt, if you want to save for a dream vacation, if you want to invest for the future, for retirement, a budget is there to help you. It really is the foundation of making all of your money dreams come true. And again, this is not an instant gratification thing. Okay, you're not relying on a credit card for that moment of satisfactory and feeling good. No, a budget is a practical, slow and steady way to ensure yourself closer to the experiences that you want out of life, the life you want to live. And so once you get into that habits, it's amazing when you have that discipline and you know,

okay, this is possible. I mean, it really does. It helps you. And Winston and I were building our house a few years ago, made that fool probably two years leading up to that. We were on such a, we were on a really tight budget and we were taking everything out of that budget and putting money to savings every single month. And it was the thing that was helping us, it was the roadmap leading us to our financial goals. So look at a budget as that as well. It's really helpful.

All right. Number five, budgeting is how you achieve financial peace. So as we have been talking about already, there are tons of things that you can't control in life. So it's really normal to feel overwhelmed. about the economy, the job market, the housing market, the government, inflation, all of these things. But achieving financial peace is all about controlling what you can control in spite of all the chaos going on in our world. And the seven baby steps are a proven way to take control of your money.

So in order to save up for emergencies, to pay off debt, to invest for the future, to give generously, you need it to be on a budget. And the baby steps make this a lot less intimidating and show you exactly how to tackle each of these aspects in the right order in the right way. So I'm going to leave a link in the description so you can learn more about the baby steps because, again, it's our proven plan that is so helpful. All right. Number six, budgeting creates accountability. And this is one thing that I, you know, did not expect to come from budgeting, but I very

much appreciate now that I'm budgeting is that you look at these numbers and you guys, it is accountability to see, okay, am I hitting my target? Like, am I staying within this range? And if you're married and you're budgeting with your spouse, that is instant accountability as well, because budgeting shows you and reveals where you spend your money, you know, where you're able to maybe cut back when it comes to expenses, all of that. And if you're single, it actually will tell you a lot about yourself. When you see, again, where your money's going, it's like, oh, wow, this is where I'm spending my money. Now, if you are single, bring somebody in to the budgeting process with you.

This is really helpful. So again, if you're married, this is your spouse, if you're single, get a friend. Because it shows you where you spend a lot of your money. So you're able to see that. And then you can say, hey, where do I want to cut back? And that is one thing I love about every dollar. This is the app that Winston and I use. We love it so much.

And we're able to both see our budgets on our phone. And we're like, hey, this is the budget. Here's transactions. Here's income coming in. Like, you're able to look and see it all together. So it makes it way more natural to talk about what we're seeing in our money habits, because everything is right there in the app. It's out there in the open.

Now, we also have budget meetings once a month where we talk about, hey, what's going on for the month, specific things that are going on this month, that were not going on last month, goals that we're trying to hit all of it. And so we're constantly in fluid conversation about it, which is really helpful. Now, again, we've been doing this for, you know,

over 12 years, Winston and I have. So our meetings are really fast. We basically just do it really quick, talk it out together. but again, I love it because budgeting creates instant accountability and natural closeness between you and your spouse. So it's really helpful to be on the same page. All right, you guys, I hope that this video gave you at least one reason to start a budget

today, because again, it's so great. And you can do anything for a month, so try it. It'll take about three months to get your budget right, but man, start it. Start it today. And if you realize I hate budgeting and I've been doing it for a year and I think it's stupid, You always have the ability to stop, but I promise I don't think you will. I think you will feel like I felt and that like tens of thousands of people that budget every day feel. Again, it's very helpful.

It's very empowering. Hey, guys, I'm so excited because my friend and co-host of the Ramsey Show and Smart Money Happy Hour, George Camels. We're here on another show that we normally do over there. Am I going to be on your show later? No promises. Oh. Well, anyways. Just kidding.

Mm-hmm. Mm-hmm. Feeling the love, George. Thanks. Okay, so it's summertime, which means it's moving season. People are always like, you know, even though the housing market's crazy, people are moving, right? So whether it's to get out of a state that they're in, they're changing because of jobs, family,

school systems, like whatever the case may be, it is a big deal that people move. And the summertime is usually, again, historically, the uptick season when it comes to housing. So I want to bring you on George because you and Whitney moved just last year. Yes. And so you guys went from like newly. You bought a town home, and then you guys just moved last year. To our first single family. Yes.

Oh, gosh. Okay, so tell me about, like, the process. Like, what caused you guys to move into what you moved in when you were newlyweds? And then the current move that you just made. So when we first got married, I had an apartment. So she moved into that apartment. Yeah. And then we began the process of saving.

And luckily, she's really much smarter than me. So she already, like, had no debt and had savings in the bank, which was just a gem. When you get married to someone like that, which it's fine if they have debt and you get married. But it's also even better when you don't have a pile of debt to clean up. That's great. So that propelled us into the home buying process faster. Okay. And so we decided she found this town home that was new construction, reasonably priced, and we went, okay, we get to choose all the finishes.

This will be fun. This is very exciting. And it was also very stressful. Very hard. New construction is a part-time job. Oh, yeah. And how quickly those upgrades. Upgrades from this color to that color of your handles will just jack up the price.

Because there's a base price with new construction. Yes. And that's basically like it's like it's a car, but it doesn't have electric windows. You have to manually roll. So there's all those upgrades that add up quickly. You're like, well, yeah, we want hardwoods. But you want level two hardwoods or level three hardwoods? Because only terrible people get level two hardwoods.

And so all of a sudden you just, it keeps ratcheting up. And so we really had to decide what are the must-haves versus what are the things we can compromise on. Yes. And I think that's great advice, regardless of whether it's a new build or not, because when we built our home, that's what we were experiencing too. I'm like, we had a hard budget. And it was like, you couldn't go over it. Like, we drew a line in the sand and was like, this is how much we're going to spend.

And you guys probably had the same even with your new construction, your townhome. And if you're even buying a home, know what that line is. Because easily, I feel like, is where you can kind of creep up in price and start to justify. Do you feel like people do that? Yeah, you have to decide ahead of time what the budget's going to be. And here's the thing with new construction that is kind of the life hack. The money isn't owed until you close

and the house is done. So there was a built-in extra savings time for us. Time, which is great. And ours kept having delays and delays. But for us, we were like, great, more time to save. We'll have more money to put down. So it was actually, you know, it was a silver lining. Yep.

With all the delays to be able to put more down. So when you close on a normal home that's already finished, you don't have that kind of time. And so you have to have that budget and know this is our line. We're not going to go beyond this. And there's going to be things that, I wish we had done it this way. And even when it's done the way you want it to, it's not done perfectly because homes are not perfect.

Yes. Things go wrong. And so knowing that going in just helps your heart. Which is so good. So how did you guys know when to move out of the apartment to the town home and then move to a single family home? Great question. So number one, we wanted to make sure we were out of debt and had a fully funded emergency fund. Okay.

So post-wedding, we kind of looked at all the money that was left and went, okay, we have our emergency fund. have some savings. How much more do we want to save for the down payment? So we recommend having at least minimum 5%, 10%'s better, 20% is ideal. Because you avoid PMI, that private mortgage insurance. And we wanted to do a 15-year fixed-rate mortgage. And that means your payment's going to be higher than the 30-year. Yes. And so we had to factor that into our budget. Usually a better interest, right? Yes, much better interest, right, which is awesome. And you're paying less than half the interest over the life of the loan. Yes, yes. So having that all figured out and going, all right, is this going to be a quarter of our take-home pay when we have this mortgage payment. And once we had that number,

we just went, great. We're ready to do this thing. And we went through the process. And what year was that the first, when you bought the town home? That was 2019. 2019. And then you guys moved to a single family home just what last year? Yeah. So about three years later. Okay. I love it. That's so good. So was there anything, again, that you feel like you may have compromised. Was there anything in the house that you were like, okay, we're going to do it. It's not ideal. But we're going to do it. Yeah, they're like in our town home especially with the upgrade list, there were just, there was lines we had to draw. We went, okay, we really want the level five tile, but we have to stick to this because of the budget. And so there's pieces of it where you just have to go, we can live with this.

And truthfully, a home is just a giant, wonderful box. And so we are obsessed in our culture because we watch too much HGTV and too much house flipping shows where everything's gorgeous. And what you don't see is the. 20, 30, 40, 50, 70,000 it took to make it beautiful and hire the interior designer and get all the furniture. And so we've made do, we've shopped on Facebook

marketplace for things where we're like, we can compromise on that. Now, a couch and mattress, emotionally, I have to buy new. I think that makes you a fine human being. That's great. Well, some people out there, Rachel, they'll just grab stuff off the street. I know. I don't know what happened in that seat. No, thank you.

We don't want that seat. So I don't compromise in everything. But furniture is a big, one because people go, I have to have everything all at once. You can upgrade it over time. Build it over time, so we did. Yep. Yeah. And it was so helpful.

You and Winston live this out. I know for sure. Okay, so when you think about and talk to people that are on the market, they're looking, some people want to do a sale by owner type situation. Other people want to have a realtor or a real estate agent. What would you, would you say, I think I know what you're going to say, but what would you recommend? Do it all yourself.

You're a pro. You've got this. You know the market. You're fine. Gosh, no. No, I always work with a real estate professional. Yes. I don't, I mean, I feel like I'm fairly smart.

Like, I could figure it out. But what the real estate pros have that you don't is experience, marketing know-how, access to MLS, the multiple listing service. And so when you think about it, like a marketing project, they know exactly how to stage this thing, strategize the deals, how we get the word out, structure the deals. Versus me and some guy going back and forth. And I got to be like, hey, would you take five grand? Like, this isn't a Facebook marketplace offer.

It's the biggest purchase of your life. Yes. And so this is not the place I'm going to skimp. You got to work with a book. I think that's so good, George, because I feel like there's so many areas of our money that can feel and are more intimidating, right? The more, you know, narrow you get in a subject matter,

whether that's insurance or taxes or investing or buying and selling a home. Like, these are really niche things that you want to be really, you know, manage that really well. And so bringing someone in who lives in that space day in and day out, It's so helpful because, like, you're saying, they know everything going on. They know the neighborhoods. They know the comps. We love a comp. We love a good comp.

But don't get somebody that's, like, had their license for, you know, three weeks. And they're really trying to build it. And real estate pros, like, some of them are, like, the multi-level marketing people. They're very aggressive and they're very, there's a lot of judgment and pressure of, like, you've got to work with me. Because remember that one time, I helped you move. Oh, yeah. And so there's people like that, so you have to set some boundaries.

Yes. and only work with a pro who has a great track record. They've been in the business a long time. And so I know you want to help your cousin, but save that for the wedding videography because they just got a camera. But I wouldn't trust them with the biggest purchase of my life. Yes, and it's okay.

It's not a selfish thing, you guys. It's being wise. And so we have actually real estate agents all across the country that we recommend. So if you want to go to Ramsey Solutions.com and check out our ELP program because they are fantastic. They're the best.

Okay. So what for you guys were some challenges is when it came to buying a new home, moving, deciding all of that. Like, what was it? What were things that you look back and you're like, oh, that was... Well, first of all, moving will bring out the worst parts of you. I think we can just call that out, especially if you're married couples. Because moving turns into like, I'm going to become a minimalist.

How do we have so much crap? That was us. That was me. And so you start to go, like, I'm going to throw away their stuff. And I'm like, no, no, no, you can't get... I might use that. Cardigans, Mike, this literally happened. Whitney got rid of a cardigan.

And then she was like, cardigans are back now. and I gave it to Goodwill, is it wrong to go back and see if they... And I was like, I think it's over. I still want it. I think it's over. But there's so much crap that Americans accumulate. Yes. And I go in my neighborhood and the garages, there's no space for cars anymore.

I know. Because we use them as storage units. For all our stuff. And so, number one, unexpected challenges is just having to let go of a lot and figure out what do we actually want to keep, what do we need to get rid of? And then the other task is selling stuff on Facebook Marketplace. You're like, what do we do? We did all this for five bucks.

I know. And the guy didn't even show up. Yes. We sold some stuff. I'm trying to think what it was. Because we got some, we were like, okay, that's a worthy sale item. And there were other things that I think we brought here to Ramsey. I think there was some stuff we were like, somebody just take this.

It gets to the point where you're just, it's a free yard sale. Yes. But it feels good to kind of purge because you open up that closet that you haven't opened up since your wedding day. Right? We had that. We saw it wedding gifts. Oh, yikes. Like bad wedding gifts that we never used.

Oh, yeah. We'll do something with this. Yep. Never did. So we're like, get it out of here. Clean it out the closet. Oh, you feel like everything is just so much more expensive than you thought it would be? Like, movers in my house.

Like, movers would be like $750. They're hourly rates this. I'll multiply it. And then everything takes four times as long. And you're like, dude, can you please move? They're wrapping the furniture. They're taking, you know, they're doing it right. Right.

But even getting boxes, like, because we wrap some, we like box some of our stuff, even going and getting boxes and paper and everything. And I was like, how much do we spend on boxes? That's where I'm like, just go to. Just moving supplies. Go to the liquor store. But even, I just for even Winston coming in my pocket, I was like, how much were those? So it is. It's just all expensive.

On top of all the closing fees and all the stuff you just didn't think about, the realtor fees. So you've got to factor that into your budget on top of the home price and the movers. And then the new stuff you have to get for the new house. Yep. And so it just keeps adding up. So I like to have a more buffer than I even thought I would to cover all of that. And the challenge of the new construction. I mean, the list goes on.

You have to stay on top with these people. And then we had one where we had the countertops put in. And I thought they put in the entire wrong countertop. I was like, no, it was all like one nice light color, and this one had all kinds of dark swirls, and I got the actual piece of tile they showed me, the example. And it was only one piece of it. And so I showed it to even, the superintendent,

it was like, yeah, that doesn't even look like. And then we plopped it onto our countertop, and it was an exact match for that piece of the countertop. Oh, that breaks my heart. So it was still beautiful. No, it was beautiful. Okay. Was this for the town home?

This was for the town, and we learned to love it. Oh, my gosh. But there's things like that. And even in the new home, we hired a hand, to do a lot of these upgrades and things we needed done. And it just kept adding up. I was like, I thought this was going to take him three hours. It took him nine.

So it's triple the cost. Of what it was, yep. And especially with everything going up, labor, cost of supplies, everything is just so much more expensive now. And so you got to be a detailed person, regardless of whether you're moving into a new build or not. I'm like, you just, you have to be on top of it, which is not always my. That feels like a Winston thing.

It was Winston thing. Did he have a spreadsheet? We, because I had a spreadsheet. George, Winston's a man after my own heart. He's like a man. This is what he does. He like, construction.

He loves it. But we literally walked up to our house when it was being built and he was like, that's the wrong brick color. And I was like, what? He knows his brick color. Are y'all ready for this?

Where the brick was manufactured, he was like, we got the Mississippi white grain brick. That looks like the Georgia white grain brick. Whatever, whatever. It was two different states. And they did. We picked one state, which I didn't even know this.

what the difference. And the dependent, are you ready for this? The humidity of the state, like North Carolina humidity versus Mississippi humidity and the way the brick curates or whatever. It affects the color. I mean, like, I like that much. Someone like me would not have noticed.

That's amazing. They were, like, doing like half of a wall and he was like, that's definitely not our brick. You know what I just realized? Winston is a construction sommelier. Is that? You know what I mean? Like a why?

Like he understands the brick. He knew, well, he knew, and I thought. He knows every kind of grout color that's out there. Oh, and I was like, or baseboard inches, I don't know, it's crazy. I'm not that. But I was like, I would never have known. And most people don't care. And most people don't care, but also it's like, what this is what you pay for.

Like, we want to get what we want, to your point. Exactly. Put a countertop on that I think is pretty, not one piece of it that's pretty. So like, it's just, it's a lot. It's a lot. That is a lot. But it is, it is fine. One thing I did, Rachel, with new construction, because they don't, they show you one piece of grout,

and they show you one tile for the kitchen backslash, and they go, if this is what your kitchen will look like, I'm like, I have no idea what that's going to look like. Oh, yeah. So I made a little keynote presentation where I found it all online and put all the pictures together in one area with our furniture and was like, okay, this gives me the vibe. So I am extra, but it helped me because I was like,

I thought I was going to have a 3D rendering where I could like walk through my own future house. Oh, yeah. We're not that level yet. No, we're not that. We weren't that level either, George. It's fine. It's fine.

But there's a lot of things you just have to, you can't be a perfectionist. when it comes to moving and buying a home. Yes, that's right. That's all good. So, so good. Okay, so a couple of things off the top of your head. Okay, so, George, what were some stressors for you guys that you didn't think about and you're like, oh, well, this is good to know for the future?

Well, for starters, doing the research ahead of time and taking it little by little, so it's a part-time job. You've got to think about this stuff a little bit each per day so that it's not too much all at once. And research is a big part of who are all the people I need to get in touch with to make this smooth. from the movers to the handymen to friends who can help me move. There's a lot there. Where I'm getting the boxes from. Maybe I'm going to go to work and see if people have moving boxes

because someone else just moved. And so you've got to be really resourceful. Utilize your network, Facebook groups in your area, your neighborhood, and your workplace. So good. That's a huge help. Okay, that's great. And then decluttering your home.

Before you start packing, get rid of as much stuff as possible. Yes. Because it's just going to go to another spot in your house where you'll never see it again. That's right. And so get rid of it now to save time, money, headaches, all of that. Yes, that's a huge one, because the less boxes that are being moved,

the more money you're going to save over time. Yes. And I'm a moving, like, I hire movers. I don't ask friends to help me move the big stuff. Yes. But if that's you, you got to ask ahead of time, get clear people's schedules, get them to commit, get a babysitter on moving day or doggy daycare if you got the pups.

And so I'm sure Winston's always like, yeah, they can borrow the truck for the big move. That's why people buy trucks apparently. Use the truck. Go and move. No. Back in the day, we did. I'd rather support a GoFundMe for you to hire movers than to help you move. Let them do that.

Yeah, that's a young man's game. I know. Absolutely. The biggest one to me is just actually budgeting for it. So we had a spreadsheet of all the expenses. We were keeping track of everything we were spending, what our top line budget was, and we stuck to it. We had to compromise.

Well, I think that's a big thing, too, is because it's amazing how quickly money can be spent in this process. And so being as diligent as possible, knowing up front what things are going to cost on the financial side. I think you're exactly right, George, having that budget and sticking to it. Also, I would say I went through and took pictures of, like, the kitchen, smart. Took pictures in our bathroom, everything.

And I knew where I wanted all of our plates and our silverware and tupperware and spice it. Like, I knew where I wanted everything, and I labeled it on my phone. So when we had people come and help us unpack, because I had a baby, Charles was two weeks old when we moved. You all are crazy. Well, I know, it was crazy. That was chaos. I know. But then you get to, like, delegate everything.

and I didn't know. Sorry. Got a baby. I got a baby. But labeling is smart. Yeah, and so when my mom, people came into help, they knew exactly where I wanted everything already.

So doing as much as you can ahead of time is really big. And then, yeah, we went and packed all of like our breakables, all the things that would have cost a moving company a lot more to pack. They charge more. Oh my gosh. We just did it ourselves. We just took a few nights. I remember, yeah, did our China, did our dishes, did our cookware, all that.

That's a good reminder. Just do a little bit each night versus like we're going to do it all of the, Oh, yeah, no, no, no, that's stressful. So spread it out. Spread it out. And that helps, yeah, lower the stress, but it's a lot. This is a big decision. It's a big deal.

So it's good to be prepared. And we're going to move again one day probably. You know, most people are going to move a lot in your lifetime. So get good at it. Yeah, learn from your mistakes. You can do this. So great, George, thanks for being on. Always a pleasure.

So appreciate your insights, your help. And if you guys know somebody that is going to be moving, make sure to send them this video and so that they can know the do's and the don'ts to they're moving. Now, George, where can everyone find you? Well, of course, we have our own show called Smart Money Happy Hour, so you can catch that on podcast and YouTube. And I have a new YouTube channel. That's a blast. So everyone who's watching this go to my YouTube channel. It's just under my name, George Camel of the K. And we're putting out three videos a week over there that are just dialed up all the humor, all the fun. So good. So check that out. Good content. You guys,

make sure check that out. And go to ramsysolutions.com if you want some other resources on the do's and the don'ts. And there's a moving checklist you can check out in a digital form that you can fill out to get a quote from pods and so much more. So I'll put all those links in the description, so make sure to check it out. Today I'm going to answer a question that many of you have been asking. Is it possible to afford a home in our economy? And listen, this is a big pain point that a lot of people are feeling. Because with inflation and the cost of living being so high right now, it seems more and more difficult to save for a down payment. And listen, this problem is very real.

Absolutely. But it's not something that you can't overcome. So let's talk about some of the real estate trends we're seeing right now and what they mean for you and your money and what you can do right now to buy a home when you're ready. All right, the first real estate trend is low inventory. So this means that there are fewer listings available than there are interested buyers.

So this is a classic supply and delivery. demand issue, but inventory has slowly been moving upwards since May of 2022, giving house hunters more options. And hopefully, this trend continues. So for you, this means that you need to be prepared to make an offer quickly. Now, I'm not saying rush into anything because this is a really big decision. But what I am saying is knowing what you want, being open to sacrificing some of those wants, maybe broadering your search to other areas, getting pre-approved up front. All of these things are steps to help you have success when it comes to buying a home. The second trend that we're seeing is a rise in annual home values. So this means that the price

of homes is steadily going up. And if you already own one, this is really good news for you. That means your investment is paying off even more quickly than you expected. Now, if you don't own a home, but you want to buy one soon, this means that you need to find out which you can actually afford. So here are a couple of things to keep in mind. Number one, limit your house payment to no more than 25% of your take-home pay.

And this is going to include your principal interest, property tax, insurance, HOA fees, and if your down payment is less than 20%, PMI, which is private mortgage insurance. So PMI is an extra fee added on to your mortgage payment to protect your lender in case that you don't make, payment, which again is all wrapped up into your monthly payment, which should be no more than 25% of your take-home buy.

Number two is to save for a bigger down payment. So in a perfect world, you would put like 20% down on your future home because, again, you can avoid PMI insurance when you do that. But if you're a first-time home buyer, you can do something smaller, like 5, 10%. That's okay. So again, the more down payment you have, the wonderful it is because that means you're going to take out less on your mortgage. but again, if you have at least 5% as a first-time home buyer, go ahead and do it.

And remember, saving for a down payment takes time. So consistency and patience is the game for this. So start by creating a budget and saving as much as you can. And you might be surprised at the progress that you make in six months in a year. And for the record, you should avoid down payment loans no matter what. Taking out a loan for a down payment on your main loan is a risky game. We're not going to play that. so don't do that. Next, Tuesday, 15-year fixed-rate conventional mortgage.

So this is the lowest total cost home loan that's out there. And it's really the only one we recommend a Ramsey because we want your house paid off quickly and not be in debt forever and ever and ever. Now, there's other plans, like a 30-year, an FHA or an adjustable rate mortgage, and all of those will end up charging you tens of thousands of extra dollars in interest and fees. So steer clear of those. All right. The third trend that we are seeing is higher interest rates. Yeah. So that means the percentage of money that you're charged while paying off your loan in addition to your home price is higher. So get this. We saw an increase from 2.8% to 6.36% from January to October in 2022 when the Federal Reserve decided to raise

interest rates. I mean, that is a crazy jump, you guys, in just a few months. Now, higher rates make it more difficult for buyers to afford the loan that they want on their house. So give yourself some grace if that means that you can't buy the house that you really want to or as quickly as you want it to because you're not alone. That's how a lot of people are feeling. And this is really an unexpected hurdle for a lot of people, especially first-time home buyers, because you can't control the housing market or the government. So like it's terrible.

It's not fun. But listen, stay the course. Keep working the baby steps. Keep budgeting. and eventually you will have enough money for a down payment. All right, now that we're talking about some of the current trends when it comes to real estate, let's talk about your next steps for you to be able to buy a home when the time is right for you. So first, if you have any kind of debt and you haven't worked the baby steps yet,

this should be your first move. So you first want to save a $1,000 starter emergency fund. So this will cover any small, unexpected emergencies that come up. And this is really important, because if you don't have this, then your progress of paying off debt could be derailed and not good. So make sure you have that in place. Then you want to attack all of your debt. So car payments, credit cards, student loans, all of that with intensity.

Your mortgage is not included in this if you have a current home. But every other debt is. You want that paid off. Then once you're debt free, you want to save three to six months of expenses in a fully funded emergency fund. So this all really helps you have a strong foundation to go into homeownership because you have no payments, you have some money saved on the side, which is really helpful. And then you're going to keep using your monthly budget to save up for the down payment. So after again, your debt is paid off. You have a fully fund and emergency fund, then start saving up for a down payment. If you're

investing in retirement, I would pause those contributions and funnel all that extra cash to saving for that down payment. And then once you have your down payment saved, then you can go and buy your house, and then you can tackle babysubs four through seven. All right, you guys, I hope this video kind of gave you an overview of what's happening in the real estate market out there. And I know it's hard, you guys, it's so frustrating. But I have the hope that you can do this and you can walk in knowing what you can afford in a house. You can work a plan that is wise and stay consistent. So don't get discouraged by comparison culture out there and housing market trends that feel

like they're completely out of your control. Buy a home when you are ready to buy a home. It's one of the best pieces of advice that I have for you. And again, if that time is right now, then that's great. And you can even reach out to my friends at Churchill Mortgage for help. They are a trusted source for all things, real estate and homeownership. And be sure to check out Ramsey Solutions.com, because there you will find the seven baby steps, our free mortgage calculator, and our cost of living calculator.

And a full article about the state of real estate in 2023. Okay, house honey, you guys, in today's economy, I know it's so tough to go and buy a home. but listen, you can do it. Be wise, put the right steps in place, and I promise you will be so thankful. All right, I want to thank George Camel for being a guest on the show today, and I thank you guys so much for listening.

If you will, will you please stop and review this podcast? So right now where you are, just send a review out into the world because it helps so much. It helps with the algorithm when it comes to podcasts, and when people are searching for a money podcast, it helps other people to say that you love it too

because we want to help as many people as possible. All right, you guys, thanks again. And remember to take control of your money and create a life you love.