Dave Ramsey suggests how man with little saved can get by


On a video posted on the Ramsey Everyday Millionaires YouTube channel, Dave Ramsey offered guidance to James about the best way he can save for retirement. James and his wife are both 60 with not much saved for retirement.

They are both “very concerned” they will be left to struggle in retirement with the current state of their finances.

James said: “We’re just really concerned for our retirement because that [the house] is the only thing we have.”

Their house is the biggest asset they own, so James considered selling it to get some equity out and have available cash.

The pair had just refinanced their house to get a lower rate which he said has “really helped” his financial situation.

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Mr Ramsey explained to them that there is no way for them to get that equity unless they sell their house, or do more borrowing, adding that he wouldn’t tell the couple to do that.

Other than his house, James felt stuck.

He did not have much in his pension, however, he had worked hard to pay off existing credit card debt and build an emergency fund.

He said: “My pension savings are nothing to brag about.

“I have no credit card debt, and about $25,000 (around £18,475.88) as a reserve emergency fund in cash.

“Other than that, I don’t have anything else. I’m afraid I will never retire.”

In order to help James feel more confident about the future, Mr Ramsey suggested a 10-year plan that he can focus on to prepare for his retirement.

He told James to start “chunking money into retirement”.

He said: “You need 15 percent of your income going into there.

“You do that for five or 10 years, you’re 65 or 70, you will have increased your retirement fund substantially.”

At the time, James was overpaying his mortgage payments by $200 (around £150) each month, and asked if he should continue to do this, or put this extra cash towards retirement.

The money saving expert explained that if James wants a good solid retirement, he’ll have a paid for his house and a nest egg.

He continued: “You’ve got 10 years to do that, you need to aim at that.

“It’s not going to be $200 (around £150) a month extra, it’s going to be more than that.

“You have to be putting at least 15 percent of your income into retirement and chucking money big time on that mortgage payment.

“Get that stinking mortgage paid off man and build your nest egg up even bigger.

“You have five to 10 years to get the house paid off and build a nest egg.”

More videos can be found on the Dave Ramsey – Highlights Youtube channel.

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