Sandi, a resident of the quaint town of Ocean Shores, located two hours west of Olympia, recently sought financial advice on the widely followed Dave Ramsey Show in a video titled “I’m 70 and only have $900 to my name. “
Her question revolved around a long-held dream to build a detached garage on her lot. The home, which has no garage, is currently assessed at approximately $190,000, with an outstanding mortgage of $136,000.
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“I would have to refinance the house and raise enough equity to do this, up to $20,000,” Sandi explained to Ramsey. Then she asked the burning question: ‘Would this be a good move? I am retired.’
Sandi, who is 70 years old, went public with her modest financial resources, revealing that she only has $900 in savings. Her income comes primarily from Social Security and a teacher’s retirement plan, which provides about $25,000 annually. She occasionally supplements this with income from substitute teaching, bringing her total annual income to about $30,000.
Dave Ramsey, known for his strong stance against debt, responded with his characteristic concern and straightforward advice. “I don’t want my new 70-year-old friend with $900 to get further into debt,” Ramsey said emphatically. “I’d like you to have a garage, but I like it even more that you have a very low house payment that you can manage with the income you bring in.”
Despite Sandi’s hopes to increase her assets and perhaps improve her quality of life, Ramsey’s advice was unequivocal: avoid additional debt. He noted that taking on more debt at her stage of life, given her limited savings and fixed income, could be risky and detrimental to her financial stability. “You’re a frugal lady with common sense, and you’ve got a little garage fever going on here. Usually a good cold shower will clear up that fever,” he added with a touch of humor.
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Sandi and Ramsey’s interaction highlights a common financial dilemma many retirees face: balancing the desire for home improvements and other life enhancements with the stark reality of fixed incomes and limited savings. For Sandi, the dream of a new garage must be balanced with the practical advice of staying debt-free and maintaining financial security.
Although not everyone can consult Ramsey directly, you can always seek advice from your own financial advisor. These experts can provide detailed advice to ensure you’re financially on track to achieve all your goals, whether it’s saving for retirement, renovating your home or building a garage.
In a world where many face similar choices, Sandi’s story reminds us of the importance of careful financial planning and the value of seeking sound advice when making important financial decisions. As Ramsey often advocates, living within one’s means and avoiding unnecessary debt are crucial steps toward achieving long-term financial stability and peace of mind.
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This article ‘I’m 70 and Only Have $900 to My Name’ – Caller Asks Dave Ramsey If Refinancing a Mortgage and Using Home Equity to Build a Garage Is a Good Move originally appeared on Benzinga.com
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