‘I wouldn’t do it!’ Dave Ramsey serves warning to retiree with only £700 to her name
On a video posted on The Ramsey Show – Highlights YouTube channel in 2019, the American personal finance personality offered guidance to Sandy who wanted to refinance her house to build a garage. She said: “I’ve wanted to build a detached garage on my property for a long time. My little house does not have a garage.
“Currently the house is worth $190,000 (around £143,386) and I owe about $136,000 (around £102,618) on it.
“In order for me to build the garage I would need to refinance the house and take out the equity to do this.
“Up to £20,000 (around £15,085) they say I could take.
Sandy wanted to know if this was a good move for her to take.
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She explained to the finance expert that she does not have much in savings.
She continued: “I’m retired, and I don’t have any money except for a little bit in savings right now it’s not much.
“I have $900 (£679) to my name.”
Sandy lives on her social security and teacher retirement income fund which gives her $25,000 (around £18,864) a year.
Occasionally she works as a supply teacher, adding to her income and in some years totalling $30,000 (around £22,637).
Sandy called Dave as she had heard him on the radio.
He said: “If you’ve listened for more than just a few minutes you know I’m no debt Dave, don’t you?
“So, you should already know what I’m going to say don’t you.
“I do not want my new 70-year-old friend with only $900 (around £679) to go further into debt.
“I’d love for you to have a garage, but I love more that you have a very low house payment that you can manage with your income you have coming in.”
The money guru joked: “You are a frugal common-sense lady with a little bit of garage fever and usually a good cold shower will fix those fevers.”
He explained to Sandy the tough position she was in and stressed that she didn’t need to be taking on more debt.
Dave continued: “You don’t have any money, you’re living carefully on the pension and social security that you have, you’re 70 and you still have a mortgage.
“I don’t need you to have a bigger mortgage that would further destabilise your life.
“It’s not worth the extra risk and stress that it could put on you. I wouldn’t do it.”
Whilst looking for gifts for her grandchildren online, she also found a $10 (£7.55) sale and wanted to see if she could buy gifts from that.
Sandy had three grandchildren graduating in June, two twins and a stepson.
As a gift Dave sent her three graduate survival guides which Sandy was very appreciative off.
He added: “We are sending you three copies of that book to say thank you for being a new listener. We appreciate it.”
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