Real Estate Q&A

Dave_Kimbrough_Leaning

Dear Dave,
It seems like everywhere I turn these days, there is someone talking about Dave Ramsey and his budget plans.  It has really got me thinking about budgeting, and has prompted me to look into some different apps and plans to do this effectively.
This past year we purchased a home and I really want to make sound decisions as I move into my 30’s and budget and invest wisely.
Do you have any great advice for me in terms of budgeting and home ownership?
I value your opinion and look forward to reading your advice every week!
—Alex, Grand Junction

Alex,
Great question and it is awesome that you are looking to be fiscally responsible as you move into what are your prime income earning years - your 30’s and 40’s.  Dave Ramsey, in my mind, without question is on the forefront of fiscal responsibility with his programs, talk show, and web site.  You can find an incredible amount of financial advice at daveramsey.com and there you will find his 7 baby steps to taking control of your money!  Let me add, purchasing a home is a wonderful way to start creating wealth.
Several of the “Baby Steps” listed on the Dave Ramsey website make a ton of sense, regardless of your age.  First, is to save $1,000 for an emergency fund.  You never know what curveball’s life is going to throw, but there is little doubt there will be some coming your way.  Having an emergency fund, for a bump in the road, is a wonderful idea and you will be prepared for that broken arm, car repair or trip to visit a sick family member.  As any experienced home owner will tell you, there are many things that can pop up at the most unexpected times - like a hot water heater, furnace, swamp cooler, roof repairs, fallen tree and much more.  This emergency fund can also relieve quite a bit of stress, just knowing that you have something to fall back on, if necessary.  After you have saved your emergency fund, it is a great idea to save and have at least 3-6 months of expenses in savings.  This will allow you to weather the more significant problems that come up in life… the birth of a child, loss of a job or a major health related issue.  Having 3-6 months built up can offer you the mental freedom of knowing you have taken steps to protect you, your family and your future from a potential disaster.
It is a great idea to pay off all debt, except your home.  Your home is generally financed at a low interest rate and the interest each year is tax deductible. Non-mortgage debt is generally high interest debt and paying it down is critical to gaining financial freedom.  Getting rid of credit card debt is key.  According to nerdwallet.com, the average American house hold (of households who have credit card debt) currently carry over $16,000 in credit card debt and the high interest rates on that debt makes it very hard to pay off.  Remember, before you purchase something with your credit card, ask yourself “how bad do I really need this and can I pay it off in the next 30 days?”  When I got my first credit card, my parents advised me to ask these questions and it has been very beneficial to me. Even today, I still ask myself those questions before pulling the trigger on the newest video game or tennis shoes.  The answers to those two questions will probably lead to less spending and also the accumulation of less stuff.  If you are spending less, you should now be able to begin saving more for retirement.
Your home is now a big part of your wealth building and financial portfolio.  Make sure to treat it as such.  Keep up with maintenance and updating to help protect your investment.  Remember to celebrate your successes and let them build on one another until you become a saving machine!  I have no doubt you have a very bright future
Dave Kimbrough
The Kimbrough Team
REMAX 4000 Inc.

Dave Kimbrough has 14 years of experience in the real estate business and heads up the most successful team of agents on the Western Slope. Learn more by clicking: The Kimbrough Team





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