Dave Ramsey is a well-known radio show host and a national best-selling author. Many individuals look forward to his views on personal finance. What is Dave Ramsey’s advice during the coronavirus pandemic?
Dave Ramsey’s advice on managing money during coronavirus pandemic
Many people have lost their jobs during the COVID-19 pandemic. According to Dave Ramsey, there are five things that you should do with your money during these times.
- Don’t panic.
- Get on a budget.
- Focus on “Four Walls,” which are basic needs—food, utilities, shelter, and transportation.
- Cut down on unnecessary and discretionary expenditures.
- Stockpile cash if you have lost income during the COVID-19 pandemic.
If you lost your job, Dave Ramsey advises that you look for a temporary job. There are several ways that you can earn extra money even in a recession. Ramsey also advises cutting down on discretionary expenditures like streaming subscriptions and selling things that you don’t need to raise some extra cash.
Dave Ramsey's advice on student loan repayments
Dave Ramsey advises that individuals stop their student loan repayments if they have been personally hit by the COVID-19 pandemic. He recommends stopping repayments if a person has lost income or a close relative is hospitalized due to the coronavirus. Simply put, if you have other pressing troubles at hand you should make use of the CARES Act and defer your student loan for the time being.
However, if you can make repayments on your student loan, Ramsey advises that you keep repaying the loan, which will lower your liabilities. While deferring the loans during the COVID-19 pandemic wouldn’t hit your credit score, it would mean that you would need to keep repaying the debt for longer. If your goal is to become debt-free and you are able to repay your student loan, Ramsey bats for repayment during the coronavirus pandemic.
Parents: Don't encourage your kids to take out student loans. Encourage them to make plans to go to a school where cash can be paid for college.— Dave Ramsey (@DaveRamsey) July 9, 2020
Academics are important, but they do NOT cause you to be successful. We all know highly educated broke people.
Dave Ramsey’s advice on real estate during the coronavirus pandemic
Dave Ramsey noted that contrary to the perception, the U.S. housing market has been pretty stable in terms of pricing. In fact, the appreciation in U.S. home prices was at a six-year high in September. Clearly, bargain hunters or the people who were looking at massive discounts while buying a home are in for some disappointment.
Dave Ramsey sees record low mortgage rates as positive but advises against buying a home “if your job and income aren’t stable, you still have debt, or you don’t have a down payment of at least 10–20%.” According to Ramsey, the advice holds good for all periods and not only during the coronavirus pandemic.
Winning with money (and in life) is a marathon, not a sprint. Consistent incremental progress causes the win. You can't microwave success.— Dave Ramsey (@DaveRamsey) October 26, 2020
Buying a house is still part of the American dream. However, low mortgage rates shouldn’t drive your decision to purchase a house. Buying a house is a long-term commitment and you should be reasonably sure about the stability of your future income before you buy a house.
If you have an existing mortgage at higher rates, it might be a good idea to refinance your mortgage at lower rates. However, there are several aspects that you need to watch before refinancing your mortgage.