We follow Dave Ramsey's guidelines loosely, but we used to be totally 100% into his plan. I had called Ramsey about 5 years ago asking if we should just go ahead and buy a home because we had been renting for 16 years. We didn't have 20% down but we were completely debt-free and had our 3-month emergency fund saved. He cut me off and didn't let me speak anymore and went on his usual rant about having 20% down or Murphy will move in the spare bedroom.
He didn't take into account that we had numerous medical bills over the years that took any money we could have saved at the time because we were following his get out of debt fast plan and went gung-ho every time we had a medical bill, so we never stopped and actually saved a down payment. We decided to buy a home anyway and I'm glad we did! Because today, our home is worth $120K over what we owe! We actually have an asset and the mortgage payment is parked for 30 years, the only thing that goes up are the property taxes and homeowner's insurance. It was the best decision we could have made because this area rents out a 3 bedroom for well above $1400 a month and that wouldn't have worked for us.
Dave Ramsey does say some things I agree with, one being make sure your housing costs are 25% or less of your monthly take-home pay. This used to be easily done because housing prices were affordable. However, right now we are having massive inflation and low inventory in homes for sell is causing the most ridiculous market I've ever seen! Whatever you do, don't buy something you can't afford. Just look at these figures that I entered on Ramsey's website calculator for families making anywhere from $40K-$70K:
Having an income of $6,500 take-home pay, puts you making over $85,000 at least, including taxes in there. So, there is no affordable housing right now using Ramsey's guidelines for most Americans that make less than middle-upper middle class. Some people are buying homes based on 40% of their take-home pay and this is beyond dangerous, it is ridiculous!
You must think about what you CAN afford - since you can't afford what's out there right now, can you afford to build a new home? Can you afford a small piece of land and a tiny home? That may be the saving grace of many families and if that is all that you can afford, then that is all you can afford!
Don't put yourself into a situation that not only compromises your finances, but also compromises your obedience to God's Word as being a keeper-at-home!
I've discussed this very thing with my daughter recently and we talked about how we may not always have it so good - things can change and you must put God first and obedience to His Word. If your treasure is in Heaven, then it won't matter how many square feet you have or don't have.
I recommend everyone write your Congressman and demand affordable housing! I have more to say on this in the future and hope to do a podcast about it. But most importantly, PRAY - because God can open doors that are closed for others and you would be amazed because nothing is impossible with God!! Somewhere out there is a wealthy builder who will be part of the solution and build some affordable, smaller homes and I pray that God will bless this man 1000-fold!
Image credit: My screenshots of DaveRamsey.com