Is It Okay To Go Into a “Little Bit of Debt?”

[Music] brought to you by the every dooll app start budgeting for free today let's go to Ethan and Kalamazoo hey Ethan welcome to the show hi hi how can we help um so I just had some questions so I just turned 18 and I graduated a couple months ago and I just don't really have any idea like what to do with my money okay so you're 18 years old graduated from high school what are you doing now are you in school are you working uh I'm a pipe fitter in a pipe buer okay good for you how much are you making um I make $20 an hour so about 2,400 a month okay good for you are you living at home or are you on your own yes ma'am you're at home okay awesome how much money do you have um right now I have about three grand saved up uh in a checking account and then I have I think 2500 in a money market and then I have another 300 something for bills okay and do you have any debt uh no sir great and what's your question um so I was just like wondering because I know I feel like every like my whole life people said like you know renting like Apartments was like super bad and stuff and then I heard a couple times from you guys that you know renting apartments isn't always the worst idea and I just figured you know since I'm young I don't want to get any in any debt ever you know it scares me now after I've watched your guys' shows for 10 hours a day and so I was just like wondering like what's okay to be in debt for and like what's not okay yeah that's a great question well if you've listened to the show for 10 hours a day you'll know that we are anti- debt all the way anytime we don't think there's any such thing as good debt and the only debt we don't yell at you for is a 15year fixed rate mortgage that you're attempting to pay off early so outside of that we don't believe there's any good debt that it should be leveraged that it's some kind of tool we've only seen it cause pain and harm in the long term and the ones that brag about it just haven't been burned yet and so at 18 man if you can get a hold of those principles now you're going to be unbelievably wealthy and you're going to have a great life yes sir yeah and and the renting thing Ethan yeah we are not we're not against renting I mean renting buys people a lot of patience and gets them in a position financially then to be able to put a good down payment on a house uh get out of debt you know do some things and where a lot of people feel like it's just throwing your money away um for us you know there's there's a level of risk that you don't have when you don't own a home because owning a home I mean it can be expensive I mean you're you know from roof issues we just had our chimney had to be completely basically redone in the inside and so they've been working all week at our at that um you know we had stuff with our roof last year Stu you know appliances go out I mean it's just there is so much that you pay for as a homeowner when you rent you don't have that expense so there's a there's a beauty to that right we we eventually Ethan want you to have a house because owning a home and real estate being part of your overall Financial picture is a great thing and we are all about it but we want you to do it the right way but but you're 18 so my question for you is are you um you know are you going to are you going to school are you going to do trade are you going to be doing this job do you think for the near future are you happy living at home do you want to be out on your own where are you at with just your life stages right now it would be nice to be out on my own but you know just like the like the apartments in my area like just a studio those costs about you know like 1,00 to 1300 a month and that's well over half of my monthly income right now yeah um I don't really plan on going to school the place I work for they do an apprenticeship and so hopefully I'll start that up uh in September okay and will that cause a a raise to occur yes ma'am that's great what will you think you'll be making um uh I'm hoping they'll give me another dollar so about 21 okay but the thing is is in you know four or five years when I'm done with the apprenticeship and once I become a journeyman I'm expected to make you know around 50 hour yeah that's amazing you'll be six figures by then that's incredible that's so great Ethan um yeah so what I I wouldn't be in a rush with the with the housing situation I mean I think eventually you'll get to a point um you know maybe when you're 1920 and go get a roommate that's what I had roommates up until I was married and so get a two-bedroom and it may be 8 or 900 bucks a month if you split it and uh go do that for a while and that will give you a sense of Independence it'll help you learn how to be an adult and uh you know Dave always says that an eagle that doesn't leave the nest is eventually a turkey so it's good I think it's good for your spirits if you can get out but Ethan I feel like such a mom right now we're like but I'm like he's only been out of you haven't I mean I guess it'll be coming up on a year did you graduate last May from high school um no I graduated early so I graduated um right before Thanksgiving nice okay so so you so you've only been out of school for three months right out of high school yes ma'am okay so yeah I just feel like you're just so young I'm like you don't have to go live on your own apartment right now but if that if he's saying that's something he wants to do I don't want people to feel like well once I get out I need to go buy a house that's right no no no no no no yeah yeah and if you want to go and rent an apartment and go do it that's great that's great but I I do feel like you've had a lot of Life shifting and you're learning how to be an adult right now and if you don't have to pay for rent right this moment and you know I think I think that's a great thing but I would have plans to move out right get to your point George yes and while you're at home it brings dignity it brings every single pen this is such an amazing season where you don't have many bills and what happens and I I live this out when I was 18 living at home is I started working and I just spent every paycheck cuz they didn't have bills I was like what else are you going to do I'm 18 let's go have fun and I just bought gear and stupid crap and I could have been saving and I could have been paying off student loans but I was just being an idiot just just a little old lad George you won't be me Ethan you're going to do great but here's the thing pay cash for your next car that's where 18-year-olds go wrong so what driving now um I have a Ford Ranger is it doing well for you yeah yeah it's it's been pretty reliable I've had it for almost two years now cool so great yep so yeah I would do what George said just stockpile some money have a have a dates to say okay you know by I don't care when it is September or something six months from now or whatever I'm going to really seriously look at moving out being on my own and honestly then by I think there is something about when you work and you're not in school you do feel more like an adult right I mean like there's a sense you're bringing in a bunch of money and you're and you're going to that itch to move out will probably happen sooner than later I just don't want you to feel like you have to rush out right now because you've just had a lot of life change but um have a date talk to your parents about it too and just over communicate with them like because you sound like a very responsible guy you know and so I think having that plan is great and that money market account uh is a great place to be doing your um emergency fund so I would build it up to 3 to six months of expenses which may it will increase when you move out because you'll have housing and all of that um but just be putting money away in that money market account and um and I think just be saving and avoid debts and then um be looking at investing soon after you get that emergency fund I mean there's some things you can be doing uh if you hold on the line Ethan I'm going to give you George's book Breaking Free from broke because he does a great job laying out so many of the myths in our world today when it comes to money and our culture in our generation and I think as you start you know diving into adulthood more and more you're going to hear more and more opinions about money and George does a great job refuting is that the right word oh yeah great word thanks man really really pulled that one out refuting a lot of the the myths and the lies that people have fallen into it will keep you away from debt for the rest of your life I promise you if you read that book it makes you want to take a shower when I just lay out the facts and Ethan's already right there but it's easy at 18 you start working you feel like you need to increase your lifestyle and you start comparing my buddy just got he just got a Camaro you got to just turn down the noise and all of that and focus on your goals that's what the kids want these days Sports really I don't know why are Camaros the thing I I saw some nods out there the 18-year-olds love a Camaro they love a muscle car W who knew bring I got my finger on the pulse Rachel man you know what's going on George you're so so hip create your free every dooll budget today the simplest way to budget for your life