Answering Your Top Housing Questions

Summary

Smart Money Happy Hour with Rachel Cruze and George Kamel
Episode: Answering Your Top Housing Questions
Release Date: April 10, 2025

In this engaging episode of Smart Money Happy Hour, money experts Rachel Cruze and George Kamel delve deep into the most pressing housing questions faced by listeners today. Hosted by the Ramsey Network, the duo blends financial expertise with relatable anecdotes, creating a warm and informative discussion about navigating the complexities of the housing market, whether you're renting or aiming to buy your dream home.

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1. Current Housing Market Overview

Rachel and George kick off the conversation by addressing the current housing landscape. Citing data from the U.S. Census Bureau, Rachel points out, “only 37% of Americans have lived in their homes for more than 10 years” (00:16). However, she also highlights a positive trend: “more than a third of homeowners plan to stay in their current home forever” (01:26). This sets the stage for a nuanced discussion about the stability and flexibility homeowners seek in today’s market.

2. Renting vs. Buying

A significant portion of the episode revolves around the perennial debate: renting versus buying. George emphasizes, “there's this vibe of like, you're wasting money on rent. Why are you still renting?” (00:18). Rachel counters by normalizing renting, stating, “Renting is not bad. You're okay” (09:09). They discuss the emotional and financial aspects of renting, acknowledging societal pressures while advocating for individual financial readiness.

3. Financial Readiness for Buying a Home

Determining the right time to buy a home is crucial. Rachel poses the question, “When should I buy?” and George responds, “when you're financially ready” (09:37). They outline key indicators of readiness:

• Debt-Free Status: Eliminating high-interest debts.
• Emergency Fund: Having a fully funded emergency reserve.
• Down Payment: Securing a 5-10% down payment.
• Mortgage Affordability: Ensuring that mortgage payments don’t exceed 25% of take-home pay (10:16).

4. Waiting for the Housing Bubble to Burst

The hosts tackle the common concern about timing the market. Rachel mentions, “Should I wait for the housing bubble to burst?” (11:24). George warns against waiting indefinitely, explaining, “Supply and demand is still favoring buyers” (12:19). They conclude that waiting for a market downturn might lead to missed opportunities, as the housing shortage persists due to factors like low seller turnover and construction delays.

5. Home Equity Lines of Credit (HELOCs)

HELOCs are scrutinized for their potential risks. George describes them as “using your home equity like a credit card” with variable interest rates, labeling them a “very dangerous game to play” (13:25). Rachel agrees, advising against using HELOCs for renovations or non-essential expenses, emphasizing the importance of maintaining financial stability without leveraging home equity irresponsibly (14:02).

6. House Hopping

Comparing house hopping to job hopping, Rachel asks if frequently moving homes is a smart strategy (32:44). George shares his personal experience of moving every three years, noting the high costs associated with frequent relocations, such as realtor fees and closing costs (16:17). They advise that while occasional moves can be beneficial, house hopping should not be a primary strategy due to its financial drawbacks.

7. Mortgage Guidelines: How Much Should Your Mortgage Be?

Rachel and George discuss optimal mortgage allocations, recommending that housing expenses should not exceed 25% of take-home pay (17:38). George clarifies that this percentage is based on income before deductions like healthcare premiums and retirement contributions (18:32). This conservative approach ensures ample financial flexibility for other life goals and unexpected expenses.

8. Best Mortgage Types

When questioned about the best mortgage options, George dismissively mentions balloon mortgages, while Rachel and he collectively advocate for 15-year fixed-rate conventional mortgages. Rachel highlights the substantial savings in interest and the accelerated path to homeownership, stating, “the difference between a 15 and a 30, it's unbelievable. Like hundreds of thousands of dollars you're saving” (10:16). They acknowledge that while 30-year mortgages are manageable, 15-year terms align better with the Ramsey plan for financial health (19:07).

9. Personal Experiences: Challenges of Homeownership

Both hosts share personal anecdotes about unexpected challenges in homeownership. George recounts dealing with maintenance issues like a malfunctioning HVAC system and ice dams causing ceiling leaks (20:56). Rachel echoes the sentiment, mentioning the high costs associated with repairs and how these expenses often require budget adjustments (22:03). These stories underscore the importance of being prepared for the ongoing responsibilities of owning a home.

10. Resale Value: Upgrades That Lose/Add Value

A fun segment explores which home upgrades can either diminish or enhance resale value. George and Rachel list several modifications:

• Upgrades That Could Lose Value:

  • Specific and Custom Decor: “a giant wall mural, weird wallpaper, bright paint colors” (24:51)
  • New Carpet: Tends to go out of style quickly and requires replacement (26:03)
  • Eliminating Versatility: Removing flexibility in home design, like converting garages into specialized spaces (26:03)
  • Adding a Pool: Often doesn’t provide a good return on investment in average neighborhoods (26:52)

• Upgrades That Add Value:

  • Neutral Decorations: Light paint colors and classic fixtures appeal to a broader audience (27:48)
  • Tile or Hardwood Flooring: Timeless flooring choices are universally appreciated (28:25)
  • Updated Bathrooms and Kitchens: Essential areas where modern upgrades attract buyers (28:25)
  • Organization: Features like organized pantries and clean laundry rooms enhance appeal (28:25)

These insights help homeowners make informed decisions about remodeling and investments that align with long-term financial goals.

11. Final Advice: Letting Go of the "Dream Home"

Concluding their discussion, Rachel and George offer profound advice on the psychological aspects of homeownership. George urges listeners to “drop the thought of a dream home” (30:23), emphasizing that perfection is unattainable and flexibility is key. Rachel reinforces this by highlighting the importance of focusing on financial readiness and long-term stability over idealistic aspirations (30:38).

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Guilty as Charged: Home Upgrades Edition

In a lighthearted finale, Rachel and George engage in their "Guilty as Charged" segment, sharing bougie home preferences they've indulged in:

• George's Admission: Softly boasts about installing an epoxy garage floor for aesthetic and practical benefits (34:26).
• Rachel's Confession: Admits to having heated bathroom floors in their master bath, enhancing comfort despite the higher costs (34:17).

They emphasize that as long as these upgrades bring joy without derailing financial goals, personal indulgences in home enhancements are entirely acceptable.

Closing Thoughts

Throughout the episode, Rachel Cruze and George Kamel provide a balanced and compassionate perspective on housing decisions. They acknowledge the emotional weight of homeownership while offering practical strategies to navigate financial challenges. By debunking myths around renting and buying, advocating for financial preparedness, and sharing personal experiences, they empower listeners to make informed and confident housing choices.

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Notable Quotes:

• George Kamel [00:05]: “If you've ever felt like owning a home is impossible, this episode is for you. We hear you, we see you, and we're here for you.”
• Rachel Cruze [00:12]: “I mean, honestly, the difference between a 15 and a 30, it's unbelievable. Like, hundreds of thousands of dollars you're saving.”
• George Kamel [09:11]: “To get rid of that largest fixed expense in your budget is a game changer.”
• Rachel Cruze [30:58]: “That is very freeing.”
• George Kamel [30:23]: “Drop the thought of a dream home. I think it's unhealthy and it causes us to live in this fantasy world.”

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Timestamp Reference Guide:

• 00:16
• 01:26
• 00:18
• 09:09
• 09:37
• 10:16
• 11:24
• 12:19
• 13:25
• 14:02
• 16:17
• 17:38
• 18:32
• 19:07
• 20:56
• 22:03
• 24:51
• 26:03
• 26:52
• 27:48
• 28:25
• 30:23
• 30:38
• 34:26
• 34:17
• 30:58

Note: Timestamps correspond to sections within the transcript provided.

Transcript

[George Camel]

If you've ever felt like owning a home is impossible, this episode is for you. We hear you, we see you, and we're here for you.

[Rachel Cruz]

I mean, honestly, the difference between a 15 and a 30, it's unbelievable. Like, hundreds of thousands of dollars you're saving.

[George Camel]

There's this vibe of like, you're wasting money on rent. Why are you still renting?

[Rachel Cruz]

I'm Rachel Cruz.

[George Camel]

I'm George Camel, and this is SM Money Happy Hour. This is a mocktail our children will be talking about.

[Rachel Cruz]

Wow. Delicious. Well, this is the show where two friends who happen to be money experts talk about what you're talking about. So everything from pop culture, current events, and money.

[George Camel]

But before we get to the content, Rachel, let's talk about what we're sipping on. This is a midnight tart cherry mocktail.

[Rachel Cruz]

Ah. AKA the sleepy girl drink. Right.

[George Camel]

Is that a thing?

[Rachel Cruz]

Because the magnesium, there's something in it that can help you go to sleep.

[George Camel]

You can add magnesium to it. It's the tart cherry juice that is known to help with sleep.

[Rachel Cruz]

There we go.

[George Camel]

I'm here for you.

[Rachel Cruz]

We will talk about that, though.

[George Camel]

We'll give you the rating and reveal the cost per glass at the end of the episode. So stick around for that.

[Rachel Cruz]

Yes. All right, George. According to the U.S. census Bureau, only 37% of Americans have have lived in their homes for more than 10 years.

[George Camel]

Interesting.

[Rachel Cruz]

But recent data also found that more than a third of homeowners plan to stay in their current home forever.

[George Camel]

Can I ask where you fall into that as the Cruz family? How often have you guys moved? Have you ever stayed in a home for 10 years?

[Rachel Cruz]

We've moved. This will be our third. So we were in a condo when we got married, moved to a home. We were there for 10 years, and then we've moved to the home we're in. We've been there for five years, and we will be there. So we say life for the foreseeable future. Yeah. Yeah. Until the kids get out of. Yeah. Till they out of high school or maybe beyond. So. So Charles is five, so I think we'll be there for another 13. Thirteen years.

[George Camel]

Wow.

[Rachel Cruz]

We're very happy. It's great. We're good. And then maybe something different, but I don't see it. I want to always be in a neighborhood. Well, Rachel, today does versus like, on.

[George Camel]

The fat of the land.

[Rachel Cruz]

Listen, I love it. We had a party, like, this weekend, and we were just, like, texting, like, eight neighbors. And everyone comes and brings food, and kids are playing.

[George Camel]

I'm like, you're a social person.

[Rachel Cruz]

Love it. And when all the kids ride their bikes to school, it makes me cry.

[George Camel]

That is really sweet, but.

[Rachel Cruz]

So I want to be with people.

[George Camel]

Yes.

[Rachel Cruz]

I don't have a craving to, like, be on 30 acres by myself.

[George Camel]

But Winston.

[Rachel Cruz]

Winston would be there.

[George Camel]

He'd be fine not seeing another human being. He's fine just seeing creatures. No humans for weeks, Months on, possibly.

[Rachel Cruz]

How about you? How are you, Whitney?

[George Camel]

We have moved every three years on the dot. So we're. Every three years.

[Rachel Cruz]

Every three. That's a lot, George.

[George Camel]

It's a lot.

[Rachel Cruz]

Yeah.

[George Camel]

Trust me, I know. As a guy who hates doing things, I hate moving.

[Rachel Cruz]

And y'all are about to move again.

[George Camel]

Hopefully this will be the last one. Last one for at least until Mia's like, you know, an older. Yes lady. What do you call that?

[Rachel Cruz]

What has caused the moves for you guys?

[George Camel]

Just sort of looking to the future and going, like, every three years. Yeah, look into the future.

[Rachel Cruz]

What do you mean? Like, location, size. Like, give me a reason.

[George Camel]

Location and size and going like, hey, we want to grow our family. We want to have family that comes into town because no one's local. So anytime they come into town, it's like, it's hard. So you can't breathe. Someone's sleeping on an air mattress, you know, and so it's just nice to have more space and to know that we're okay to kind of expand.

[Rachel Cruz]

Totally.

[George Camel]

Like a fish tank, you know?

[Rachel Cruz]

Yes. So as the primary move for you guys been space.

[George Camel]

Space and, like, design and esthetic and, you know, my wife is basically a secret interior designer. She's really into it.

[Rachel Cruz]

And you're artsy, George and I. Yeah, I like. And you're particular.

[George Camel]

I am.

[Rachel Cruz]

Do you know anything about George Camel?

[George Camel]

No. I am the worst. And so in that regard, I do. Like, my. My home is everything to me. Like, if I could not leave home, I would be happy. The fact that I'm here with you. Nightmare. I'm kidding. I'm kidding.

[Rachel Cruz]

The fact of my at work, outside of home.

[George Camel]

Yeah. But, like, if I'm at home, I have no desire to be. Like, I'd love to go somewhere. I'm fine to be at home because I love the space I've created. You know what I mean?

[Rachel Cruz]

Yeah.

[George Camel]

So that's what I want. For everyone listening today.

[Rachel Cruz]

That's fair.

[George Camel]

Do you ever see those memes? It's usually millennials making a joke about the fact that a two bed, one bath condo they barely bought in 2019 will now be Their forever home. Because interest rates skyrocketed.

[Rachel Cruz]

Yes.

[George Camel]

So they have a 3% rate and they're like, well, I can't take on a 7% rate. I'll stay here. I thought this was my kind of step up home. And now it's the forever home.

[Rachel Cruz]

Yeah. They panic in that way, for sure. Which when you run the numbers, yeah, it can feel a little dicey. But also the housing market, there's a lot of conversations around it, and we've never really dissected the housing market on this show.

[George Camel]

No, this is because we try to.

[Rachel Cruz]

Keep it fun, y'all. You know, it's the happy hour. It's like, let's not. Let's talk about fun stuff. And housing market doesn't sound fun.

[George Camel]

When does that come up? At happy hour with your friends. Yes.

[Rachel Cruz]

The bell doesn't ring. Ding, ding.

[George Camel]

Interest rates are at a record high of 7% in the last 10.

[Rachel Cruz]

I'm so excited about that on our happy hour chat. But it's an important conversation to be had and it's one that's very closely tied to your money. So I feel like we need to have it. George, if you're going to have it, have it over happy hour with a.

[George Camel]

We're going to do it and we're going to make it fun. I guarantee you that. So here's the thing. If the housing market feels impossible right now, you're not crazy and you're not alone. So let me just give you this pep talk right now. It's okay to rent. It's okay to feel frustrated with the fact that housing prices have skyrocketed and you've been left on the sidelines wondering, will I ever own a house? So let us encourage you that we believe it's possible for you. We're going to show you a practical, real way to get there.

[Rachel Cruz]

Yes.

[George Camel]

And it's not just a pipe dream.

[Rachel Cruz]

Yeah. And we're take this episode and answer the top money questions we get on Ramsey show because that's the caller driven show that we also host together. And a lot of questions about housing. So we're going to kind of just take those top topics that we hear questions. We're going to dive right in. It's going to be fun. All right, the first one. Are you ready?

[George Camel]

Yeah.

[Rachel Cruz]

The first one is what's so bad about renting?

[George Camel]

Oh, so they've heard this from. I feel like it's mostly parents. I don't know. Societally, there's this vibe of like you're wasting money on Rent. Why are you still renting? You know, you should be buying a house.

[Rachel Cruz]

Bad connotation to some people.

[George Camel]

And to be fair to the younger generations, the boomers are sometimes, and Gen X sometimes a little out of touch when it comes to the realities of housing. Cause they go, well, interest rates are historically low. And I'm like, sure. But housing costs, the actual price of that home has skyrocketed 4, 5, 6 times what it was when you were young and able to buy a house. And so there's a real mathematical equation here to be solved. And that's why I say it's okay if you rent for longer than you would have liked.

[Rachel Cruz]

That's right. Yeah. It is not a bad thing. Honestly, the whole idea of, like, it's throwing money away. I know. It can feel like that. Right. You're just. You're paying a good amount of money. It's not going to.

[George Camel]

For someone else to pay off their mortgage.

[Rachel Cruz]

Yeah. Going to equity, like, I get. I understand that emotion. That makes total sense. But also, you have to realize that home ownership, like, it adds a whole other level of expenses that you're not having to deal with. And so if it's buying time for you to save. All day. All day.

[George Camel]

Especially when you're young, you're newlywed. Like, this happened with my wife and I. We rented an apartment until we were able to buy. And it was so nice to be able to just like, send a text or fill out a form to have someone come and fix the toilet when it was broken while we figured out how to be newlyweds. You know what I mean?

[Rachel Cruz]

Yeah. Well, what toilet issue could you not fix, George?

[George Camel]

I don't know. I don't remember running. No, I don't think it was. I think it was the actual toilet itself was not, like, in place.

[Rachel Cruz]

Well, yeah, that needs to be fixed.

[George Camel]

Yeah. It was nothing major in an apartment, but it was just nice to have all the things dealt with for you.

[Rachel Cruz]

Totally.

[George Camel]

You're not worrying about HOA and property taxes and homeowners.

[Rachel Cruz]

Honestly, and stuff just breaking. Like, half of our roof came off, basically. Not half, but, like, a portion of it during a storm. We had, like, a really bad windstorm. And. Yeah, you have to get insurance, you know, insurance claims, all of this. It's like, replace the whole roof that garage doors messed up, and so we had to do that. I mean, like, there's just.

[George Camel]

It's maybe because you hit it. We don't know what happened.

[Rachel Cruz]

I did hit it, but it wasn't because of that I hit it years ago, but that was an issue. I don't know, it's just things always just keep. They just keep coming up.

[George Camel]

Yeah, My first town home, the H Vac went out and I was like, cool. I don't know. Thousand bucks to get this thing. Nope. It was $6,000 to get a new H vac.

[Rachel Cruz]

I know.

[George Camel]

And like, I had an ice dam. Have you heard of this? Didn't know what an ice dam was until water's pouring out of my bedroom ceiling.

[Rachel Cruz]

But from the condensation, like it all.

[George Camel]

Built up after snow and ice. Apparently it can just start leaking through your ceiling. No. Yeah. Google ice dam. D A M. Family friendly show. But that was a. That was a nightmare to have to deal with and get fixed and pay for and deal with insurance.

[Rachel Cruz]

Renting is not bad. You're okay.

[George Camel]

It's buying patience.

[Rachel Cruz]

But also we get callers that are like, hey, should I just rent forever? Like, why own a home? But it is a part of your budget that is going to continually go up and it's usually the most expensive line item in the budget. So eventually owning a home, paying it off so you don't have that expense going into retirement. That's ideal.

[George Camel]

That's huge. To get rid of that largest fixed expense in your budget is a game changer. So getting your house paid off as part of the Ramsey plan.

[Rachel Cruz]

All right, George, next one. When should I buy?

[George Camel]

Ooh, when you're financially ready.

[Rachel Cruz]

Yeah. And how do we know that?

[George Camel]

Debt free, fully funded emergency fund. And you have a decent down payment. Now, we're okay with 5 to 10% down now, but the key is to get that payment to be a quarter of your take home pay on a 15 year conventional fixed rate. Get a lot of flack for that, understandably, because they go, rachel, are you serious? Have you seen what the. I'll never be able to do that. We're not like, it's not a sin to get a 30 year mortgage. We just can do math and go like, listen, I know it's. Instead of 2 grand, it's gonna be 2,700 on a 15 year. But you're saving hundreds of thousands in interest so much with these crazy interest rates.

[Rachel Cruz]

Yeah. I mean, honestly, the difference between a 15 and a 30, it's unbelievable. Like hundreds of thousands of dollars you're saving and. Yeah, and I know we get calls a lot on the Ramsey show and people kind of bump up that mortgage beyond what we suggest. And they go like 40%, 50%, 60%. Oh, yeah, we get those. But it's like they just go right up to that edge mark where it's a little stressful, but it's okay. And then something happens, and then a job loss, a health scare.

[George Camel]

Like, one person wants to stay at home.

[Rachel Cruz]

Yeah. They have a baby and they're like, my wife doesn't want to go back to work, but we can't afford that. Like, stuff just happens. So when you just live more conservatively, it just gives you peace and margin to make other decisions in your life that you want to make. And so maybe it's not a bigger house. It may not be exactly in the right location. Maybe you're 20 minutes further than you want to be. But, like, it gives you more peace in your overall life. And that's what we want for you. So it's worth that if you have.

[George Camel]

A 27% mortgage of your take home pay. We're not angry at you. There's a level. It's just a parameter. It's just like, this is the healthiest way to go. So you have margin to accomplish all of your other financial goals.

[Rachel Cruz]

That's right. All right, next. Should I wait for the housing bubble to burst?

[George Camel]

Yikes. You're gonna be waiting a long time.

[Rachel Cruz]

We. I don't hear this one as much. I heard it a lot, probably last year. This time last year, 18 months ago.

[George Camel]

And during the pandemic, there was a lot of talk about, it's gonna explode and I'm gonna wait.

[Rachel Cruz]

It was funny because it was like 2020. Everything was like, oh, my gosh. Covid, Covid, Covid. 2021. People are like, we're moving, we're moving. I mean, 21, 22 was insane. Like, everything just like prices skyrocketed, shot up, and everyone was freaked out.

[George Camel]

And then the interest rates started climbing up.

[Rachel Cruz]

And for good reason. Right? It feels like, oh, my gosh, everything is so inflated. These houses are so expensive. They're not worth what people are paying. So it's creating this artificial bubble is what everyone thought. And it's gonna pop. Let me wait and be on the sidelines for two or three years. It'll pop.

[George Camel]

And then it stayed there.

[Rachel Cruz]

Everyone's gonna go into foreclosure, and then I can buy a great deal. And it has stayed. And the reason it has stayed is back to, like, what buyer? The number of buyers.

[George Camel]

Supply and demand.

[Rachel Cruz]

Yes. Versus houses on the market. And there is still. There are a lot of houses on the market, but there are still more buyers than houses.

[George Camel]

There's still a shortage of houses, thanks to a lot of factors.

[Rachel Cruz]

Yep.

[George Camel]

Number one, people don't want to let go of their amazing rate. They have.

[Rachel Cruz]

So they're staying put.

[George Camel]

So they go, I guess we'll stay put.

[Rachel Cruz]

Yes.

[George Camel]

Then on top of that, we haven't caught up on the supply of homes because of the pandemic and, you know, lumber and all these shortages. Builders can't build fast enough.

[Rachel Cruz]

Yeah.

[George Camel]

And so there's still a shortage of homes, which is going to keep prices up. So if you're hoping on the sidelines, holding your breath for home prices to just shoot down, you're going to die if you keep holding your breath.

[Rachel Cruz]

And there were some markets, Austin, Texas, like a couple that kind of re.

[George Camel]

Balanced.

[Rachel Cruz]

Yeah. They rebalanced. They went down a little bit, but it was not like. Like everyone wasn't a crash. Yeah. Everyone thought it was gonna be like, oh, eight again, if you remember. It was. Everyone was expecting that again.

[George Camel]

Well, it was a different issue there with subprime lending. There was a lot of different issues and we're experiencing now. So if you're waiting on the sidelines, do not. That's why we tell people, buy when you're financially ready. Don't wait for some magic housing market to exist. It will not happen.

[Rachel Cruz]

All right, George, ready for the next one? Are HELOCS a good idea?

[George Camel]

Oh, boy. Home equity lines of credit. This is basically using your home equity like a credit card. It's a line of credit attached to your home and it's moving you backwards financially and puts your home at risk with a variable interest rate. So this is a very dangerous game to play. And if we're going to be honest, as we take calls on the Ramsey show, most people are taking out HELOCs to renovate the house.

[Rachel Cruz]

I know. To renovate.

[George Camel]

You know what I mean? They're not doing. They're not like, well, I did it to pay off my debt. Even then we'd say, terrible idea.

[Rachel Cruz]

Yeah.

[George Camel]

But most people are doing this for sort of vanity purposes. And if you can't do it with cash, just wait to do it until you can cash flow it.

[Rachel Cruz]

Yes. Because usually when you're using debt, especially for renovation type issues, you're going to go beyond what you would normally do with cash.

[George Camel]

That's true.

[Rachel Cruz]

And you go nicer than you would have. I mean, it just snowballing. Yes. Into it. And you're like, listen, it's. Yeah. Now.

[George Camel]

And HELOCs are so popular now because everyone gained all this equity in their home in the last few years. And so they're going, hey, we don't have the money, but we could just take out a HELOC against their house. And it's marketed so heavily from lenders and banks going, hey, your home went up in value. We see that. What if we just told you you can take 200 grand out? Terrible idea. Please don't.

[Rachel Cruz]

Take care. That seems great. And also carrot that seems great is just having your information online, George.

[George Camel]

We fill it out willy nilly these days.

[Rachel Cruz]

It is just normal, normalized. Putting your info out into the world and into the public and onto the Internet. And what happens is companies end up selling your data to data brokers and then they end up selling or trading your data and making money sick. We do not like. So delete me is a subscription that they actually go in and remove your personal data from all of these data broker websites. And it's phenomenal because it takes your information out. So scammers, spammers like all of that.

[George Camel]

The robo emails and texts and calls. It's exhausting.

[Rachel Cruz]

It is. So delete me goes in and removes your data and it's a beautiful thing. So thank you. Delete me because we use it and we love it.

[George Camel]

They've removed my info from hundreds of data broker sites and they've saved me 77 hours of time. It would have taken me myself to do all of that. So it's totally worth it for the peace of mind and the time savings. And if you want to check them out, they're giving our listeners a sweet discount. 20% off if you go to joindeleteme.com smartmoney so super affordable. Click the link in the show notes if you want to learn more and get started.

[Rachel Cruz]

All right, George, how about house hopping? Is it smart to house hop like people job hopper? Oh. Because this is a trend with jobs.

[George Camel]

Just like stay at a job a year or two, then jump to the next one and get a promotion because.

[Rachel Cruz]

You get promotion, promotion, promotion, promotion. You end up making more if you just keep job hopping is the idea. And then I don't think people that's.

[George Camel]

The same in the house world.

[Rachel Cruz]

I don't think it is either because.

[George Camel]

You'Re paying pretty intense fees every time you move between closing costs. The realtor, you know.

[Rachel Cruz]

Yeah. You're kind of a house hopper.

[George Camel]

Can I say that I have been accidentally. Because we've moved every three years since we've been married, but it's worked out in our favor.

[Rachel Cruz]

Yeah.

[George Camel]

In this random instance because we number one, that that gap from like 2019 to 2022. Some of the most insane house appreciation.

[Rachel Cruz]

Yeah, I don't really. Yeah.

[George Camel]

Like the house that we bought was not worth what we paid for it on paper. And so I hope that three years later we can sell what we got for it. And so like there's a risk in there. But I would not recommend house hopping because of all the realtor fees, the closing costs.

[Rachel Cruz]

Yes.

[George Camel]

You have to stay long enough to quote ROI on that purchase.

[Rachel Cruz]

For sure. Yeah.

[George Camel]

To cover all of the fees plus profit takes a while. And so that's why we recommend like buying a home is a long term purchase. Five years plus. Now, can you buy and sell within that time frame? Sure. And it can work out.

[Rachel Cruz]

Yeah. But don't let that be your, your housing strategy.

[George Camel]

Yes.

[Rachel Cruz]

You will lose money eventually because like you're saying, it's an anomaly this time period that we're in. And if you did that a lot during this time period, you're probably gonna make some money doing it. But that's not gonna be like that forever. Now the price of our houses is slowly going up. It's more stable, it's going up, but it's very slow. It's not like it was.

[George Camel]

Yeah. On the other side, I don't want people to sit on the sidelines for 15 years trying to get their dream home.

[Rachel Cruz]

I know. Yeah, yeah, yeah.

[George Camel]

Get your foot in the door and get that town home or condo or reasonable single family in an area further out. Like make some compromises to get in the real estate market and then you can upgrade later.

[Rachel Cruz]

Yep. I love it. Okay, we covered this a little bit, but we'll hit these two really quick. How much should my mortgage be in comparison to my income? So we say 25% of your take home pay. So a quarter of it is going to housing and then that means you have 75% left of your income to save. Pay for your life, your necessities like this. Invest. Yeah, I mean, all of it.

[George Camel]

Vacations.

[Rachel Cruz]

Again, we will always say it is a conservative outlook when it comes to housing. I mean, because a lot of people don't do 25%. It is beyond that for sure. But again, what we have found, the more margin you have, the more choices you have with your money. And don't let your house, even though it is a great investment, like being a homeowner is a goal like you want to eventually in your life. That, that should be a goal for everyone, but it should not be the only thing your money goes towards. So like get a smaller home again. Live further out than where you want to be to have the ability to go do more of what you want to do with your income.

[George Camel]

Yes. And can I also say that 25% parameter, that is after tax income before other deductions like health care or your 401k investment. So you can manually do the math, but it should help your numbers out because a lot of people go, rachel, oh my gosh. What ends up in my bank account. Oh, my gosh, I can't do that.

[Rachel Cruz]

Sure. Yeah, yeah, yeah.

[George Camel]

No, remove out the health care premium, remove out the 15% to the 401k, and that will help you go. Okay, it's 25% of after tax income, but before other deductions.

[Rachel Cruz]

Yes. So good. What mortgage is best? You're going to say a balloon mortgage, aren't you, George?

[George Camel]

Oh, I love a balloon.

[Rachel Cruz]

Love a balloon.

[George Camel]

Me and my daughter love balloon.

[Rachel Cruz]

Love an army.

[George Camel]

There's a lot of terrible mortgage options out there. And so the one that we recommend as the best, the creme de la Creme, is the 15 year fixed rate conventional mortgage. And again, if you have a 30 year mortgage, you are still going to go to heaven. We're going to have a great time there. It's not a terrible thing. But we recommend the 15 year because of how much you're going to save in time and in interest.

[Rachel Cruz]

Yes. And it forces you into a plan because a lot of people will take the 30 and just say, I'll pay it like a 15. But again, where are you all at?

[George Camel]

Where y'all at? 15 years later, y'all still paying your mortgages?

[Rachel Cruz]

Just assumes. Yes. That you are on it. Right? It kind of. And I think that's another great thing is when you can automate certain things in your life to force you into, like, good habits. Do it.

[George Camel]

Yes.

[Rachel Cruz]

I think that's great. Right. And like, it's like if your refrigerator could just automatically have the healthy stuff in there, you don't have to shop or worry about, oh, we might do this. My dad. It's just in there.

[George Camel]

It's there.

[Rachel Cruz]

It's great. Like, if you can automate things in your life, that's better for you. Do it.

[George Camel]

Yeah. We know that we're human and, like, left to our own devices, we're probably not going to do the healthiest thing for us all the time.

[Rachel Cruz]

No.

[George Camel]

And so saying you're going to get 30 year, and here's what they say, well, Rachel, I want the wiggle room, so I'm going to do the 30 year. You have an emergency fund. You don't need wiggle room if you do it the Ramsey way. So what we find is the average millionaire in our millionaire study pays off their home in 10.2 years, a decade. And don't worry about the interest rate and the spread. We always say marry the house, date the rate, because you can always refinance later. Rates go down. So don't be as concerned about that. Just get yourself financially ready and just go ahead and get in the market.

[Rachel Cruz]

Yep. All right. Here's a personal question, George. What's one unexpected challenge with homeownership that you learned the hard way?

[George Camel]

Where do you start? I mean, of course, you have the maintenance and repairs. That's something that no one warned you about that, like, you have to deal with that. Not only you have to pay for it, you have to figure out who's the right people to go to in this scenario.

[Rachel Cruz]

Yeah.

[George Camel]

And do I file the claim? Do I go out of pocket? Is this person legitimate? Do they, you know, are they well reviewed? Are they gonna upcharge me? Because I don't know the prices of what repair and labor costs. And so there's a lot of research that goes into it that I was not prepared for. On top of, you know, property taxes and insurance. That's real. And that number can go up. So you're not. Even though you have a fixed principal and interest, your taxes and insurance can go up year to year, for sure. How about you?

[Rachel Cruz]

I think not as much of a challenge because I would have echoed all of that. I think just homeownership is expensive. Like, we had to fix windows or fix whatever. I'm. Like, it costs how. Like, it's just. It is crazy how much things cost. So it just feels very expensive. And I feel like on our everydollar budget, we have a home item, and I just feel like it, like, so much gets put into that category, and we end up having to up it a lot of months because it's just, like, stuff just ends up falling in it. So I don't know. It's expensive. That's what I would say.

[George Camel]

That's a good word.

[Rachel Cruz]

Okay, if you had one house Ick. When you bought your first home, what would it be?

[George Camel]

Oh, there was this, like, pink shag rug in the other two bedrooms that just, like, crushed my soul. So that was the first thing we had to do before move in. Yeah, I was like, we're getting people in here to replace this and put hardwood in.

[Rachel Cruz]

Good.

[George Camel]

And we also replaced the pink shag rug in the bonus room with just new rug, new carpet.

[Rachel Cruz]

That's good.

[George Camel]

So those are the things we decided were worth it. On top of, we had to paint all the walls in the house.

[Rachel Cruz]

Yes.

[George Camel]

We didn't realize. We kind of bought a fixer upper, but, like, I guess dogs had destroyed walls.

[Rachel Cruz]

Oh, gosh.

[George Camel]

There was, like, random holes in the wall. It wasn't like, scratches. Like, I wasn't being ocd. It was bad enough that we had to, like, just repaint everything.

[Rachel Cruz]

Not good.

[George Camel]

So that was a big one for us. How about you?

[Rachel Cruz]

Our kitchen was like a tomato red. Like, when I say tomato red, like the red.

[George Camel]

The cabinets or what?

[Rachel Cruz]

No, the walls.

[George Camel]

The walls were tomato red.

[Rachel Cruz]

Tomato red. But it wasn't a big kitchen at all. So it was just basically, like, the backsplash and like, one wall.

[George Camel]

Okay.

[Rachel Cruz]

And then white cabinets. But it was.

[George Camel]

It's aggressive.

[Rachel Cruz]

Something. It was something. I don't know. Not good.

[George Camel]

Was it the Heinz family? The liver?

[Rachel Cruz]

I mean, literally. It's what? I mean, it was. It was a terrible, terrible red.

[George Camel]

Yeah. But again, these are things that can easily be replaced. When we talk about buying a home and looking past features, think about things that you can easily replace. You hate the carpet. You hate the wall color.

[Rachel Cruz]

Yes.

[George Camel]

Easily replace 100%. If you hate the floor plan, that's going to be a much more expensive fix.

[Rachel Cruz]

Sure. Yeah. Knocking that alone.

[George Camel]

Know that going in.

[Rachel Cruz]

Do you know something that's not tomato red?

[George Camel]

Hit me.

[Rachel Cruz]

My Navy Cozy Earth pajamas.

[George Camel]

That's science, y'all.

[Rachel Cruz]

Cozy Earth. It is just the most beautiful, wonderful stuff.

[George Camel]

No ick there. No all bougie. No ick.

[Rachel Cruz]

If anything, you're just like, can I have it all, please? Give it to me. From the blankets, the sheets, the pajamas, the joggers, the socks, the blankets, everything.

[George Camel]

Mostly the blanket for me.

[Rachel Cruz]

You know, I gave so many Cozy Earth products for Christmas.

[George Camel]

You're such a giver.

[Rachel Cruz]

I know. And then. And then one person went and bought more because they texted me, like, hey, can I get the actual name of what you bought? Because I want to get it in different color. And I was like, that's right. Their stuff is amazing. It really is. Love. Cozy Earth.

[George Camel]

It's the best. And they are giving our listeners a steep discount, up to 40% off if you go to cozyearth.com smartmoney or use the promo code smartmoney at checkout. Let me tell you, no one's been upset. I've never given a Cozy Earth gift. And someone's like, come on.

[Rachel Cruz]

I like this.

[George Camel]

Come on, they're always like, how did he afford this? This is bougie. And so if you want to be bougie, frugal, use promo code, smart money at checkout. All right, Rachel, let's have a little fun. Which we haven't had a lot of this episode, mostly thanks to. I'm kidding.

[Rachel Cruz]

Unbelievable.

[George Camel]

Here's what, here's what I've got. I've got a list of three home upgrades that could lose you money at resale. You have a list of top three home upgrades that could add value at resale.

[Rachel Cruz]

Okay.

[George Camel]

This will help those that are currently homeowners decide, is it worth it?

[Rachel Cruz]

All right, I'm going to do my opinion. Give me your first one.

[George Camel]

Your honest, real opinion. Yeah, we've never heard that on the show. Love to hear it. Okay, here's the number one that could lose you money at resale. Specific and custom decor. Think a giant wall mural, weird wallpaper, bright paint colors, stained glass windows, niche light fixtures. It can't be so specific to you.

[Rachel Cruz]

Yeah.

[George Camel]

Because the other person may not want it 100%.

[Rachel Cruz]

So yeah, for me it's less like wall because you can like repaint something, but if you had like a, you know, two skyscrapers and a. And a bridge across them because you wanted to like classic house. Yeah.

[George Camel]

There's a moat out front, so you got to cross a little.

[Rachel Cruz]

There are some weird houses out there. And that is true it to sell those if they're weird like that. So it's fair.

[George Camel]

That's a good one. I was going to say something more normal. Like when we moved in, there was a chalkboard wall with like industrial pipes and then like barrels.

[Rachel Cruz]

Yeah, but.

[George Camel]

And it was kind of like a. You know.

[Rachel Cruz]

I hear it. But you can replace that stuff though.

[George Camel]

No, it was an easy replace.

[Rachel Cruz]

Yeah. To me it's the big. It's like the weird stuff you walk in.

[George Camel]

Cost a lot of money to do these things. And then someone's going to go in and go, no, we want a discount, cuz we're going to have to change that.

[Rachel Cruz]

Okay, keep going.

[George Camel]

Next one, new carpet. So here's the thing with carpet. Doesn't stay clean, goes out of style quickly. Most people want to replace with hardwood or laminate, which is what we did when we moved in.

[Rachel Cruz]

Yeah, yeah.

[George Camel]

So that one I, I totally get. Okay. If you're gonna do it.

[Rachel Cruz]

We carpeted the kids rooms.

[George Camel]

That's smart.

[Rachel Cruz]

And our playroom, but we did hardwoods everywhere else. But I don't know, kids. There's something cozy about carpet. Like in a room sometimes. I don't know.

[George Camel]

Love a bonus room with carpet. It feels cozy.

[Rachel Cruz]

It does feel cozy. Okay, keep going. I don't know if I agree with that one.

[George Camel]

Here's a weird one. Eliminating versatility. So knocking down a wall and lessening the number of bedrooms. Making all bedrooms have shower stalls instead of leaving a bathtub. So families with young kids. Helpful to have a bathtub.

[Rachel Cruz]

Fair.

[George Camel]

Turning the garage into a recording studio. Things that are so custom.

[Rachel Cruz]

I would agree with that. I would agree with this. I think that's fair.

[George Camel]

Okay.

[Rachel Cruz]

Yep.

[George Camel]

Last one. Adding a pool.

[Rachel Cruz]

Oh, no.

[George Camel]

Especially to average and middle class neighborhoods. Caveat here. Apparently upkeep is expensive. Not worth it to many people. Can be a hazard for folks with young kids and pets. You rarely get the money back you put in during resale.

[Rachel Cruz]

I'm going to. Yeah.

[George Camel]

Is that fair? As someone who just built a pool.

[Rachel Cruz]

I know. And we, you know, it's funny because when we priced out how much it's going to cost and we decided on it and we did it because we knew, like, we want this for our.

[George Camel]

House and you're going to be there a long time, you're going to enjoy it.

[Rachel Cruz]

Yeah. But we knew, like, yeah, it probably would if we had to sell our house today, we finished the pool. What we put in versus what we get out probably isn't comparable. So that's fair.

[George Camel]

But not everything. Can I just say this? Not everything has to be about resale value.

[Rachel Cruz]

George, you're so human. Thank you.

[George Camel]

So human. If you want to do it, do it. Just know that not everything has to have roi for you to enjoy it.

[Rachel Cruz]

Part of life is just enjoying what you like.

[George Camel]

That's on gross.

[Rachel Cruz]

I mean, that is true.

[George Camel]

All right, hit me with some upgrades that are worth the money.

[Rachel Cruz]

Right? Neutral decorations. So light paint colors, neutral kitchen, classic light fixtures, all that. Because I do think if you're someone like me, that's not creative. I walk into a place, into a home, and I'm not. I can't think beyond what I see.

[George Camel]

You see tomato red and you go.

[Rachel Cruz]

I mean, seriously? Yeah. It's very hard for me to, like, look beyond that. So if you do want to sell your home, having neutral for majority of the population, that's not creative and doesn't, like, think outside the box like me when it comes to decorations. It's. It's going to be an easier sell. So I would agree with that.

[George Camel]

Strong.

[Rachel Cruz]

Okay, Next tile or hardwood flooring.

[George Camel]

Smart.

[Rachel Cruz]

Yeah, Very nice. When you walk in hardwood floors yeah.

[George Camel]

No one ever walks in, sees, like, newer hardwood, and goes, ugh, put some carpet on that. Disgusting.

[Rachel Cruz]

Totally. It's so true. It's so true.

[George Camel]

I don't know why, but our parents generation love to put carpet over beautiful hardwood. And now the millennials and Gen Z are trying to rip the carpet up and expose the original hardwood that it's beautiful.

[Rachel Cruz]

What a. And what a story to tell.

[George Camel]

What a story.

[Rachel Cruz]

Say this. This was the original.

[George Camel]

Same people who rescue their pets. Same energy. I rescued this hardwood. Okay, relax, bud, Relax.

[Rachel Cruz]

Just so holy. So okay. I believe in this one. Very deeply updated bathrooms and kitchens. That is, if you're gonna put your money somewhere, put it there, and they.

[George Camel]

Become outdated the fastest. And so it's good to have a. Just a nice, clean, simple, neutral.

[Rachel Cruz]

I love that. And then organization.

[George Camel]

Oh, I didn't think about this.

[Rachel Cruz]

Yeah. So if you have, like, easy ways to organize, like, a beautiful pantry that you can put Ben. Like, things that are easy to look.

[George Camel]

More aesthetically because it's aspirational, people go, I love a laundry room that was actually clean.

[Rachel Cruz]

Yeah.

[George Camel]

A pantry that was organized. A closet that didn't look like a nightmare. People want this fresh start when they move.

[Rachel Cruz]

Yep. And I.

[George Camel]

So it's inspiring. That's the thing. When you set up a home for staging, you want to go. Would that other person go? I can see myself here versus I don't want to see Rachel's life there. I want to see my life.

[Rachel Cruz]

That's right. Look at you. What a realtor you are.

[George Camel]

Love your life, not theirs.

[Rachel Cruz]

Unbelievable.

[George Camel]

Someone should write that book.

[Rachel Cruz]

Unbelievable. All right, you guys. So the housing market, there's a lot here. I'm glad we covered it, because there's a lot. There's a lot to this. There's a lot of emotion. It's a big deal. It's the largest purchase majority of people make in their lifetime. So you want to be wise about it. But I do think there is always a plan towards it and that it's possible. And then when you have it, you pay it off. And then you don't have a mortgage, but you still pay property tax.

[George Camel]

Beautifully said. And here's my final thought. Drop the thought of a dream home. I think it's unhealthy and it causes us to live in this fantasy world.

[Rachel Cruz]

Yes.

[George Camel]

There's no such thing as dreamo. Even the home that you build from scratch to your own, it's still going to have its issues.

[Rachel Cruz]

Yes. Yes.

[George Camel]

And you won't stay there forever. Wherever you think you're going to stay forever is a lie. We are not Grandma and Grandpa. We're not living in the Great Depression. We move around, we upgrade houses, we switch towns, we do all kinds of things. And so I think just letting go of this idea, there has to be one home that we're in forever and we love will just free us emotionally and mentally.

[Rachel Cruz]

I like that, George. It's very freeing.

[George Camel]

It's the first thing she's ever liked that I said.

[Rachel Cruz]

That is very freeing. I like that. So good. All right, before we spill the tea on our guilty as charged, tell us about our mocktail. It's actually delicious.

[George Camel]

This is a midnight tart cherry mocktail, AKA Sleepy girl mocktail, because you can add magnesium and make it a real, I don't know, midnight feels light to be going to bed for anyone.

[Rachel Cruz]

What are you? I'm a 9pm er.

[George Camel]

In bed by nine lights out or.

[Rachel Cruz]

I'm in bed by 8:30 and, like, ready for bed. Yeah. Sometimes we'll watch something. I'll read.

[George Camel]

What a treat. I'm a. I'm a 9:30 tener.

[Rachel Cruz]

Okay.

[George Camel]

If I'm not lights out by 10:30, there's serious issues. Yeah.

[Rachel Cruz]

Do you and Whitney go to bed together?

[George Camel]

We do, yeah. Yeah. Mostly one of us yells at each other because the phone light is too bright in pitch black. Like, go to bed, go to bed. I'm like, what are you doing?

[Rachel Cruz]

I can't see.

[George Camel]

You're gonna hate yourself in the morning. So it's usually that level of, oh, that's great. That's love. That's love.

[Rachel Cruz]

That is love. That is love.

[George Camel]

So the midnight tart Cherry mocktail costs $1.85 to make. Not bad. It's got tart cherry juice, which is the most expensive ingredient, Lime juice and zest. It's got honey or maple syrup, your choice, vanilla extract and Celtic sea salt. And then some sparkling water to add some zip to it.

[Rachel Cruz]

Yeah, I appreciate it.

[George Camel]

This is a 10 out of 10 drink for me.

[Rachel Cruz]

I think I. I'll go nine out of 10. It's a little tart.

[George Camel]

If you don't like tart, why would you drink a tart cherry juice mocktail? I don't know. That's on you.

[Rachel Cruz]

I don't know, but it's still. It's sweet and good, but very good.

[George Camel]

So if you want to check it out, the recipe is in the show notes. Make it at home for the whole family.

[Rachel Cruz]

All right, now it's time for guilty as charged. And this is where our producer, Kelly gives Us a new guilty charge question every week. And if we're guilty, take a sip. Kelly, what is one bougie home preference.

[George Camel]

That people judge you for? Oh, gosh. Why? I mean, yeah, I'm guilty. I've been judged. Judgment is a strong word. I can think of one for you.

[Rachel Cruz]

I have two in my head.

[George Camel]

Oh, wow. Please share both. This is juicy.

[Rachel Cruz]

One was me, one was Winston, but I appreciate both.

[George Camel]

Rock garden.

[Rachel Cruz]

Okay. No, no.

[George Camel]

I judge Winston for the rock art. I still don't know what he's doing to all these rocks.

[Rachel Cruz]

Get ready. You'll see it. There's boulders in our backyard right now. Mine was heated. Bathroom floors in our master bath when we built.

[George Camel]

Can I tell you, any judgment is envy on that one.

[Rachel Cruz]

There's no real judgment. And then we step into our shower. It's obviously not heated, and you go from, like, warm to cold. That's what I could be on, you know?

[George Camel]

So is there a switch? Is it just one setting, or it's on constantly. Oh, it's constantly on.

[Rachel Cruz]

No way to turn on 85 degrees. Wow. It's just so warm.

[George Camel]

That is luxury.

[Rachel Cruz]

It's great. We love it. And then Winston's, which I appreciate now. He bought nice garage doors, which we joke because they have broke, but they're fine now. They're very quiet. Very quiet garage doors. And I appreciate it. I don't even know that they're opening.

[George Camel]

Yep.

[Rachel Cruz]

Where I grew up with, like. And the whole house, it kind of shakes. You know what I mean?

[George Camel]

Well, like, our daughter's bedroom is, like, attached to the garage wall. And so when the garage closes during nap time, I'm on pins and needles.

[Rachel Cruz]

Yeah, that's tough. That's tough.

[George Camel]

So I look forward to an ultra.

[Rachel Cruz]

Winston got some nice garage doors.

[George Camel]

Respect.

[Rachel Cruz]

And it's. And I appreciate them. So those were. Those were bougie. Two bougie things. How about you?

[George Camel]

When we moved in, we did the epoxy garage floor. You know, it's like the speckled.

[Rachel Cruz]

You love that floor, George.

[George Camel]

I don't know why, but part of it is just like a garage and just, like, gray with, like, cracks in it, and there's, like, oil spills. And this one is just perfect. It's super easy to clean. It feel like I want to hang out in there. You know, if I ever had a man cave one day, be like, there's that nice drawers, the boys would be like, dang. This is what's up.

[Rachel Cruz]

That's fair.

[George Camel]

If I ever have friends one day, Winston.

[Rachel Cruz]

And you can hang out in the garages. White garage doors and garage doors.

[George Camel]

Is that aspirational or is that an inlay? Is that a threat or a promise? That's what I want to know.

[Rachel Cruz]

Winston would love to hang with you, George.

[George Camel]

You got. You're an epoxy family, right?

[Rachel Cruz]

We are.

[George Camel]

See, I want to live like the cruises. I know comparison is the thief of joy, but in this case, it's just joy. All right, that's all for today. That's all. I'm gonna stop there. But it's fun. You know what? I don't care. Here's the thing. This idea of people judging you, it's your house in your life. I'm not like, constantly Instagram. I've never Instagram my garage floor.

[Rachel Cruz]

No, I've never sat by my garage.

[George Camel]

So here's the thing. If it makes you happy and you pay cash for it and it doesn't derail your financial goals, I don't give a rip what anyone thinks about it.

[Rachel Cruz]

Good for you, George. That's the energy we need.

[George Camel]

And that's on growth.

[Rachel Cruz]

That is growth. Good therapy to your therapist. Well done.

[George Camel]

I feel therapized. Thank you.

[Rachel Cruz]

Yeah. So good. Well, you guys, if you enjoyed this episode, make sure to check out our harmless purchases that will drain your bank account. That is coming up next. And make sure to subscribe so you don't miss an all new episode of Smart Money Happy Hour.