I Feel Ashamed of Living in a Mobile Home

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: I Feel Ashamed of Living in a Mobile Home
Release Date: December 27, 2024
Host/Author: Ramsey Network

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Introduction

In the December 27, 2024 episode of The Ramsey Show Highlights, Philip reaches out to discuss his current living situation and the feelings of shame he experiences living in a mobile home. Despite earning a respectable income, Philip grapples with the stigma associated with mobile home ownership, especially after overcoming personal challenges and securing sole custody of his children post-divorce. Hosts Dave Ramsey and Chris provide guidance on navigating these emotions and offer practical financial advice to help Philip transition to a more stable and appreciating housing situation.

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Caller's Background

Philip’s Situation:

• Age: 35
• Income: $86,000 annually
• Living Arrangement: Fully paid mobile home gifted by his parents, situated on family-owned land.
• Family: Sole custody of his children post-divorce, living with them full-time.
• Debt: $15,000 remaining on a truck.
• Savings: $22,000 in his savings account.

Emotional Context: Philip expresses feelings of shame about living in a mobile home, despite it being fully paid and having been a temporary solution during a challenging period following his divorce and custody battle.

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Current Financial Situation

• Mobile Home Details:
  • Ownership: Philip owns the mobile home outright, valued at approximately $4,000.
  • Land: The mobile home is situated on his parents' land, which they own. The land itself is not part of the title Philip holds.
• Financial Health:
  • Savings: Philip has diligently maxed out his 401(k) and Roth IRA, accumulating about $22,000.
  • Debt: The sole debt is a $15,000 truck loan.
  • Expenses: Minimal expenses beyond the light bill, thanks to living in the mobile home rent-free.

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Dave Ramsey's Analysis and Advice

Recognizing the Temporary Solution: Dave acknowledges the mobile home as a "soft landing spot" that provided Philip with stability during a tumultuous time ([00:12]). He emphasizes gratitude towards Philip’s parents for offering a supportive environment but underscores the importance of planning for the future.

Long-Term Financial Planning: Dave advises that while the mobile home is beneficial in the present, it isn’t a sustainable long-term solution. He states, “But it does not take you where you want to be ten years from now” ([01:32]). The goal should be to invest in a property that appreciates over time, thereby building wealth.

Actionable Steps:

1. Debt Elimination: Dave urges Philip to “write a check and pay it off today” concerning the truck ([02:49]).
2. Emergency Fund: Build a 3-6 months’ worth of expenses as an emergency fund.
3. Down Payment Savings: Temporarily pause contributions to the 401(k) and Roth IRA to focus on saving for a substantial down payment on a home that will increase in value.
4. Selling the Mobile Home: Once finances are in order, Philip should either sell the mobile home or return it to his parents, allowing him to invest in property that appreciates.

Property Considerations: Dave inquires about the extent of the land his parents own to assess potential future real estate opportunities ([03:07]). He advises consulting with his parents, leveraging their property management expertise to make informed decisions about future investments.

Investment Philosophy: Dave emphasizes the importance of investing in assets that grow in value. He distinguishes mobile homes from traditional homes by highlighting that mobile homes depreciate, similar to cars, whereas land typically appreciates ([05:03]).

Notable Quotes:

• “You want to buy something that goes up in value and you own the dirt.” – Dave Ramsey ([02:05])
• “Mobile homes do not appreciate in value like standard homes.” – Dave Ramsey ([05:58])

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Supportive Remarks from Chris

Chris complements Dave’s advice by addressing the emotional aspects of Philip’s situation:

• No Shame in the Situation: “There's no reason to be ashamed... You don't need to feel that way” ([02:12]).
• Encouragement to Move Forward: “Figure out what do we got to do to move forward” ([02:18]).
• Affirming Philip’s Efforts: “He’s a natural born saver” and “He’s paying attention” ([04:51], [04:54]).

Chris reinforces the significance of the Ramsey Network’s baby steps, highlighting how following them can transform Philip’s financial future.

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Key Takeaways and Conclusion

1. Gratitude and Acknowledgment: Appreciate the temporary support from family while recognizing the need for self-sufficiency.
2. Debt Elimination: Prioritize paying off high-interest debts to free up resources for savings.
3. Strategic Savings: Redirect savings from debt payments to building an emergency fund and saving for a down payment.
4. Investing in Appreciating Assets: Transition from depreciating assets like mobile homes to appreciating ones like traditional homes.
5. Emotional Resilience: Overcome feelings of shame by focusing on long-term financial goals and stability.

Dave and Chris conclude by reiterating the importance of making informed financial decisions that align with long-term wealth-building strategies. They encourage Philip—and listeners in similar situations—to take actionable steps towards financial independence and to embrace the supportive community within the Ramsey Network.

Final Notable Quote: “This is not a class warfare thing... It's a simple math thing.” – Dave Ramsey ([05:58])

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This episode serves as a valuable guide for individuals grappling with similar feelings of inadequacy regarding their housing situation. By blending practical financial advice with emotional support, The Ramsey Show Highlights empowers listeners to make decisions that foster both financial health and personal well-being.

Transcript

[Dave Ramsey]

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[Philip]

Today I am debating if I should buy a house. I currently own a mobile home that I was given to me for my family and I have it on family land. After my divorce, I kind of had to restart over and after a long battle, I was finally awarded sole custody of my kids. But my kids are with me full time. But I live on in a mobile home right now that, I mean, but it's fully paid for. It's mine. But I feel kind of a little bit ashamed of it because. I know, because I make good money. And what do you make? I make about 86,000 a year.

[Dave Ramsey]

Okay. All right. And the land that it's on is not yours?

[Philip]

It's my parents parents land. They have multiple properties in the area.

[Dave Ramsey]

And someone gave you the mobile home?

[Philip]

Yes, my parents, they.

[Dave Ramsey]

Oh, they did. So they had a mobile home sitting on their land and they said, hey, while you're going through a hard time, move into it.

[Philip]

Yes, they gave it to me and gave me the title for it and everything.

[Dave Ramsey]

But they did not give you the title for the land.

[Philip]

Not for the land, just a mobile home.

[Dave Ramsey]

Right. Okay. All right. How old are you?

[Philip]

I am 35.

[Dave Ramsey]

Okay. Hey, you've been through hell and you needed a soft spot to land on, you found a soft spot to land. That's not a bad landing spot. That doesn't mean we want to stay there. But it's not. It's a nice thing that you're landed there. Okay.

[Philip]

And I spent the lessons. I don't really pay. The only thing I pay here is the light bill.

[Dave Ramsey]

Again, it's a soft landing spot. That's kind of nice. However, it does not take you where you want to be ten years from now. Ten years from now, you don't want to be owning an ancient, rotting down mobile home on someone else's land. So this doesn't project well into the future, even though it's a very nice gift into the present. Does that make sense?

[Philip]

Yes.

[Dave Ramsey]

So we can be very grateful to mom and dad. I'm grateful to them. I think what they do is very nice. But it is not your ten year plan. Okay.

[Philip]

Okay.

[Dave Ramsey]

You want to buy something that goes up in value and you own the dirt.

[Philip]

Yeah.

[Dave Ramsey]

That's your long term plan.

[Chris]

There's no reason to be ashamed.

[Dave Ramsey]

There's nothing to be ashamed about.

[Chris]

We can feel that on you. And you don't need to feel that way. You've been through a fight.

[Dave Ramsey]

Yeah.

[Chris]

So throw your shoulders back here and figure out what do we got to do to move forward. But your kids don't care about the mobile home.

[Dave Ramsey]

No, I'm not ashamed of it. It's a nice thing, but again, it's not your long term plan. Not because of shame, but just because of math.

[Philip]

And so I spent the last year kind of just maxing out my 401k, maxing out my Roth IRA. I was able to save about 22,000 in my savings account. The only debt I have is just a truck that I owe about 15,000 on.

[Dave Ramsey]

Write a check and pay it off today.

[Philip]

Okay.

[Dave Ramsey]

Now save up a good down pay or save up a good emergency fund of three to six months of expenses and then start and stop your 401k temporarily and start saving up for a good strong down payment on a house that's going to go up in value.

[Philip]

Okay?

[Dave Ramsey]

All right. Now, how much land does your mom and dad have total?

[Philip]

I would say about 15. The one I'm on right now is 2 acres, but they have 2 acres in different properties here and there. They have property managed. They own a property management company.

[Dave Ramsey]

Is this property that you're on adjacent to their home? No, it's a standalone property.

[Philip]

Yes.

[Dave Ramsey]

Okay. All right. Well, I mean, just talk to them about. If they're in property management, they know that this is not going up in value and that you don't own the dirt. And so mom and dad, I'm going to start saving for a down payment on a home, which means I'm going to be selling off the mobile home or giving it back to you. One of the two. What's it worth, do you think?

[Philip]

I would say about 4,000. It's not.

[Dave Ramsey]

Okay, just give it back to. Just give it back to him when you get ready to leave. Because they were renting it out before, weren't they?

[Philip]

Yes.

[Dave Ramsey]

Yeah. You don't mess up the rental property by dragging that thing off. So just, just when you get ready to leave, just say, hey, I'm going to save up money and I'm going to go buy a house. But thank you so much for letting me land here on your rental property for a little bit. And I'm gonna give you the title of this back when I leave. Okay? But thank y'all so much and just be very grateful because you should be. It was a very nice thing they did. Yeah, but it's not your long term plan that, that it can be both things. It can be a nice thing and not the long term plan. And no shame is in either thing. Is that okay?

[Philip]

Yes. Appreciate that.

[Dave Ramsey]

You're a good guy, man. You're making good money. You fought for your kids. You landed in it. You got good family that helped you land on a soft spot. That's nice, man. There's a lot of good. There's a lot of good in this story, Philip.

[Philip]

Thank you. I've been blessed.

[Dave Ramsey]

But you have been in the middle of a dadgum tragedy. You know, you did. It's good.

[Chris]

And he saved up 22,000 he's giving himself.

[Dave Ramsey]

So he's paying attention.

[Chris]

That's right. And now he's going to get a massive raise when he pays the truck off today.

[Dave Ramsey]

Exactly. Oh, I forgot about that little detail.

[Chris]

We want that.

[Dave Ramsey]

It's a big deal, Dave.

[Chris]

We got a lot of new people all the time joining in. I think this is a. This would be a good refresher here of why we tell people if they're not familiar with the baby steps or they've just joined us in his situation, it's going to change his life if he actually gets in order and does them the right way. That's why we're telling him to cut it today. Cut the payment today. Write a check, get rid of the truck.

[Dave Ramsey]

Yeah, well, I mean, all that money that you're. You're wasting on that truck payment goes to build up savings really fast. And this guy's a natural born saver.

[Chris]

Yeah.

[Dave Ramsey]

Partly because he's been through hell and he's real careful. Right. But I mean, just accentuated his nature is what it did. And so just lean into that and go, okay, now I don't have a truck payment. Now I don't have a mobile home payment because mom and dad gave it to me. I'm living here. All I got is utilities and I'm making 85k. I got to feed some kids. And other than that, let's go to town, baby. Boom, boom, boom, boom. As fast as he saved 22, he's going to save 52.

[Chris]

That's right. And that's where he gets the house.

[Dave Ramsey]

Yeah, big time.

[Chris]

That's the magic of the baby steps. Right?

[Dave Ramsey]

Big time. And listen, there is nothing snobbish about a couple of guys in Tennessee being telling you not to do mobile homes. Okay? It's nothing about that at all. It's not. It's not a class warfare thing. It's not anything. It's a simple math thing. They go down in value. When you put your money and things that go down in value, it makes you poorer. Why is this hard So a mobile home is like a car you sleep in. It goes down in value. And so you don't go buy a $55,000 mobile home and then look up 10 years later and it's worth $10,000 and wonder why you're broke. People don't do that. Buy something that goes up in value. You're better off to rent. At least you're not losing while you're paying payments. When you pay payments on a mobile home, you're paying the payment and you're losing the values. Like when you're paying payments on a car and it's going down in value. So, you know, I got a friend that's in the mobile home business. Dude, would you quit trashing mobile homes? I was like, oh, trash mobile home. It's not a personal thing, dude. It's simple. When you start making one that goes up in value, I'll advertise for you. But until then, we're not going to talk about it. We're going to. I'm going to tell people, put money, it goes up. You know, my grandpa said I put money. I was bragging about my car when I was in college. And he's like, what's that? And I said, well, it's kind of like an investment. He goes, honey, my investments go up. You know, well, duh, right? And that's the thing. So you really want to have investments like your personal residence going up in. In value. And the problem with stinking mobile home is they set it on a piece of dirt and the piece of dirt goes up in value faster than the mobile home goes down. So it gives you the illusion you made money. You didn't. The dirt just saved you from your stupidity. So don't buy mobile homes now. He didn't buy one. Mom and daddy gave him a whole $4,000 one. This is not a. You know, this is not. They didn't give him the Taj Mahal of mobile homes for sure. But that's the deal, guys. It's real simple. That's why we tell people to do that. Go buy things that go up in value. This is what rich people do. That's how they became rich people. And that's how they get rich get richer and the poor get poorer. Create your free every dollar budget today. The simplest way to budget for your life.