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The Ramsey Show Highlights

The Solution to the Rent Problem (It's Not Debt)

The Ramsey Show Highlights

Ramsey Network

Self-improvement, Education, Investing, Business

4.6682 Ratings

🗓️ 5 June 2024

⏱️ 10 minutes

🧾️ Download transcript

Summary

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Transcript

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0:00.0

Brought to you by the Every Dollar app. Start budgeting for free today. Jade, you sent us this article that it piqued my interest, and I think the listeners can learn something from it. So would you regale us the tale? Yeah, it all started. I did a media deal on that show on Fox, the bottom line. Yeah. And so it kind of came as a result of this.

0:21.3

It's this Wall Street Journal, I believe, saying Gen Z sinks deeper in debt.

0:25.6

And it's all about how Gen Z is facing kind of this debt to income ratio, rent to income ratio.

0:32.3

And, you know, we hear the frustrations that people are facing all the time with what they're earning versus what

0:38.1

their lifestyle needs. You know what I mean? The needs of their lifestyle. And so I thought this

0:43.8

was interesting. It says the median annual wage for recent college grads was 60,000 in 2023. And at the

0:51.3

same time, rent, which typically takes up less than one third of the average

0:56.1

workers' monthly paycheck has actually soared. And so they give the numbers here. They say the median

1:01.3

rent in the U.S. was about $1987 as of January, which is a 22% increase over the past four years.

1:08.6

And so as a result, Gen Z is saying, listen, our wages aren't

1:12.9

keeping up with what the rent is and it's becoming too great of a percentage of our take-home pay.

1:18.1

And so as a result, we're seeing people, as always, George, whenever there's that strain,

1:22.1

people go to credit cards and they go to debt to fill the gap. And so I thought it was interesting.

1:26.8

As I was reading it,

1:27.6

sometimes you read numbers and they just kind of float around in your head. I was like, let me just

1:31.1

run these numbers out a little bit. And let me see what this actually looks like. Because the fact

1:35.2

is, even if you're not a recent grad, even if you're not a Gen Z, but if you're out there,

1:39.5

you're making around 60K and you're renting, this kind of does apply to you because you're feeling that strain

1:45.0

and you're feeling that stress on your budget. So let's see how these numbers shake out.

1:49.9

So if you are making $60,000 a year, the median rent is $1,928. That person, that rent is far,

1:59.0

it far exceeds that that range that we're looking for. Usually your rent

2:03.4

would be about a third of your take home pay, which is a little on the steep side. That's why people

...

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