A 22-year-old Gen Z named Nick called into Dave Ramsey’s show asking the financial guru’s advice. The caller explained he was living at home with an annual income of $15,000. He also shared that he had managed to save $3,000 and had $43,000 invested — the majority in individual stocks. He asked Ramsey what kind of retirement account he should open.
Instead of going over retirement account options, Ramsey advised Nick to put a pause on retirement contributions — at least temporarily. Instead, Ramsey said that he should prioritize saving money to move out and get his career going. Then once he accomplished those goals, Ramsey said he could start investing 15% of his income toward retirement. Ramsey recommended a Roth IRA with growth stock mutual funds.
But Ramsey also told Nick that he needed to get his own place, so he wouldn’t be living in his mother’s basement at 28.
Here’s an expert’s take on whether Ramsey’s advice is the right move.
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Is Ramsey’s Advice Realistic for Gen Z?
Alex Mendel, a real estate agent with KW Innovations, servicing Boca Raton and the Palm Beaches, Florida, said that in 2025, Gen Z is facing some of the most challenging financial hardships in decades. He explained that the national average cost of rent is around $2,050 per month, while the average mortgage payment is closer to $2,200-$2,300. He also pointed out that homeowners face additional monthly costs, like insurance, property taxes and homeowners association (HOA) fees, which can be $200-$300 each.
“With interest rates hovering near 6%-7%, record home prices and rising costs from inflation, many young adults feel they must choose between continuing to rent while focusing on retirement savings, or redirecting their efforts toward achieving homeownership,” he said.
Mendel said that he recently worked with a Gen Z professional in his mid-20s who was paying $2,200 in rent, contributing about 10% of his salary to retirement and struggling to save for a down payment on a home.
“By temporarily shifting more focus toward saving for a home, he was able within a year to purchase a condo for $325,000 with a manageable monthly payment,” explained Mendel. “Instead of paying over $26,000 a year toward rent with no return, he now owns an asset projected to appreciate by $50,000 to $60,000 in five years.”
Mendel acknowledged that delaying retirement savings can cause the loss of some of the compounding growth, and it should only be used as a temporary adjustment, not a long-term strategy.
“While affordability challenges are real, homeownership remains achievable for Gen Z buyers who approach the process strategically,” he said. “For example, starting with a $250,000 condo in Fort Lauderdale instead of waiting to buy a $600,000 single-family home in Boca Raton, relocating from Miami to more affordable markets like Port St. Lucie or Cape Coral, or using programs like Federal Housing Administration (FHA) loans with 3.5% down to get into the market sooner. I also see many buyers pooling family resources for down payments or turning to house hacking, such as renting out a spare bedroom, to help cover monthly costs.”
See More: 25 Places To Buy a Home If You Want It To Gain Value
The Takeaway
Mendel concluded that Ramsey’s advice is workable in today’s market if approached in the right way.
“Expert guidance makes the difference between sacrificing retirement growth unnecessarily and using a temporary pause to unlock the stability of homeownership,” he said. “I often tell clients, ‘Retirement investing is critical, but if you are already spending thousands each year on rent, redirecting those dollars toward ownership can set the foundation for both wealth and security.'”
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This article originally appeared on GOBankingRates.com: Here’s Dave Ramsey’s No. 1 Piece of Advice to a Gen Z Investor
