Dear Dave,

I just became debt-free, and I live in an apartment. I’m also 28 and single, and I make about $75,000 a year. Do you think I should get a mortgage and go back into debt, or save up and pay cash for a house? I’d like to keep the price of a new home around $200,000, and I think I can save about $15,000 a year.

Kevin

Dear Kevin,

Congratulations on becoming debt-free! It feels awesome, doesn’t it?

When it comes to saving, how about rounding that figure up to $20,000 a year? Going that route, you’re only 10 years away from a nice, new paid-for home, and you’re still debt-free. That’s one way to do it.

I don’t borrow money, Kevin. And I don’t tell people to do things I won’t do. The one exception to that is I don’t yell at people for taking out a 15-year, fixed-rate mortgage, where the payments are no more than 25 per cent of your monthly take home pay. You could save like crazy for a couple of years and put down a really strong down payment on a home in the price range you’re talking about. Then, you could pay off that house in 15 years max — or even sooner.

I don’t have a big problem with it either way. But wouldn’t it be great to be only 38 years old and still be completely debt-free?

—Dave

* Dave Ramsey is America’s trusted voice on money and business. He has authored five New York Times best-selling books. The Dave Ramsey Show is heard by more than 8.5 million listeners each week on more than 550 radio stations. Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.