The Rachel Cruze Show - How to Never Pay Full Price Again with Dave Ramsey

Episode Date: November 27, 2023

I love a deal, but I don’t love haggling for one. It’s not hard—you just have to know how. And no one knows how to get a deal better than Dave Ramsey! Today, Dave’s sharing the do’s and don���ts of negotiation, you’ll learn what not to say when you walk into a car dealership, and I’ll tell you why I don’t play the points game when it comes to travel.   What you get in this episode: ·     How to Never Pay Full Price Again with Dave Ramsey ·     Things You Should Avoid Saying When Buying a Car ·     Travel Hacking: Why It’s Not for Me   Helpful Resources:  ·     Buy, sell or maintain a car with the Ramsey Car Guide. ·     Hear more from Dave Ramsey on The Ramsey Show. ·     Check out Financial Peace University, the fastest way to beat debt and build wealth. ·     Start budgeting for free with EveryDollar. ·      Learn more about Christian Healthcare Ministries. ·      Try BetterHelp today. Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries and BetterHelp.   Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Is it really possible to travel for free using points? And I know a lot of people have very strong feelings about this, but it is possible to choose something different than what credit card companies or airline companies are trying to sell you. Hey guys, welcome to this episode of the Rachel Cruise Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about how to never pay full price for an item again. And we're going to talk about travel hacking.

You may have heard of it before, but I have some serious thoughts on this and how it's impacting your wallet. Then I'll go over what not to say when buying a car. But first, I'm bringing on to the show a special guest to talk through the best ways to negotiate everything from a large purchase to a small one. And that is my dad, Dave Ramsey. So take a listen. I'm so excited about this episode because I'm joined by finance expert host of The Ramsey Show and my dad, Dave Ramsey. Hey, Dad. Good to be back.

Okay, so a month or two ago, George Campbell and I did an episode on negotiation on our podcast, Smart Money Happy Hour. And it did great because George and I went back and forth on this role play where he, like, was trying to sell me a boat. And it was great. It was awesome because there's a lot to learn about negotiation. And so I realized, oh, my gosh, I feel more awkward in asking for a deal or just trying to, like, play the game of negotiation. George loves it. You love it. I feel like growing up.

That's like part of, though, being wise with money, especially if you're on a tight budget, you're like, oh, yeah, yeah, we're going to go in and ask for a deal. And you still, I feel like, with cars and different stuff, right? You still, like, negotiate. Yeah, I ask for a deal all the time, sure. Not because I'm a cheap skate, but just because it's part of the rhythm of being a noble hillbilly, you're supposed to get a deal. I know.

Because growing up, do you feel like you did it more when you guys were tight with money? Like, if you had to walk in and buy a washer and dryer, were you more apt to, like, no, no, we have to get this deal. Like, what did that look like? Yeah, probably. I guess we were tighter on money, so we were more careful with every little thing than we might be a little sloppy today on, you know, not every single thing. But, you know, my mindset is always, you know, just ask, you know, is there a promo code? Is there a coupon? Is there a deal? Are you getting ready to put this on sale this weekend? And because, you know, these stores in particular, if you're dealing with that, they're like job is to sell stuff. So they like, they like. They like. to sell stuff. So it's a blessing to them if we buy stuff. So it's always good to just try to see if there's something that motivates us to step into the deal right then. Yeah. How, okay, like out of like 10 times you ask for a deal, how often do you actually get one, do you think? I almost always get

something. Do you think it's because it's you? No. You think like just asking for it? No, it's just, you know, honestly, because it's me, I get one thing or the other. I either get, like, they got their dukes up, like, I'm going to, you know, I'm going to fight Dave. all the money I can out of this guy. I don't want Dave Ramsey's always looking for a deal. Or they're like, oh, he's got plenty of money. I'm going to take every bit he's got. Yes, yes.

So we get some of that too. Totally. But most of the time when we're just dealing with regular folks in a regular transaction and they're treating us like regular folks. Right. Then it's just like, guys, you know, that doesn't work. You know, let's figure out a way that this works. See, that even makes me in her face.

Okay, well, we're going to get into it. Okay, so he's going to be walking us through four steps to a successful negotiation. Plus, he's going to share some of his biggest dues and don't when it comes to this topic. All right, let's set up the first scene. Okay, I'm walking in to an appliance store. I got to buy a dryer. Our dryer broke. I need to buy a dryer.

So my first question to you is, do I ask for help or do I just mosey the aisles and not look desperate and see if they come up to me? Oh, I don't think it matters. It doesn't matter at all. That's not going to affect it. You know, it's just whether the salesperson in that particular store is empowered to change prices. If they're not empowered, then you're going to have to talk to a salesperson and whoever their leader is, whoever the manager is in the store. So you could ask for help or have them come to you. Either way, there's not a power. No, because, you know, this is not a conflict. This is a pleasant

experience. They're making money and I'm buying a dryer. It's a pleasant experience. All the way around. Okay. Okay. So then, again, you mentioned it earlier. You know, if you're talking to the 24-year-old sales guy, would you automatically be like, hey, can you grab your manager? I'd love to, you know, bring him in. Would you offer that, or are you good just going back and forth with the sales guy? I just ask them. I just say, listen, you know, we're going to have to do something different than we're doing right here in order for me to get the dryer because this isn't working.

Can you pull that off or do we need to, like, bring in your leader, your manager? And it's okay with me either way, but, you know, what we're doing right here is not going to work. So we're going to have to take it to another level. Yeah. And in order to do that, do you have, can you do? that and they're like sometimes they'll go okay you know and they've got the power to mark i didn't tell you about this but there's this way we can you know if you wait a little saturday morning we can do it because they're getting ready to go on sale for labor day or whatever you know all that kind of

garbage they'll pull something out of their hat or they'll go you know i've done all you know mr ranger we've done all we can do so well let's let's see let's ask your manager then and just see if there's something we can do because because we're not going to be able to connect at this level okay It's good. Okay, next. Do you tell them that you have a certain amount of money to spend? Do you tell them that amount? Or do you let them negotiate or like say the price and you just try to bring them down to what you, like, you know the total in your head? Is it, do you lose power sharing that total? Because George, in our boat discussions, I had like $65,000 to buy this boat or whatever. And he was like, no, he told me, it was like, no, you never share up front what you have. You always kind of work on. down or something. I don't remember the exact discussion we had, but I remember he mentioned that.

So I was like, oh, yeah, I don't know. I probably wouldn't, depending on the situation, what is it? Is it a washer and dryer at a retail store? You know, you're not dealing with anything there. But if you're buying a boat from an individual is selling a used boat, I definitely would not tell them that. Okay. And the amount of money you have is not relative to the discussion. What's relative to the discussion is, what's the boat worth and what am I willing to pay for it? Okay. That's clearly all that matters. Yeah, yeah, that's good. That's good. Okay. And then how long do you go back and forth with someone until you realize, oh yeah, it's not going to be, there's not going to be a deal here? I try not to get into the go back and forth thing. Yeah. I just go, you know, give me your best deal.

What have you got here? And, you know, they'll negotiate with themselves if you ask them to. You know, it's like, you know, you're asking 65,000 and you go, well, that's cool. But, you know, I'm here with cash and we can do a deal today. What's your, best deal, the one that makes you hurt just a little bit, but still the boat's gone. Yeah. Because your goals get rid of the boat today, right? They're like, yeah, yeah. Well, you know, what's your very best deal?

And they go, you know, 55,000. Well, I might have offered 59. Totally. Yeah, yeah, yeah. You need to be quiet and let them come on down. Especially a higher price to get that. And then when they go, and I go, well, is that all you can do. 55, and they go, huh, I can do 54 or 5.

You know, okay, well, you know, I'm willing to do. And then I'll put a price. You know, I'm willing to do 52 right now. Okay, so you still even go a little lower. Yeah, sure. Sure, sure. Why not? Because all they can do say, no, I told you, 54 is all I can do.

Yeah. Well, okay. Then we're there. Yeah, yeah, yeah. And all of this is contingent upon this. There's three things that make a negotiation successful. One is you as a buyer have to have a lot of knowledge about the value and the details of what you're doing. Yeah.

So if I'm going to look at a $65,000, a dollar. boat or a washer and dryer. I'm going to know the price of that washing and dryer a whole bunch of different places. I'm going to know I can get it here at Amazon. I know I can get it here shipped. I know I can get it at Costco there. I know it can get it lows there, whatever, right? I'm going to have looked through their website. And then if I wander into the store, then the guy goes and I go, well, man, I get like six places cheaper than that. So your knowledge base of the thing, and that's $65,000 boat, I've looked it up on Kelly Blue Book. I've studied some of the marine websites where they're selling boats and just a little, you know, I'm actually not coming in cold.

Like, I have no idea what this boat is worth. Yes. I actually know what it's worth. That happened to me with George. I know the boat is worth 60, and so I know if I can get it for 53 that I've gotten a good deal. And he got rid of a boat that he's sitting in his driveway blocking everything. He needs to get rid of it. So it's good for him.

So the second thing is know your options, which is part of the knowledge base. You've got to know the product, know what it is, know what the value is. and then know your options, know where else you can do it. You don't have to buy that boat. I don't have to buy that washer and dryer today at that place. And I think that's one of the biggest mistakes people make. And again, you could go range from, like, washing dryer to a house even. But you get so locked in on one individual thing and you're like, this is all I want, this is all I want.

And then suddenly you lose power. You've lost at all. Because what you don't realize is the human on the other side, even though they don't know they're doing it, they have taken all your cues in. your body language changes, your voice pitch changes, the way your standing changes, the way your eyes are moving changes, your cadence and your voice, everything changes when you are married to something. Yeah, and desperate for that one. You have, you have surrendered and all of the, you know, all the body, you know, and they're like, oh, that one's dead, let's just wrap it up, you know.

But if you're still in the game, you know, and you're still like, you know, I can go someplace else and they know you mean it, then all of a sudden that changes their need to help you with the transaction. And then the third thing that goes with that is patience. Walking away is knowing the product, knowing your options, and then patience. And that if you walk away power. And patience is, I don't have to do this. Yeah, yeah. Because we really, there's very few of these things we have to do. But we emotionally get all excited and we get car fever. And so, oh, I have to buy the car. And it's the only one. And they're rare and they're hard to get and all this drama queen crap and our own head costs us

tens of thousands of dollars. Yes, it's so true though. It is so emotional. And especially depending on what it is, I can feel that. Feel that so much. Okay. So now that we've kind of gone over some of that, because I think those are such great tips, okay, are there any things that you just don't do? Like avoid this. Well, I mean, we would be the opposite of it. You don't walk in with no knowledge. You don't walk in and go, oh, you know, and because they can read as you're walking up to the couch, the furniture salesman goes, well, they already bought the couch. Yep, yep. Or they're going, no, they're kind of looking and they might go to the other store.

And so when, you know, they can read your body language, again, your voice tone. And they don't know they're doing it. It's not like they had some class on it. But humans, we know. You can just look over and you go, well, that one bought that. And there's no playing hard to get here at all. And so the other thing I don't do is I'm not trying to harm the other side. It's not to bring harm to them.

Not be mean and rude. Well, it's not, and therefore it's not a conflict. It's actually a blessing to the guy if we buy his boat and get it out of his driveway. And he has cash on his hand to go do whatever it is he's going to do with his cash. He wanted rid of the boat. We got rid of the boat. His goal was accomplished. That's a win for him.

Win for us is we got a boat and we got a good price on it based on our discussion. And so this is a win-win scenario. If you have to harm someone, take advantage of someone, lie to someone in order to get a good deal, that's completely off limits. Totally. You have to have integrity, and you can have the best interest of the other party at art. Yeah. And do you think, is there like ever a scenario where somebody is selling something, we'll use a car?

And you've done all your research and you know it's worth 20 grand. And they're like, I don't know if this would ever happen. But they're like, oh, I don't know, maybe 12. And you're thinking, oh, no, like you could be getting more for this and you don't know what you're doing on that side. I don't know. Does that make sense? Yeah, I've done that buying like real estate, for instance. I said, you know, the appraisal on this property is 300,000.

That means you could probably get 300,000 for it. And you really need to think about that. Yeah, yeah, yeah, yeah. But if you want it sold today and we'll close it Monday, I'll give you cash, the deal I'm willing to do is 200. But, you know, you really need to think about that. Yeah, yeah, yeah, yeah. Because you don't want them later feeling like, well, they ripped me off.

Yeah, that's right, yeah, yeah. You know, and I've heard some wonderful stories with Ramsey listeners, as an example. I talked to one not long ago, and the lady said, you know, we had a, a cheap car that we were selling, we were moving up. We were buying a car, I'm sorry, for our daughter, and for a teenager, a cheap car. And the people they're talking to, and they said, why are you selling the car?

We're selling it to get out of debt. Or they said, you know, we're going to pay full price. To help them on their debt-free journey. Yeah. Oh, yeah. It was more of a generosity move than it was a negotiation move. Yeah, totally. But they just said that.

Or I've run into situations working in the church in a ministry situation where there's a widow involved. And someone says, okay, you know, you don't take advantage of widows. I mean, you don't want to make sure you pay too much there, right? But that's not really a negotiation thing. That's just a values issue. That's right. That's right.

And I think that's where people get, maybe could get tripped up when we're talking about negotiation, all of it where it's like, not only do I not want to feel cheap, but I also like don't want the other person to walk away with a bad deal. I want us to both win. And you can do that. You can do that in a negotiation where you both walk away. Exactly. I mean, the ultimate is the garage sale, right?

If it doesn't sell by the end of the day, what happens to the crap in the garage sale? Right. It goes to Salvation Army. Yep. For zero. Yeah. And so anything you get for that couch is great. At 3 o'clock in the afternoon in the garage sale is way more than you're going to get tomorrow at Salvation Army.

Yeah. Yeah. And we got it out of your garage and you didn't have to move it. Yes. You know, so everybody's winning here. Yeah. That's good. That's so good.

Okay. So let's talk about what people should do in like very specific scenarios that they probably will find themselves in. So the first big one, buying a house. Negotiations around house prices, which, again, the market is, it's so wild, it's high, but yet people, you know, depending on where they are financially, still are in a position that they want to buy a house and they're able to. So they're walking into that scenario. What are some things in there that they should do in the housing one specifically? Well, again, let's go back to our big three. Okay, we're going to have a lot of knowledge about it. What's the square foot, every square foot price on the size of home in the area that I'm looking

for. Therefore, what is this house worth? Okay. And by the time you've looked at a few neighborhoods and you've kind of got it dialed in, your real estate agent, your Ramsey trusted agent should be walking with you and saying, okay, here's comps, here's comparable sales in the area. So, you know, you're looking at that house and you're going, it's just not a $900,000 house. Yeah. It's a $700,000 house. The guy's got $900,000 on it, but it's just not. It's not worth that. the value, the appraise for that. And so you know that going on. So you got to know what's going on.

You don't get married to it. You got to maintain walk away. And the way you don't get married to it is you have lots of options. You just keep looking. There's another house. There's a house on every stinking corner. We'll find another house. And so slow down.

Where people got, you know, in this last cycle, when it got so frenzied, people were overpaying because they were violating every bit of that. And they were just like, they were completely on fire. They were in the fever mode. and run, run, run, run, run. I'm not going to get a house. As if in your entire life, you're not going to get a house if you don't buy one right now in one of the most frenzied times in history. Well, that's crazy. Just calmed out. So, you know, for instance, we have bought, Ramsey's have bought no real estate recently. There's not been deals, and I don't buy real estate

unless I buy it a deal. There's not even been any bargains out there. You know, things are slowing down. We may see a few bargains again, so we may be back in the market again. But we just set on the sidelines, you know, in terms of investment real estate. Yeah. You know, and we're not going to buy it unless it's a deal. So for a family, though, that's buying just their primary home, if you're in a financial position to do it, though. Yeah.

It's a great time to buy. But don't overpay, though. The point is, don't overpay because you didn't control you. Yes. Yeah. Your emotions. Yeah. And if you've got other options, because you've looked at a lot of different properties,

Sharon and I sold our home back in 20, and we knew we were moving to certain neighborhoods, so we had looked at eight houses in that neighborhood. and immediately had ruled out five of them. So there were three possibilities. And, you know, we were going to buy one of them because that's where we wanted to be. And, you know, so we bounced, we hit one and couldn't, and we bounced and went to the second one. We're living in the second choice, you know. And it turned out to be, okay, you know.

It's a great house. Probably better than the other one is, I think God had his hand on it. But you just can't get all fatalistic as if there's one, there's only one. Oh, brother. Drama. Okay, so for cars, what's some of the rules, the three you're talking about for sure. But things like you want to check to make sure, like, clean, take it to a mechanic, making sure that it's inspecting.

Like, what are a couple of those nuanced things for cars? It's great to have the car having a mechanic doing inspection on it. If you want to get real detailed, they can do an oil change with the owner's permission and do an analysis on the oil, because what's in the oil, it tells you how the bad the engine is. If there's shavings in there and so forth, it tells you the engine's got some wear. If there's smoke in that oil, that engine's got some wear. And so you can look at stuff like that. If you want to get real technical about it, I wouldn't do all that for a $20,000 and under car, though.

If you're buying a super something expensive, yeah, I'd probably have it looked at. If you're not getting it from a reputable dealer who's already combed through it. Do you think dealers or individual buyers for someone that's buying a used, you know, $25,000 car? Individual, individual. Because the individual doesn't have any, um, They don't have cost of goods sold in it. If a dealer's got that $25,000 car sitting there, it's because he's traded for it or he bought it at auction to put on his lot.

That means he just the other day paid $18,000 for it. Okay? The seller of an individual selling a $25,000 car, they bought it four years ago for $50,000. Yeah. And so what they paid for it is completely irrelevant in the discussion as to what you'll pay for it today. What the dealer paid for it is very relevant

because they're not going to buy it for $18,000. and then lose money. Right, right. So their cost of good sold iners into that, they're looking at margins is what they're looking at. An individual seller is not, their margins don't come into it. What they paid for is irrelevant. It's just what's the car worth?

What are they willing to take for it? What's their situation? How motivated are they to sell it? But you can almost always get a better deal from an individual. Those are great tips. So I think one of the most powerful things, though, for people to take away from this is that negotiation is not bad. and that you can have a level of power in it to make a wise decision for your family and not harm the other person in the process.

Absolutely. I mean, if you just change your moccasins for a second with the person who, if you have something you want to sell, if someone buys it from you at a price that you're okay with, they have blessed you. Yeah. Yep. Yep. And so you're a blessing when you're a buyer. You're bringing them good news. I have money. I have money. Yeah, I have money and you're not going to have to have that. boat in your driveway anymore. It's a wonderful day for both of us. So it's not a conflict. Yeah. It's a dance. And everybody's enjoying the party. And do the dance because it'll end up saving you money, probably, if you get the deal. That's the other great thing is you walk away. I think when people don't ask for a bargain or refuse to negotiate for that vote,

it's because, A, they feel like it's a conflict or B, they feel like they're harming someone. And you just have to take those things off the table. If it is a or you're harming someone, you should go to another deal. Right. You should walk away. Right. You shouldn't do something or harm someone. But, you know, I used to buy foreclosure houses.

And we would buy them and close the deal on Thursday before they get foreclosed on on Friday. Yeah. So these people did not get foreclosed on and put money in their pocket. Yeah. The 24 hours later, they would have zero. Yep. And a foreclosure on their record. Yes.

Obviously, I'm getting a great buy, but it saved their lives. Yeah. Yeah. In that way. Totally. Totally, totally. Negotiation is a great topic, you guys. And again, it can be a little intimidating at times, but you guys, step into it, step into it, especially these bigger purchases that you're doing, whether it's appliances, cars, even houses, use these tips because it'll save some money, which is awesome.

Okay, so one way, if you are planning to buy something that I would really recommend to use is the every dollar app. So we talk about this app all the time on the show, but it's great for budgeting, but it's also great for planning. So if you know ahead of time, hey, we're going to have to replace the car, probably by next summer, you can start putting it. putting money away and actually using every dollar has a tool in there to help with the sinking fund and to help you when it comes to these big purchases. So make sure to download it for free, check out every dollar. And if you're interested in hearing more or learning more from Dave himself, all of us Ramsey person eyes, make sure to check out the Ramsey show.

And it is on podcast, on YouTube, on radio, on SiriusXM. It's all over the place. So make sure to listen and follow you on all socials at Dave Ramsey. And you're on TikTok. Yeah. Instagram, Facebook. You're on all of it. It's pretty great. So good. Yeah, fun.

Thanks for coming on. So today I'm going to be reacting to a list of things that you should avoid saying when buying a car. I saw a video from my father and son who work at a dealership and they're spilling all the dues and don'ts when it comes to car shopping. So at Ramsey, we are big believers in paying for your cars in cash and only buying used cars until you reach a certain. financial milestone, which you are an everyday millionaire. So until that point, use cars, it's the way to go. And we get a lot of flack for this, but listen, we are confident in our advice. We really do believe no debt is the best way to go even with a car. So I'm always interested in hearing someone else out there and their perspective. So I'm going to go through their tips

and just share my thoughts along the way. All right, pups, we are going to run through things that car dealers, salespeople, sales managers, finance managers, ask you. when you're going through the process of buying a car, and then we are going to demonstrate the way that you should respond. The reason we're doing this is because, if I'm not mistaken, when you were a sales manager, you did a lot of training with your salespeople. Here are what you guys called them word tracks, right? Yeah, that's what they're called.

Here are the word tracks. Here are the things we say so that we can put the customer in a position where we can either get them to close, you know, move along in the deal. This is when customers hear those word tracks. Here are your word tracks that you wrote for us in Kimberly Klein, the F&I, got us herself back at CarHedge.com. She wrote on these cheat sheets. You ready to go? Yep. Do you have a monthly budget in mind?

You know, I just have a total out-the-door price in mind. So if it's okay with you, Zach, I would just like to concentrate on what the out-the-door numbers are going to be. And let's run that back now if I'm a normal customer who's not educated about what they're going into. Hey, Ray, do you have a monthly budget in mind? Well, yeah, yeah. Of course I do. And what is it? Oh, well, you know, I don't want my payment to be more than, I don't know, say $700 a month. Boom.

What happens when, as a customer, I say I don't want my payment to be more than $700 a month? Well, they know how they can approach the deal. They're just going to talk to you about monthly payments the whole time. And a good salesperson is going to save you $700 up to, and you're going to go, I don't know, as long as it's not more than $7.75. So for every $25, you push yourself, that's like another $1,000. You're just sinking yourself into a whole versus, versus asking the question, or saying back to them, well, I'm really just focused on the out-the-door price. Yes.

All right, let's go to the next one. Okay, so we'll pause there. So they talk about, you know, knowing that what your monthly budget is, which is great, but they're doing it in reference, in retrospect, to a payment. But I think that this does prove the point, though, to know what your budget is. And when you don't use debt, you have to know you're out-the-door price. Like, you're like, I have this cash to buy a car what's within those price ranges, right? So that way, a dealer is not talking you up into a nicer car that you can afford.

And when you have debt in the picture, as you saw, it was so easy to be like, yeah, it's $700. But, I mean, I guess like $750 wouldn't be terrible. Sure, I don't definitely can't get to the, you know, you start negotiating with yourself. And then there's the salesperson listening to all this. And you're going to end up walking away with a nicer car than what you even need or what you can afford. But when you spend with cash, you literally have a set amount. There's a boundary there that this is it. So they can't talk you into a nicer car because you don't have the money for it.

Like, this is what you have. So that's the power in knowing what you have and bring cash to the situation because you can't have someone talk you up in it because this is what it is. So interesting play on words there that they kind of did. So I love that. Okay. Let's keep going. Well, Ray, how much cash do you plan on putting down?

You know, I really haven't decided that yet. and I won't until we establish what an acceptable out-the-door number is. So, Zach, I'm telling you, we really have to work on the out-the-door number, and then we can start working about the other aspects. All right, and let's pause here. Why is a salesperson, do I care about how much cash down is going, if, especially if I just got the customer to tell me they want their monthly payment to be no more than $775.

Yeah, I mean, between cash normally equates the profit. The more cash you have in a deal, the greater the likelihood that the price profit's going to be bigger because if ultimately you end up having as a salesperson or a sales manager have to work on a payment, well, typically it means you have to discount the car in order to get to that payment. The other way to discount, the other way to lower the monthly payment is to get cash from the customer and you don't really have to discount the car as much. So the dealership's always going to want you to focus on what the monthly payment is. You're always going to want to focus on what the out-the-door number is.

and you want to establish that before you start getting into any type of conversation about your monthly payment. Okay, let's pause that. Okay. So, again, this is one reason why I hate debt because you're playing the banks game, you're playing the dealers game, and all of it. And here's the deal to you guys.

When you go in and you actually have the money to pay for the car, they don't like you at the dealership as much because they're not making any money off you. I mean, with the interest and everything else, like they're getting a better deal when you're going into debt for something. So immediately when you say, Yeah, I just have all cash.

This is it. It's kind of like, oh, man, we're not can make as much. So just get ready for that feeling because that's real. Okay. Okay, so I'm the salesperson. Yes. Ray, what are you going to do with that car you drove here? You plan on trading that in?

You know, I haven't really decided what I'm going to do with it yet. What I really like to concentrate on, Zach, is that out-the-door number. Once we're established an out-the-door number, then we can have a conversation about whether I'm going to trade a vehicle or whether I'm just going to sell the vehicle privately to someone else. All right, exactly. Two separate transactions. We just did another video talking about how you have to treat these as two separate transactions. Okay, so those were three examples from the sales side. Okay, so pause there. I love this advice. That's so interesting looking at it as two separate transactions because it is so easy. Just be like, well, I'll just trade it in. And it feels good because

you're like, oh, yeah, that's going to cost $7,000 off the price of my car when in fact you could get a whole lot more as for an individual buyer doing it completely on your own. So doing that research and seeing it as two completely separate transactions thing is so smart. That's really wise. I love that piece of advice. Okay. Now, Dad, let's say we've gotten past that. Now I'm talking to the fine finance manager. You're going to hear some things like this. I'm the finance manager you're the customer. Yes. Well, Ray, I assume you've given some thought to your monthly payment. I know you worked the deal with Joe out on the showroom and everything makes sense. Do you have a sense for where you want that loan term to be and what you're comfortable with?

I have indeed given quite a bit of thought. And I've gotten a pre-approval from my credit union down the street. So I really have a complete understanding as to, A, where my payment should fall and B, what my term should be in order to keep my payment where I'd like to have it. That is a perfect way to respond. You're taking control with saying, hey, I actually, I'm informed. I know what I got approved for versus, well, I haven't really thought about the loan term. Actually, could you make my payment go even lower? Sure.

Yeah. Sure, I can make your payment go even lower, but maybe it's going to extend the term. All right, what about to add some of those other products, like extended warranties and things like that? The finance manager will typically pull out a menu. We have all sorts of examples of this. Kimberly has done an incredible job. We've got fake menus, faux menus. So, Dow, what do you do when the finance manager brings out that menu and puts it in front

of you either digitally or physically? And it shows all your various options for how you can protect this brand new car. It's only going to increase your monthly payment, $10 a month, $50 a month, whatever the heck it is. How do you respond to that? Can I see a breakdown of what each one of these items is costing me? I'm not as concerned about the monthly payment per se as I am at what the actual charge for this item is. Yeah, and you need to also ask for things like your base payment.

So remind me, hey, what was that actual payment that I was at without any of these products added on? And then please everyone recognize that when you add those products on, you finance them. You are financing them. You're paying interest. Oh, absolutely, yes. That's why it's good to ask for what's the actual price, because then it helps you rationalize whether you're spending your money on. And it helps you rationalize whether or not the price is equal to or greater than its value. Exactly.

Yeah. Okay, so pause that. Always remember this, you guys, when you're using debt, it is so much easier to add things on, whether it's another sweater when you're shopping online or at a restaurant, add another appetizer. Like, whatever the situation is, whenever you're using debt, statistically speaking, you're going to just naturally spend more because the emotion is not there. And that includes when you're buying a car. So, you know, they use the example, yeah, well, let me see the breakdown of each of these warranties,

which is a great question to ask, even if you're a cash buyer, like, hey, you know, what are the options and what are the prices of all these things on this menu? but also when you're using debt, it's like, oh, yeah, 10 extra bucks on my payment, no big deal. But when you're paying for everything up front, you're thinking twice about it all and what's really worth and what's not. So that's the power of using cash, you guys, makes you think through all your purchases, even some add-ons like this.

All right. So overall, I agree about doing your research and having an intentional plan when you're buying a car. All of that. When they were talking about that, I totally get that and understand that, knowing your budget, knowing where your limit is. even though they introduced debt into it, but all of that, that power on your end is so key. And remember, you're the one in charge.

And that's what kind of what they kept saying, which I think is great, to put the power back in your hands, not in the dealership or the salesman's hands. So I think that is a great perspective to have. But obviously, I disagree with all the financing stuff as they were talking. And in fact, it confirmed more with me of why I believe what I believe. Because you guys, not only debt and, you know, spending $700 a month in a car, loan versus investing that money for your future and buying a car that you can afford, even if it's not a great car. It may not be a $50,000 car, maybe a $5,000 car. But just the idea

that you own your stuff is so key. And you're not dealing with the finance department or going to the credit union and see what your interest rate is or the prepayment penalties. All of that stuff is not even a thing. You don't have to worry about any of that. You have your budget. You know what money you have to spend on a car. And that's what you're going to pay. And there's something so empowering about that because you walk away from the dealership with your car, and that's it. Not with a $700 payment dragging behind that car

every single month for years. So it is powerful for you guys. Save up. Pay for your cars with cash. It is a depreciating asset. It is going down in value every single day. So you're spending money on interest, paying extra on this car that you're not going to be able to sell.

It's going to be a fourth of what it costs when you bought it. So it's not a wise investment to take debt out on a car. pay cash for your cars. So if you're wondering whether or not you are ready to buy a car or how to go about owning and maintaining a car the smart way, make sure to check out our Ramsey Car Guide. I will put a link in the description for you guys. So make sure to send this video to a friend who may need help negotiating when it comes to buying her next car without debts. No debt here, all cash. Today, I'm going to answer a question that I get all the time. Is it really possible to travel for free using points? So if you don't

I don't already know. I've never had a credit card, never will. And I know a lot of people have very strong feelings about this. And honestly, you guys, I'm just at this place where I don't really care anymore. Like, I don't mean to be rude or dismissive. But listen, at a certain point, I feel so confident in my money beliefs and my decisions around money that it just stopped bugging me when people disagree with me. I'm like, great, you do you. But here's how I think is the wisest best way to live with your money. And I can't control the financial choices of all of you out there. and I don't want to. So my job is to show up and teach you what I have learned

and what I believe is the smartest way when it comes to handling money and the way that's really been proven over 30 years here at Ramsey Solutions using these principles. Now, the main goal of this show is to show you that it is possible to choose something different than what credit card companies or airline companies are trying to sell you. So that's what we're going to do today. So let's talk about leveraging points for discounts on travel and if it's actually worth the headache.

So back in September, there was a lot of talk around Delta Airlines, making it more difficult for customers to earn elite status with their points. So obviously, this is a huge bummer for people that are frequent flyers. It caused a lot of anger and disappointment for people that have been in the system

and relying on it, and then they change it, and then they're like, oh my gosh, what is going on? So apparently the changes that were made would require customers to spend significantly more money in order to earn these points. So I don't want to be. be the bearer of bad news, but this is always going to be the problem with any systems when it comes to rewards or miles or points. Because at the end of the day, the massive corporate companies

are always going to be concerned about the bottom line, which means they don't really care if you go into debt as long as they profit off of those increases. And it can be kind of deceiving because you think, you know, in some of these commercials or Instagram ads can feel like, oh, yeah, we're on your team. I want you to see the world, go see those pyramids in Egypt. You go, you go. And you're like, Oh my gosh, American Airlines is like supporting my lifelong dream for traveling the world. No, hate to break it to you. But airline and credit card execs, yeah, cares 0% about your dreams of that Alaska and cruise. They're there to make money.

They want you to spend more and more money so that you can get a little perk. And they're trying to convince you that playing the game is worth it. And I'm not going to lie, I fully believe that there are people out there who feel like playing this game, that they are winning at it and they're successful at it. But I also believe that for majority of people, it's not worth the risk. So for me personally, I don't think it's worth the brain power to play the whole travel points game because having to plan and scheme about when to register for this limited promotional deal or which credit card I can use for food versus the ones I use for entertainment

so I get these two extra points. It's all confusing and it takes a lot of time and a lot of energy. One of my coworkers has a friend who works for a points influencer and she confessed recently that she has 18 credit cards in her wallets. 18 credit card. Money was never meant to be this complicated, you guys. And I would rather make wise financial decisions all the time so that my family has a firm foundation to stand on financially.

And that's where we plan our travel. It's from that, not from all these points in this credit card game. So why not actually be able to afford all the things you want by the money that you have? And something else that I find interesting is how many people have come to the same conclusion completely on their own because listen, it's just common sense. And at Ramsey, we're known for rejecting debt and challenging the credit card industry. But the other day, someone on our team was saying that she'd never had a credit card and not because she followed Ramsey for years or was intentionally taught about these principles avoiding debt,

but because it always just seemed like too much paperwork, right? It just seemed too complicated. Can I get an name in? So if more people made smarter financial decisions from the start so that debt never even felt like a need or an option, that is the best way, you guys. That's the best way. and that is my hope for you that when it comes to a peaceful way of living with your life, it's all on your terms. There's autonomy. That is the best. So let's talk about some smart ways to manage your monies that you can reach your travel goals. So when you're looking at your overall money picture, getting out of debt is one of the number one goals I want you to have. And this is before travel, this is before anything, it's getting completely debt-free. Because when you don't

have debt, you have your income. And instead of your income coming in and going back out 18 different directions to 18 different credit cards, it's hard to use the money for things that you want. So that income being back in your power is huge. So getting out of debt is big. Also being able to save up for things you want. So this is like a sinking fund. So if you do have a trip you want to take, then be saving for it a little bit at a time. Winston and I have two big trips coming up.

And that's what we do. We're like, yeah, we knew that we had one in November and one in December. And so we started planning and saying, okay, we're going to just put some money away for these. so that when the time comes to put the deposit down on the hotel, you know, to buy the flights, the money's there. And it's great. So sinking funds are awesome. And also budgeting helps you with that. If you've not checked out every dollar our budgeting app, make sure to do that. Because when you plan month to month and look in the future, you have things under control. Now, listen, there are some loyalty award systems when it comes to airlines and all of this.

And some of that is great, right? Southwest Rapid Rewards. It's awesome. And we use those perks. And it's great. Also, you know, the Target debit card. When I go to Target, I use that. And I swipe the debit card, money comes out of my account. But here I am using my own money. And that's the key, you guys. When you sit there and play this game back and forth with the credit card companies, and if you don't pay your bill, there's interest on top of that,

it's all of this is where it gets murky. But when it's just you and your money and then you can benefit from that, that's great. But don't be benefiting from money that's not yours. So listen, it can be done. You can have a great life and travel and enjoy your life. life with a lot of peace and actually afford your life by cash flowing things like travel and all of it without having to play this point system game. And so for me, I would rather pay for things in full and not have a bill at the end of the month that I'm having to pay for just to get those extra points.

So if you're ready to break up with debt and credit cards once and for all, you can learn exactly how to do that through Financial Peace University. So make sure to check it out at ramsysolutions.com And there you can enroll in an FPU personal finance course and has tons of help. resources for you every step of the way. Oh, travel hacking. I mean, sometimes it takes a lot of work to make it work. But hey, we all love to travel, don't we? Okay, you guys, thanks so much for listening to this episode. And thanks to my dad, Dave Ramsey, for being a guest on today. And thank you guys so much for sending this episode out to all your friends, because it is helping us so much get this podcast in front of people who may not know that it's out there.

because let's be honest, we want to help America take control of their money. And the best way is to get this podcast in the rhythm of people's lives. So thank you guys so, so much. All right, you guys, remember to take control of your money and create a life you love.