The Ramsey Show - App - Can I Afford To Buy or Should I Rent Forever? (Hour 2)

Episode Date: October 17, 2022

Ken Coleman & George Kamel discuss: How to afford a house in San Diego, Buying a new car vs. used car in the current market, How much money to put toward debt, The best ways to save for your child's future education, How today's colleges might not be worth the money, Prioritizing debts and upcoming expenses when getting Gazelle intense, How much you should plan to spend on a purchasing a vehicle. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

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🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving, and storage studios, this is The Ramsey Show, where we talk about your life, your money,

your work, and your relationships. I'm Ken Coleman, joined by George Campbell. We're here for you this hour. It's a free phone call if you want to jump in. 888-825-5225. That's 888-825-5225. George is going to take care of the specific money questions. I'll chime in.

And I'm here to answer any of your work questions relating to, hey, do I take this promotion? Do I change fields? Can I work a side hustle? Can I work a side hustle? Should I work a side hustle? Any of those related issues as it relates to your income. I'm here to help you make more income and more impact, and we'll work together to help you. Phone number is 888-825-5225. Ariel is in San Diego, California. Ariel, how can we help? Hi, thanks for having me.

So I know the math works in California, but I'm single. I make about $90,000 a year between my full-time and my side hustle. And I'm just feeling like it's impossible to save enough to where I can afford a 25% of my income mortgage. And I'm just wondering, at what point do you just give up on home ownership and just decide to rent? Wow. It got dark real quick, Ariel. You just were like, eh, it's over. How old are you? I'm 44. Okay. So you've got plenty of time and you do live in a high cost of living area. You make 90,000. Where's all your money currently going? Do you have any debt? No, I'm on step 3B. Okay. So how much do you have saved currently?

I've got about 13,000. All right. That's a great start. So what makes you think I'll never have a hundred? I'll never have 150? Well, in order to afford that 25% that you guys recommend, I would need a $260,000 down payment. On what kind of house? That would be a one bedroom condo. 400,000 is the average for a one bedroom condo here. Okay. And can you live further out than that? Do you have to live in the proper San Diego proper? I could go a little farther out, would be about $380,000 if I go like half hour out somewhere in that right now. Okay. Yeah. And so how quickly, if you're making 90, you think your income will go up over the next decade? I think so. Yeah. Okay. I don't want to work two jobs for a decade, you know? Sure. So what could your professional income look like?

What would that look like if you really walked up the ladder that maybe you're on or you'd like to be on? What do you think you could make? Well, there's a potential for me to get a promotion within the next year, but it would only bump me up by $10,000. So that would definitely help, though. And then as far as moving up in my career, I'm trying to expand like what to look at. And so I have started looking into being like a safety manager, but there's just a lot of schooling that goes into that. So then my savings would go to cash flowing all these certifications I would need. So I don't know. I'm just right at the beginning of potentially looking for a different job because I really love

my job. Well, just ballpark, and I don't want to get us lost in this, but that'll be the last question I'll ask on this, but what do you think those certifications would cost you, roughly, all of them? $10,000 to $15,000. And then that would give you the opportunity to make how much more in income? So my full-time job, I currently make $72,000, and that job, the top end is $93,000. Okay. All right. So Ariel, here's how I look at it with renting.

The cost of living is only going to continue to increase, and so rent is going to continue to go up over the next decade in San Diego. Would you agree? Yes. And so while it may take longer for you to get into that condo or house, I also don't want you to give up and just go, well, I'm just going to rent until I retire and pass away. I don't want that to be the MO either. And so I think we can find some in between. And when it comes to our 25% parameter on that 15 year fixed, that is your income after taxes,

but before other deductions like your healthcare, your 401k. So is that how you've been calculating this? No, I was going according to what money hits my bank account. Okay. Well, that can be a slightly confusing number because of that. The parameters are really, because deductions can differ. And so if you're investing 15%, well, it's still a quarter of your income, but because of those deductions and because you live in a high tax state, you're not seeing a whole bunch of your paycheck, right? Correct. So if that number did change, you could probably get in that house a few years sooner, correct? Yeah. And so if you do the math on that, go back to the mortgage calculator, it might mean you need to put 200 down on a $400,000 house. And if we can create enough margin to go, all right, I can put,

you know, five, four grand away every month for 12 months, that's 48,000 a year. And after four years, I've got what I need while I've been investing 15%. And if that means we have to go get more income, it's worth doing. Yeah. So what are you doing for work, you said? I manage a public swimming pool. Okay. I work for the city. So are there other management jobs, maybe in the private sector, that could pay you more than that? Absolutely. The answer is yes. Sorry, I jumped in, Ariel. Okay. He got excited. Well, yeah, because here's the deal. You are limited with a municipality or state government job. You just are. And the fact is you've got skills and experience that are very

transferable. And again, I think what George said is absolutely the way to go. But I also think that your income potential is far bigger than you realize. And it makes a lot of sense for you to at least look around and go, all right, what could that look like? And again, I'm not going to just pigeonhole you, but the 15,000 inserts that you talked about, being able to make you 30 or 40 more a year, well, that pays off pretty quickly.

But I think it could be much higher than that. And you know what I'm going to do, George? We've got a brand new bundle. I'm going to give away to Ariel. How about that? I love this. So,. And you know what I'm going to do, George? We've got a brand new bundle. I'm going to give away to Ariel. How about that? I love this. So, Ariel, here's what I want you to do. I want you to hang on the line, and we're going to give you the Increase Your Income Bundle.

It's at ramseysolutions.com in the store. And it's got my book, From Paycheck to Purpose, which will give you the seven stages to finding and doing work that you love and you get paid well to do. The Get Clear Assessment, which will help you out with ideas. The Get Hired Digital Course, where I teach you how to do everything that's actually in the book. And then we have resume templates that are very, very popular that'll help you stand out. So I'm going to bundle all that for you. It's called the Increase Your Income Bundle, George. Love that. And it's got all kinds of, you get the book, you get the digital tool. You got the assessment. You have the templates and the course. Yeah, where I

teach people how to get hired. A signed photo of you. The 8x10. That's what's missing. The 8x10 glossy of George Campbell's not included in the increase your income bundle. So hang on the line and we'll get you that. And that, George, really is the key to

the gap. Well, with a high cost of living area especially making 72 and you can't throw your hands in there go i'll never do it no i'm gonna go make more money and now's a great time to do that so i love it yeah appreciate the call area you'll get there i love san diego george you know what a beautiful area no bugs didn't think about that that was not on my list of why i love san Diego. Well, I like to sit outside on a nice summer evening in Tennessee. You're going to be swatting some mosquitoes. No thanks. Or as they say in the Deep South, skeeters.

Skeeters. There you go. Teaching something new every day to you, George. Hey, don't move. Much more valuable information than that coming up. This is the rams of show one of the most common pieces of advice i give folks trying to get out of debt is to sell the car. And I get it. That's easier said than done.

Selling a car takes a lot of time and hassle unless you use CarWiser. CarWiser is a free service that gets you the best offers instantly from dealers around the country. And it couldn't be simpler. Just enter your vehicle's information and boom, you've got offers to choose from. So go to carwiser.com slash Ramsey. That's carwiser.com slash Ramsey. This is the Ramsey Show. I'm Ken Coleman. He is George Camel.

Thrilled that you have joined us today. The phone number is 888-825-5225. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. All you got to do is use the promo code RAMSY to get the best deal. Today's question comes from William in New Mexico. Are there new rules for buying used versus new and lease versus financing in this post-COVID era? My family has been looking for a used car we can pay cash for, like we were taught in Financial Peace University, and we're finding used cars only a few thousand dollars less than new. We also learned the insurance companies are asking for additional bridge coverage since the used cars are not as valuable as they're being

sold for. Ugh. Help, please. Ugh. There you go, George. Okay. So right down your lane. Well, there's a lot going on here that grinds my gears, Ken. Oh, boy. Not to have a car analogy. Well, I like what you did there. But this idea that, well, used cars are only going for a few thousand dollars less than new. Yeah, if you're looking at $38,000 used cars. Thank you very much. Most people don't need to be driving that. Based on the average income, people need to be looking for $15,000 cars.

And let me tell you, there's not 15,000 new cars out there. But some people need to even be looking at $5,000 to $7,000 car stores, depending on their situation. And one of our favorite things to do is go on- I love it, dude. Onto the internet and just search. What would you like? Give me something.

While you're teaching, I'm going to pull up a sample. What are you looking for? Okay. Well, you know, a car that we recommend here frequently is a Honda. So let's look up a Honda Civic used in decent condition. Let's just see in the actual area. All right, you keep on teaching. I'm going to do your homework here.

So no, there are no new rules for buying used versus new and leased versus new. Our advice still stays the same. Stay away from debt at all costs and save up and pay cash for a reliable used car. No, we don't mean take a briefcase full of dollar bills to the dealership. That's not going to work. But you can take a money order or a cashier's check and go and do that. Now, a lot of dealerships make their money through financing. The margin on cars can be as low as 6%. The margin on financing can be as high as 60%. And so when you walk in there and you tell them, hey, I'd like to pay cash, a lot of the times they're going to, sometimes they'll say,

we're not going to sell it to you at that price because they don't make enough money on the deal. They'll wait for the next guy to walk in who's ready to finance. And so you've got to know exactly what you're walking into. And this means doing all your research ahead of time, online, knowing the value of the car you're going to buy. And you can tell them, you can wait till the end and say, what's the out the door price. That's what you're looking for is the out the door price, because that includes all of the fees. And when you look at those fees, make sure you don't pay anything more than sales tax and a small dock fee. Anything else is highway robbery. They go, oh, that's a mandatory warrant. No, I'm not paying that. And watch what happens

when you walk out the door. They'll be chasing you within three minutes because they see a guy with a check in hand ready to buy. All right. What do you got for me, Ken? All right. Thank you, George. This is one of my favorite things to do. So, Ken, here's the people's objection is, Ken, there's no cars under $15,000.

I got to go buy a $38,000 used car. And I would say that is not true. And I've got the results right here, George. I just did a quick search using AutoTrader in the Franklin, Tennessee area. Okay. All right, and I'm going to give you some options here. Okay, first, we've got a used 2008 Honda Civic EX, 129,000 miles, which for a Honda is barely getting started.

The car hasn't even woken up yet. The car is a teenager. It's still a teenager. It's a teenager. Thank you very much. $7,999. Wow. Okay.

By the way, it's a nice little blue paint job. It looks fine. All right, let's go up a little bit. All right. We've got a... What about in the $10,000 range, Ken? What can we get? There's no need to shout, George.

Sorry, I'm getting excited. Here we go. We have a used 2008 Honda Civic. It's an EXL. That's top of the line. It's an EXL. See, you know EXL. I owned one.

You did. 145,000 miles, again, for a Honda, not a big deal, $9,999. So that's just below the threshold. Is it going to impress anyone? No. No. Will it get you from A to b with very little repairs and maintenance costs yes yeah yeah oh sorry yeah yeah yeah so again that's just one example i get very

excited about this because i'm in the market right now for a teenager and i'm looking at this stuff all the time by the way i should point out facebook marketplace great place to find good deals and you can negotiate over there yeah it's not a deal you're dealing with a private seller and uh you show up with cash dave ramsey taught me that many years ago. I mean, literally show up and go, this is what I'm paying right now. And you count it out. Lay it on the hood of the car. And do it somewhere public, by the way, if you're going to do that. Don't put yourself in a precarious situation. Bring a friend with you. That's it. By the way, grocery store, parking lot, it's a great place to do that. Banks, police, you know, you can go to all these places.

Yeah, it's great. Meet me at the police station. The police station is where the deals happen, my friend. Oh, wow. You really are scared, y'all. You are really scared. I'm telling you. Well, anyways, I don't know what it's like in New Mexico.

I can't imagine it's much, much different. It's not. So, yes, if you want to buy an insane used car, yeah, it might be a few thousand less than new. Oh, look at this, George. I've got to throw one more in here. Used 2015 Honda Civic, 106,000 miles. They're asking 11,900. There you go. So don't tell me it can't be done. So it can be done, absolutely. And we don't tell people to go out and buy a new car until they have a net worth of a million dollars or more. And that's for

one simple reason. It's just too much of your world to spend that kind of money on a depreciating asset. Yeah. So there you go, William. Hope that helps. Good stuff. Thanks for the question. All right, let's go to Buffalo, New York.

Steve is on the line. Steve, how can we help? Hi, how are you doing, guys? Good. So it's my first time asking for help or calling you guys. Hey, Steve. Could you adjust your phone a little bit? You feel like you are muffled. Is that better? Not much. You don't have a sock over the phone, could you adjust your phone a little bit? You feel like you are muffled. Is that better?

Not much. You don't have a sock over the phone, do you? No, I don't at all. All right, well, let's try that. Go ahead. Okay, so it's my first time calling you guys, and I'm here for help. Okay. I just learned about you guys not too long ago, about two months.

Last year, a little bit more than last year, somewhere around June, I had $232,000 in debt. Wow. I bought a new truck. My old one died. I do a lot of towing. Paid for it cash. Paid that off.

I bought a house had it refinanced had a lot of problems with my house it was like the money pit I had about 10 grand in credit card debt I'm down to about

135,000 and now I'm stuck where I not really paying every little penny I have to pay off the debt faster. I'm kind of stuck trying to figure out how to get back on track. Does that include your mortgage? Yeah, that's including my mortgage.

Okay, let's parse that out. How much of the consumer debt, aside from the mortgage, what does that add up to? What do you mean consumer debt? Like credit card debt? Everything but the house. What does does that add up to? What do you mean consumer debt? Like credit card debt? Everything but the house. What does that debt add up to? Oh, about $12,000. Okay, and the rest is the mortgage? Yeah.

Okay, so now it's a different conversation. So now the question becomes, how can we pay off $12,000 very quickly? So what's your income? I make about $80,000 to $90,000 a year. So making $90,000 a year, how quickly can you pay off $12,000 if you pay off the smallest loan first and start attacking that one with a vengeance? A few months? A few months.

There we go. And so you just said you were feeling stuck, and we just showed you a path out within a few months. And now all you have left is a mortgage, which goes into what we call Baby Step 6. So you said you're a new listener. Let me lay it out for you real quick. Baby Step $1,000 emergency fund. You have that, right? You've got $1,000 in the bank?

Yes. Anything beyond that we can throw towards the debt. How much cash do you have in the bank? About $5,000. Okay. Anything beyond that we can throw towards the debt. How much cash do you have in the bank? About five grand. Okay. So we can take four of that onto the 12. Now we're down to eight. And now we start listing out the debts, smallest to largest.

What's your smallest debt you have right now based on the balance, ignoring the interest rate? I have no interest rate, so it's 0% for one year. I robbed here to pay Paul. Okay, so it's 0% for one year. I robbed here to pay Paul. Okay, so what's the lowest balance? Like $13.90 is the lowest balance. Great. So you knock that out with the $4,000 you have in the bank, and now you're on your way.

So continue that. In a few months, you're completely debt-free. Then save up your fully funded emergency fund of three to six months of expenses. We're going to help you out with this by gifting you one year of Financial Peace University. Watch the first few lessons. Get fired up. Continue to watch them, and that will help us walk you through this wild journey of the Ramsey Baby Steps that's helped 10 million people get out of debt and build wealth, and you're next, Steve. Steve, you got this, man. You're doing much better than you thought. You're not stuck. You got this.

Yeah, you're in great shape. Thank you so much for the call. More Ramsey Show coming right up. We'll see you next time. Welcome back to The Ramsey Show. I'm Kit Coleman, and I'm joined by my colleague, George Camel. We're talking about your life, specifically your money, your work, your relationships. How many of you are in a stuck situation in your professional life? I'm here today to help with that. You'd be surprised at how that might help you in your money life as well. Any work-related questions, let's take some of those today. And then, of course, we're going to take your money questions. George is all fired up. I'm starting to feel bad, George. I'm ready. Nobody's asking me any specific questions. Well, Ken, the truth is,

as I talk to people and do the Entree Leadership Podcast, you know, is that still 68% of workers are disengaged. I know. They don't want to be there. They don't want to be there. They don't like their coworkers. They don't like their boss. They don't even enjoy the work they're doing.

And you're going, it doesn't have to be this way, guys. Yeah. And also, you feel undervalued and underpaid, overworked, and they don't see a way out. George, tell folks what happens when you use what you do best to do work you love to produce results that matter to you. That's a great question. What happens? Well, you light up like a Christmas tree. More money, more meaning.

More impact, more income. Boom. So I'm here to help out with those questions today. But first, Emily is up in Denver, Colorado, the Mile High City, George. I learn something new every day. I'd like to give you a little nugget. Emily, how can we help? Thanks for taking my call. You bet. How can we help today, Emily?

Hi, I'm trying to get prepared for college savings. I have a three-year-old and a kid on the way. And my husband and I both went to very expensive schools and kind of looking at the 6% growth and tuition year over year, the total amount to save is very high. And I'm curious if, you know, I'd love for my kids to have scholarships and everything, but I want to be prepared for worst case scenario. And I'm curious if there's any scenario where you'd recommend putting some of that savings in something other than a 529. What do you mean by other than? Where else would you put it? Are you considering?

I guess I'm just, if, you know, one of my kids ends up going to an in-state school or get a scholarship, then I won't need, hopefully, all that money. And I'm curious if there's any benefit or recommendations for not getting that 10%. Well, even if you get a scholarship, what's really cool about these plans is you can withdraw against that scholarship. So let's say there's a $20,000 scholarship, and you go, well, now I didn't need this money. Well, you can withdraw $20,000 from that savings account tax-free. Okay. And so that doesn't need to be a concern.

And there's broad application into how you can use those funds when we talk about learning and education. It's very broad. The room and board, the laptops, the books, there's so much regardless of where they go to school. into how you can use those funds when we talk about learning and education. It's very broad. Room and board, the laptops, the books, there's so much, regardless of where they go to school. It goes towards trade schools, certifications. You talk about online technology programs like Bethel Tech, which I endorse. Listen, they can go a lot of different ways.

It's not like you're trapped. Is that what you're feeling? Okay. It seems like a lot of money to sit in a 529, so I wasn't sure if it... Well, how much money are you talking? Well, where I went to school, if I was projecting that for my daughter, it'd be just shy of 800K when she's... What? Okay. Holy... Yeah, it's crazy. I'm a little short of breath why does she need to go there 800 why does anyone need to go there where is she going it's just it's like a top tier school i i mean i don't know if she will but i would love to be able to provide please tell me

okay how much did you pay for it because i'm now curious. Yeah. Well, I had need-based scholarships, but the full rate when I went to school was about $40,000 a year. Okay. That sounds a lot more reasonable compared to $800,000 for four years. Yeah. And today's rate is like $80,000. Okay. Can I ask you a question? Can I ask you a question? I'd really, and I'm okay if it's different than what I think, but I'm curious to know. You said you and your husband both went to very expensive schools. Yeah. Do you think that those schools were worth the tuition based on where you guys are now?

And maybe where you could have gone to school? I believe so. Really? have gone to school i believe so i mean my husband got a full he he did rotsy so he did he got a full scholarship so he didn't end up paying but um i believe it was worth it if my daughter wanted to go but you didn't but neither sounds like neither one of you paid full tuition or anything close correct correct yeah i gotta tell. I got to tell you, I, I, I just want to challenge you on name brand schools. Um, let me put it this way. Uh, you remember the last time you went to the doctor? I mean, you're getting ready to have a baby. So remember your last checkup?

Yeah. Yeah. At any point in your medical journey, when you were getting baby checkups or your own personal health, have you ever asked your doctor to bring their diploma in and show you their diploma? No. Why? I don't know. Yeah. So how in the world would you trust the life of your baby with this doctor who you don't even know where he went to med school in undergrad? Right.

All right. You get where I'm going here? I'm not anti-education, Emily. But I'm telling you, nobody cares. Nobody cares where you went to school. Education important for the qualification you need? Yes. Notice I said for the qualification that you need. And your kids, the landscape of education is changing so rapidly that by the time your kids are there, the 529 is the safest play. Just to give you an idea right

now. Okay. So enrollment is down tremendously. 10%. I mean, I just put this out there. I got to look it up. But enrollment is down so much right now in the United States and it's Gen Z. So this is the generation right now that's in high school and they're looking at this stuff. And just to give you the numbers, college enrollment is down nearly 10% over the last two years. Only 51% of Gen Z teens are considering a four-year degree. That's a 20-point drop since May of 2020. The point is, there's a lot of education options that aren't going to look like they look right now. And so, I think the 529, George, the point I'm making is, whether I'm right or wrong in what I predict,

it gives her flexibility. Oh, yeah. And one other thing, Emily, if you put that money elsewhere, it's going to have a tax burden on it. And so if you put it in the 529, it goes in tax-free, grows tax-free, you can withdraw it tax-free. You can also change the beneficiary. And it's very loose. This could be spouse. This could be in-laws. It could be children, including stepchildren, foster children, siblings, step-siblings, nieces, nephews, aunts, uncles, first cousins. So the options are endless. This money is not going to go to waste. And I assume you guys have an amazing household income.

Can you tell me what it is? I think it's around $500,000. There we go. And so here's the thing. By the time they're 16, 17, they start applying to colleges, you guys could cash flow this as well, right? Very easily. Maybe, yeah. I don't know.

By the time they're going to college, you're going to be completely debt-free, including the house, right, if you're not already? Right. And so at that point, making $500,000, this is a rhetorical question, by the way, could you cash flow college? The entire audience listening is screaming yes.

Trust me, you can. Right. You couldn't cash flow $80,000 a year making $500,000? No, I could. Yeah, definitely. There we go. So I still would do the $529,000. I don't know what that would look like.

Because strategically, it's a smart move to invest with that kind of tax advantage. And you can always change the beneficiary. You can withdraw against the scholarship. There's so many options there. And then a worst case scenario, when you can withdraw it, it's going to create, you know, income tax and there's a 10% penalty, but that is a worst, worst, worst case scenario. And there's a lot of things you can do with that money. Yeah. And then there's the fact that your kid may show up one day at 16, 17 and go, hey, I want to do this. I know I want to do this, and this is how I can go do this. And it has nothing to do with a four-year degree and the fancy college that you went to that you'd like your kid to go to.

Parents, we've got to wake up. And sometimes those fancy colleges are more about our desires than their desires. Whoa, there it is, Ken. Well, it is. Dropped a bomb right there. Okay, now I'm fired up. Here's one more for you. College degrees have become more about status than actual success.

And that's the reality. And the landscape is changing. So I say all that to say investing in a 529 for relevant education is the way to go, George. You laid it out beautifully. Preach it. And my goodness, everybody but the household dog is eligible for benefits. It's amazing. Fido might be on there.

Who knows? Yeah, we'll dig into that on the commercial break. Dog college is the future. Oh, boy. I'm going to get George's meds for the rest of you. Hang on. We'll be right back. This is The Ramsey Show. Welcome back to the Ramsey Show, where we help you win in your life,

in your money life, your work life, your relationship life. I'm Ken Coleman, joined by George Camel, who is, as I've said twice today. Choose your words carefully, Ken. Huh? Choose your words carefully. I didn't know what was going to happen. Well, I was trying to remember how many times I've said uh uh twice choose your words carefully ken huh choose your words carefully i didn't know what was i was trying to remember how many times i've said it but again if you're watching the show on youtube george is uh in the fall spirit i dress to impress mr coleman uh hey we're fired up we're getting ready to head to dallas this weekend you got your uh your outfit your stage outfit planned you got your backpack i have not thought about it i thought we'd uh we'd make sure we coordinate okay coordinator outfits oh no i don't think we should ever do that that

would be a disaster uh but our smart conference is uh one of the biggest ramsey events we do we're gonna have 6 000 plus people in an arena in dallas texas it's gonna be a fun day since we've done something like that it really has that thing uh the COVID's kept us away. And so we're very excited to be back. Back to Arena. It's going to be fun. We're going to be talking about all of the topics we talk about here on the Ramsey Show. Money, life, marriage, relationships, work, and so much more. Dave Ramsey, Rachel Cruz, myself, John Deloney, Christina Ellis, and of course, George Campbell.

And our special guests, Craig and Amy Groeschel, are going to be joining us. It's an awesome day. It is the Smart Conference this Saturday, October 22nd. Go to ramsaysolutions.com slash events. That's ramsaysolutions.com slash events to get your tickets

now. It's going to be fun. George, I think you should wear a cowboy hat. I can neither confirm nor deny that I purchased one last night. For the event? For the event. Now, this is making me very happy. You will remember years ago, I was

the emcee of all Ramsey events. And when we first went to Dallas, I didn't steal. That's aggressive. I asked a gentleman who was sitting on the second row. If you could wear his hat. If I could wear his Stetson on the stage, and he let me do it. And it was a great idea until I put it on my head.

It was a little sweaty? A little sweaty and a little big. Wow. And so it just looked silly on me. It was like down on the top of the ears, and I looked like I had my dad's cowboy hat on. No one believes it if you're wearing a cowboy hat. The crowd loved it, though. Huh?

No one believes us wearing a cowboy hat. I've got a nice one now. The one that actually fits my head. But I don't wear it very often, and for good reason. Some guys can pull off a Stetson. You know, don't hide it under a bushel. That's how I feel about the hair, Kent. You worked too hard on that to hide it.

Oh, man. I digress. But it's going to be fun. It's going to be a fun event. Make the drive if you're even near Dallas. People fly from all over the country to join us for this. So just because you're not in Dallas doesn't mean you're not invited. That's right.

Going to be a fun day. Love to see you there. Abraham is up in Dallas. Speaking of Dallas, Texas, Abraham is there. How can we help? Hey there. So I'm going to lay out my situation. I graduated this year, and I go on a mission trip next year, starting in July.

That'll be nine months. So I'm basically framing my economic situation around that. I own, well, I have purchased an RV from my grandparents that they were selling that $8,000. I have $6,300 left on that. But I do not have a car. I have a full-time job, and I'm using family vehicles to transit to and from that. My question is, should I pay off that? I need to pay off the RV by the time I leave.

Should I pay that off aggressively? I throw everything except my emergency fund at the RV, treat it as a consumer debt. There's no interest on it, but I do want to get rid of RV treated as a consumer debt. There's no interest on it, but I do want to get rid of the debt as fast as possible. Or should I continue paying $700 a month that I am to be on track to pay it off by the end of, by June and, and by like, just save for a car immediately. Are you living in the RV? Yes, sir. That's my home. So this is your home.

So we can't, we're not going to do anything else with it. And how much do you have in the bank? $1,600. Okay. Well, there's not a ton you can throw at it. Obviously, I would tell you to throw $600 of the $1,600 at it

to kickstart it by an extra month. How much faster can you do that while saving for a car? Because it sounds like you need to split the difference. Yeah, what I mean is I just recently got a job, so 1,500 take-home pay is what I'm going to have. What I mean is, like, should I throw that 1,500 at it after expenses is what I mean. But you still have no vehicle. Correct. So I think we need to get you, maybe we take the next three months of income, get you a vehicle, and then get aggressive paying on this RV loan

that you owe to Grandma and Grandpa. Okay. Is it a personal loan, or do you take out a loan to purchase it? No, sir. It's basically just an understanding that I owe them that money, and I'm paying it. I'm being consistent on that. Okay. Well, it seems like A1 is you need a vehicle to get around in. So knowing you're not going to need it for very long, I would get as cheap of a vehicle as you can that is reliable,

that's not going to have $5,000 in repairs in the next six months. Mm-hmm. How long are you planning to live in the rv uh feasibly i could live in it until probably i get married i mean i'm just as i as i sock away money for a down payment on how old are you i'm 19 okay yeah it's a young man's game ken he can do it oh 100 there's no question about it are you are you are you where are you parking the RV? It's on my family's property in the back corner. We have a fairly sizable property. Okay, gotcha. So you're all set there.

So how much can you save each month for this car if you put everything towards that goal? I could save probably $1,300 for the car. Oh, awesome. I do have a couple of insurance payments. So let's say that's three months. You have $1,300 for the car. Oh, awesome. I do have a couple of insurance payments. So let's say that's three months. You have $3,900. Could that get you a beater car in your area? Maybe off Facebook Marketplace or something or someone you know getting rid of an old car?

Yes, for sure. Probably four months would be even better. Okay. And then after four months, you have a car. Now you can put all of that margin towards the RV, and you're going to have that paid off by the time you leave for the mission trip. Yeah. Okay. I like this plan. Okay.

The question is, can you find the reliable car under $4,000, and it sounds like you're willing to do it. Reliable? I mean, you need to speak to this. It may not be pretty. I know I paid $6,000 for my Honda, and it had a little bit of body damage, but mechanically it was very sound. So just find the ugliest thing you can find that is mechanically sound. That's the key to finding a deal. I mean, you've got a 19-year-old. You've got a lot more options than just that.

I mean, it's like we didn't ask, but can he bicycle? It depends on how intense you want to be. I understand it can get cold in the Dallas area. I don't know where he's going. It could be a far distance in Dallas. I know. I know. You know, he could get a horse.

Oh, boy. You know how I feel about horses, Ken. It may be a great mode of transportation. Oh, George, that's terrible. Hannah is up in Austin, Texas. Hannah, how can we help? Hey, y'all. Thanks for taking my call.

You bet. I'm calling because I have a car. I don't owe anything on it, and it has about a year left. It tells you? Before it goes out on me. Oh, I can tell. Is that a feature? I love her response.

George, I've already thought about this response. I know. So you know this car is going to die one year from today? Approximately. I love it. Okay. We don't have time to break that down. I have a good bit of savings.

I do have a difficult time parting with it, though. I'm just wondering, should I continue to save up until my car completely gives out on me, or should I just bite the bullet, spend the money on the car now? Well, it depends. You're going to have to make a bunch of repairs on it in the next 12 months? The car is worth about $2,000. I need to do around $600 worth of repairs. And then you could sell it for $2,600 or more at that point?

Yeah. Okay. If you'll recoup the cost on it, it may be worth it. How much money do you have saved? About $25,000. Oh, awesome. What's your income? $90,000. Wonderful. Yeah. Yeah. That sounds very reasonable. I mean, why don't you just go ahead and get the car now? She doesn't want to part with the savings. Yeah. Yeah. That sounds very reasonable. I mean, why don't you just go ahead and get the car now?

She doesn't want to part with the savings. Yeah. Part with the savings or part with the car? The savings. Is it a sentimental thing? I don't want to part with the savings. I grew up with a lot of financial insecurity. Yeah, it's a safety thing.

Okay. Well, do you have an emergency fund? Yeah, 12 months. You have 12 months of emergency savings. Wow. What if you eased into it and maybe got a really nice $10,000 car and just kind of eased into this process? Because this is a big emotional thing, George.

Well, yeah, when you have that kind of background, there's some financial trauma here. You have 12 months of savings. You're safe, but your body is saying, we're not safe, we're not safe. And so I might honestly look into some counseling to help on that side. But financially, this is a very wise move. You've done the work. Don't wait until it dies.

Go ahead and sell it as is. Get a new car. George, good stuff this hour. I want to thank the team for keeping us on the air. And you, America, this is The Ramsey Show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from The Ramsey Show on YouTube.

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