The Ramsey Show - App - DAVE RANT: Car Payments Are Straight Up Stupid! (Hour 3)

Episode Date: November 21, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. Starting off this hour is Lauren in Germany. Hi, Lauren. How are you? Hi. Thanks for taking my call. Sure. What's up?

Well, so my husband and I are now past baby step number five, so the kids are out of college. But we don't currently own a home, so we can't really move to step six. We currently live overseas but expect to move back to the States in the next year or two, and at that time we'll buy a home. So here's my question. When we have additional income or money to sock away, would you suggest that we stick it in a savings, trying to have enough money on hand for

a good down payment for that next home so we can pay it off sooner? Or we also have a couple hundred thousand dollars in retirement that are in a mixture of traditional IRAs, 403Bs, and 401Ks that we want to convert to Roth accounts. So would we look at one over the other or a combination? I wouldn't convert them to Roth until I had enough to buy a house. How old are you? 50. Okay.

And what's your household income? About $175,000. Excellent. Excellent. Okay. Yeah, what I would do is just stick with your Baby Step 4. Five doesn't apply. Kids are grown and gone, you said, right?

Yes, sir. Okay. Baby Step 4 is 15% of your income going into retirement. Every dollar above 15% of your income going into retirement that you can save, I would put in good mutual funds, probably just like a no load s&p something simple and just see how big a pile of money we can get there with the idea that you might even be able to pay cash for a house when you got back okay or put just a huge monster down payment on it where you pay it off in just a few years but let's just focus all the extra energy as if that's your baby step six in other words okay yeah pretend you got a house over there at baby step six a mortgage and we're just going to

throw all that money in there to keep from getting there you know to keep from getting a mortgage or to keep from getting a very big mortgage when you get back and then you turn around pay it off whatever if you do take one out there. So good question. Way to go, Lauren. Very, very well done. Alex is with us in Portland, Maine. Hi, Alex. How are you?

Alex. Hello, Dave. I'm good. Thanks for taking my call. How are you? Better than I deserve. What's up? Good.

My wife and I are currently working your baby steps. So we have two loans left, and I wanted to get your advice on which one to attack next. So loan number one is our house. We owe about $200,000 on it. We have a 30-year loan, unfortunately, on it at 3.5%. The house is worth about $250,000, so not a lot of equity there. Loan number two is a commercial property that we own. We owe about $185,000 on it. That one, we have a 20-year loan. It's at 5.75%. And that property is worth about $200,000. So again, pretty much no equity there. Is you running your business out of that commercial property? We are not. No. So it's just a rental. Okay. But it's not got a lot of spread

on it. Yeah, no, it doesn't. Um, it's, it's a family property that I bought for my grandparents. It grosses about 36,000 a year. Uh, we probably profit 10 of that if we're lucky. So, uh, more of a wash than anything, but it's, uh, it's been in my family. So we made the decision to keep it. Gotcha. Okay. All right. Well, and what's your household income? About $85,000. Okay. I'm going to pay off your home first.

The home? Okay. And here's where I came up with that, okay? Let's say that all kinds of nightmare broke loose in your life and things got really bad financially speaking and um in scenario number one you were completely debt free your house and the only debt you had was the old family building and god forbid you lost the building okay that's scenario number one scenario number two is the family building is paid for, same nightmare unleashes, and

you lose your home. Right. That's called risk tolerance, risk management. And so when I look at it through a risk management lens, I say, you know, in a horrible worst case scenario, which we don't think is going to happen, I doubt it's going to happen, I'm not predicting it's going to happen, but'm not predicting it's going to happen. But that's the only real way to help break the tie between these two. Interest rate might break it, but the interest rate is not that different.

And you're not selling either one of them. You're staying there. You've got a good, solid income. I'm just going to chunk away on the house. When the house is paid off, I'm going to chunk away on the building. You're probably going to get them both paid off in less than a decade. That's what it sounds like to me. I think about five years on each you'll be done, or less.

You might do it in eight, but somewhere in there, depending on what your income does from here. But you're going to be in great shape, and none of that's going to happen. But when your home is paid for and the only thing left over here and debt wise is that building you're going to feel different something happens when we get our homes paid for something a switch flips inside of us we relax in a place we didn't even know was tight and so that's all i almost always put the house ahead of others other real estate to be paid off or other business debt or whatever we're dealing with there. Nick is with us in Irvine, California.

Hi, Nick. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? I would like to know if we should be using our extra money on converting traditional to raw or using our extra money for early financial independence.

Okay. Okay, so you're at baby step seven? Correct. Good. Very good. You're 100% debt-free house and everything. Mm-hmm. Very good.

What's your household income? $115,000. Okay. And how old are you? 31. Okay. So you're saying should we invest some money in mutual funds for retirement prior to 59 1⁄2, bridge retirement, so to speak, bridging you up to 59 1⁄2, or should we knock out the Roth? Correct.

Yeah, we have like $200,000 in traditional that we would consider converting. So that'll cost you about $50,000. So if you started going the other way and you said, we're going to build up some money in mutual funds, at what point would you go ahead and pay, let's say you had $300,000 in mutual funds. Let's just pick out a number. You built up $300,000. Would you have converted this before you got that far? I don't know.

That's what I'm calling. I'm not quite sure. Yeah. So there's two ways to look at it, okay? One is $50,000 is not that much in your world. You'll be able to do that very, very quickly, okay? And so it's not going to hold back your bridge outside financial independence, mutual fund investing, to use your phrase.

Okay? It's not going to hold it back, so I probably would go ahead and do it. But if you don't, say, okay, I'm going to build my financial independence fund up to X, and then I'm going to convert it. In other words, 300 is probably enough. I mean, you've probably got a really good start In other words, 300 is probably enough. I mean, you've probably got a really good start at that point. 200 might be enough.

You say, then once I get it to 200, I'm going to knock that 50 out. Then I'm going to go back to my financial independence fund. And you start maxing out everything at that point. And so great job, man. You're killing it. Well done. Well done. This is the Dave Ramsey Show. If you're going to join this team, we want someone who cares and has a passion about what we do.

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Better than I deserve. What's up? So I have a question. I was going to be getting married, and we're trying to decide, should we continue to rent and pay off debt or purchase a home if the mortgage is going to be the same price as we are currently renting? You should rent. Okay.

Because ownership is never cheaper on a monthly basis than renting is. You have to pick up all the expenses associated with owning that are an additional drain. Hot water heater goes out, heat and air goes out, roof leaks, whatever. The other things happen when you have ownership that you don't have. You just call the landlord when something breaks. Dishwasher goes out, you just call the landlord. And so keep renting. Rent as cheap as you possibly can so that you can get out of debt that much faster

so that you can buy because I want to get you to where you can buy as quickly as you possibly can so that you can get out of debt that much faster so that you can buy and uh because i want to get you to where you can buy as quickly as you can but uh it is it sounds logical it sounds like it's a dollar for dollar swap and it's not when all the smoke clears out here in the real world the way houses really work and uh so the insurance cost goes up taxes go up that kind of stuff and you, rent doesn't always go up. So it does most of the time over time. But in general, you're going to come out on the short term while you're getting out of debt cheaper by renting. And you don't get yourself into a pinch that you can't get out of as well.

So, hey, thanks for the call. Lindsey's with us in Pennsylvania. Hi, Lindsay. How are you? Hi, Dave. I'm doing great. How are you? Better than I deserve.

What's up? Well, I'm currently on baby step number two, the early phases, and I had a quick question about my car payment. So I still owe $24,000 on my car. My current income a year is about $42,000. The problem is my first car was totaled back in January, and they gave me $6,000 for my car. I had still owed $12,000. So the $6,000 then was added onto my new car with the car payment.

So I'm at $24,000. And the car's not worth but $16,000 or something. $14,000. Mm-hmm. So it's gone down rapidly. Mm-hmm. Okay. Well, this hole's getting bigger, not smaller.

Mm-hmm. And it's a car you definitely can't afford. Yes, sir. So is this your only debt? No, unfortunately. I do have your only debt? No, unfortunately. I do have some school debt that I'm paying off, personal loans, and credit card debt. Ouch. And you're single?

Yes, sir. And you're working 40 hours? 60. 60 to make $42,000? I work as a bartender and a part-time teller at a bank. Okay, that's the combination of your two jobs. Mm-hmm. Okay.

How clean is your credit? It's a 720. Okay. I would slip down. Who's got the loan on the car? It's a local bank. Yeah, I would slip down and talk to them about letting you sign a note for $10,000 to sell on this car and get you a $2,000 car. Okay.

I'd rather you be $10,000 in debt than $24,000 in debt. Who said it was worth $14,000? I looked on Kelley Blue Book. For private sale or wholesale? Private sale. Okay. Wow. What kind of car is this?

It's a 2014 Ford Edge. Okay. And you paid? $18,000. Six months ago? Mm-hmm. And and you paid? $18,000. Six months ago? Mm-hmm. And it's gone down $4,000? Mm-hmm.

Wow, you overpaid for it, didn't you? Yes, sir, I did, and I bought every single insurance policy I could because I didn't want the same thing to happen with my last vehicle, where I end up having to pay. You got the gap insurance. Do you have extended warranty this part of that $24,000? Yes, I do. Ah, that's probably a couple grand, isn't it?

Mm-hmm. Yeah, cancel that. Okay. That'll drop a couple grand off of this. So now we're only borrowing $8,000. Okay. And, yeah, that's a big help. Okay.

And the gap insurance, is that financed in this? Yes. Well, we'll be getting rid of the car so you can get rid of that as well. So maybe you're not $10,000 in the hole. Maybe you're more like $7,000 by the time you cancel both of those things and get the bank to let you sign a note. So have that branch manager that's at the local bank there sit down with you and have those numbers.

Have what happens if you cancel the gap and what happens if you cancel the warranty and then what that brings the balance down to, if that was applied to the balance, if that's built into it, and see if you can't get this down to $7,000. That's a big help. Yes, it is. Yeah, and then just get you a little $7,000 loan instead of a $24,000 loan. You may have to borrow in a couple more grand to get you a $2,000 car, you know. But let's get a hoopty for right now, and let's get some of this mess cleaned up,

and then save up and pay cash for a little better car later on. And then move up in car only with cash in the future. And if you're driving a cash car, it changes the insurance situation as well. You're never going to be in a gap because you obviously have it all paid off, so there is no gap. Vicki is with us in Vancouver, Washington. Hi, Vicki. Welcome to the Dave Ramsey Show. Hi.

Thanks for taking my call. Sure. What's up? So my husband and I started listening to you after we did a really stupid thing. We bought a property with the intention of fixing it up and renting it, and we're just about finished with the fix-up, and we are not going to make enough money in rent to pay the expenses. And so we're trying to decide if we just suck it up and deal with the deficit.

Oh, so you owe more on it than it's worth, too? Well, technically we don't owe a thing on it. We did the really dumb thing of taking money out of our paid-for house to purchase it. So we actually own the little picture. How much have you got invested in this property total? $205,000. And what will it sell for? Bought it for $158,000.

And we're not going to be, yeah, we will, the rent that we can get will not equal the mortgage payment and the utilities. So do we keep it and pay the deficit ourselves for several months, a couple years, or sell it, take a loss, and move on? Yeah, so you've got $205,000 in it, and you finance that against your personal residence. Correct. And so how much do you owe on your personal residence total? It would be the two.

Our personal residence we paid It would be the two. Our personal residence we paid off in nine and a half years back in 2005. Wow. So, yeah. Wow. And then some get-rich-quick real estate crap bit you on the butt. Okay. So you've got $205,000 owed on your personal residence, what will the rental sell for?

We might be able to get between $2,000 and $2,500 for it. So then, you know, having to pay the realtor an additional $17,000, that's kind of what I'm thinking. I'm thinking, well, if we can get $2,000, we're actually going, I mean, if we can get $2,700, we'll actually end up with two you know trying trying to get just enough so we can walk away with exactly what we need to but we may end up losing seventeen thousand dollars is my guess now that'd be if you sold it for 205 you're not going to sell correct yeah let's not get too desperate here but let's put on the market and sell it. Take your lumps and be done.

You made bad decisions all the way around on this. You paid too much for it. You spent too much on it. You financed it on your personal residence. So there's like three strikes against this deal. And just rip off the bandage and be done with it is my thought. Yeah, exactly. What's your household income?

It is, I'm a freelance writer, so that's a joke. My husband makes $60,000, and I make about $16,000. Okay, and how much money? Do you have any money in savings that's not retirement? No, we just have baby step one, and then we just paid his truck off. So we don't have any yeah so we're good on that end but yeah we're very cash poor okay so you're gonna end up not being great assets but we're very cash poor you're not going to be the bottom line is you're not going to be able to

completely pay your home off with this transaction it's going to take you a little while to pay that whatever whatever that's my guess as worst case scenario, and I'm willing to accept that if you think that's a good idea. That's exactly what I would do. Okay. Yeah. I think you take your lumps and you say, we learned our lesson. Real estate's not a bad idea. Real estate's a horrible idea when you're broke, meaning you didn't pay cash for it.

And it's a horrible idea when you don't know what you're doing and you pay too much for it it's a horrible idea when you put too much into it after you bought it and um you know it's just it you have to do it right or it doesn't work and when it works it's fine but none Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance. This means there are no hidden fees.

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NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Amy's with us in Kansas City. Welcome to the Dave Ramsey Show, Amy. Hi, Dave. Thank you so much for taking my call. Sure.

What's up? Well, here's my question. We just finished Baby Step 3 and entered stork mode. Should we start Baby Step 4 and 6 now or just pile up money? So how much is in your um uh emergency fund 20 000 okay um i think you can go ahead the only reason i was ahead yeah i mean go ahead with baby steps four five six i mean there's not if something occurred with a pregnancy you have twenty thousand dollars right right right you have a fully funded emergency fund. That's what it's for. I only tell people to pause it in the other baby steps because they don't have their emergency fund yet.

Right, right. But you do. You've done a great job. Congratulations. Thank you. So you're debt-free, huh? Yeah, it's very exciting. We love your show.

Big fan. Well, I'm honored. How old are you guys? I'm 31 and my husband's 33. And what number baby is this? First. First one. Awesome.

Yeah. Yeah, super exciting. Well, very cool. Good for you. Yeah, I think you're okay, don't you? Yeah, I just wanted to see what you thought. I haven't been able to figure out what you would say about that. I've only heard you talk about baby step two.

Yeah, well, it usually comes up in Baby Step 2 or even 3, but 3 is obvious. You're just the same thing. You're piling up money. But you've got your money piled up. I don't get this question very often. That's why you probably couldn't find it. But it's a really good question, a really good point of clarity, because the other ones you just don't have the money yet,

and so we want to stop our baby steps temporarily, push pause, if you're trying to get out of debt, and build up some cash and be prepared for pregnancy, and then when mommy and baby come home and everything's good, you've heard that a thousand times, right? You dump all that on baby step two and go on, but you're past that. So way to go. Good job. Congratulations.

Victoria is in Los Angeles.eles hi victoria how are you hi dave i'm fine thanks sure what's up um so i'm calling because um on behalf of my mom she has a life insurance policy that's specific life and it's a whole life policy that she bought in um 1981 and um in 1997 she had some, and I've been taking care of her ever since. And going through a bunch of boxes recently, a few years back, not really recently, I realized that she had a life insurance policy that she was still getting mail on, and they were premiums, and I asked her what it was, and she said she thought she stopped paying on that a long time ago and that it wasn't valid.

So I called them and found out that it was still valid and what was happening is they were paying the premium for her and putting a loan against her policy oh nice okay so where does it stand today so today well last year what i did today it's um that's what I was going to call you about. Right now, so last year there was some money in there, they call it a paid up cash value amount, and I don't know how she had that because they have a way of accruing money, but you still have a loan against the policy, so I'm not sure how that works because I'm not really privy to the industry like that. But there was money in there, and it was several thousand dollars, and she owed something like $35,000 in a loan against the policy that was accruing interest at the rate of 8%.

And I was talking to a customer service guy over there last year before I was paying the premium, and I was trying to hash this out with him and see if there was something I could do to stop the gap, you know, stop the bleeding. And he said, well, you could take up all your paid additions, paid up additions, and pay off some of the gap, you know, stop the bleeding. And he said, well, you could take up all your paid additions, paid up additions, and pay off some of the loan, and then you'd have a smaller loan that you could, like, start making payments on the policy and start.

Okay, so you have a $35,000. She has a $35,000 loan against her cash value. What that tells us. But she did have that. And then we talked it over, and she agreed that we should go ahead and pay that down. Oh, okay. And so we did. And now there's zero paid up additions. The total death benefit before the loan is $25,000. What's left in the current cash value before the loan is $17,125. And the current loan debt is $14,462.76.

The current net debt benefit after the loan is $10,537.24, and if she were to just cash out today, the current cash value is $2,662.24. Are you not tired of getting screwed yet? No, I think... Cancel this crap today. Right, so that's what I'm calling, because they sent me a check for $350. They sent her a check for $350,208. It looks like they took the annual dividend of $9,1258,

and they paid off the annual premium of $5,6050. You realize what's happened? Let's kind of talk through this for a second, okay? Here's why you should cancel it today. Once you understand it, you'll go, oh. Okay? So basically, whole life life insurance, it costs about 20 times more than term life insurance.

That extra 19 times that you're paying in goes into a savings account called cash value. You pay extra, a lot extra, to build up the savings account. Okay? That's her cash value. And then what did she do? She borrowed against her cash value. She borrowed her own money and paid them interest.

This is why I hate these people it's such a screw job i mean i feel like she's been paying on something for since 1981 and it's gone i mean the money's just gone and so here's what happened here's what happened not only did she borrow her own money and pay them 8% to do this, but then they took the premiums and borrowed more money against her savings so that they could keep their stupid policy in force. So she's been borrowing her own money and paying them interest to borrow her own money to buy a life insurance policy that now nets her $10,000 after all these years if she dies,

or $2,000 net of all these loans if she cashes it in today. This is not going to get anything but worse. It's a trick bag. And because there's a loan on it, like if there wasn't a loan on it, I could just leave it alone, I guess, and not have to buy it. So canceling it, can you roll it over into a term life? You don't need to. Just cancel it.

Okay. Just cancel it. Her health is bad. But, you know, the money that is tied up, take the $2,000 and any of her other assets and start setting that aside for her burial if, God forbid, something happens to her. But this is just, it's gone. I mean, they have used her up is what it amounts to. And you can see that in the math, can't you?

Yes. Because I thought paying all those, and then I was thinking now, in hindsight, should I have even considered paying off? No, you should have canceled it before you did all the paid-up additions out, but it's not the end of the world. You can't pay taxes on that money. There's no taxes on it because your basis is – I'm sorry? They used the cash last year, and they used the cash to pay off some of the loan,

some of the loan down. They called it her paid-up additions. She got, I guess, a W-9 w-9 her 1099 rather and she had to pay taxes on whatever that amount was and it was like eight hundred dollars and some i don't know you shouldn't have there shouldn't have been any taxes on it because your basis in a whole life policy is the total of your premiums paid in and there's no possible way that her premiums that she's going to get out of this thing, what she has paid into it. Never in a million years.

So what you can do is file an admitted return when you cash this one out. Because all you got to do is go back and look at all the money she's paid into this. Okay? Okay. And she did not get it all out. No. And so there's a net loss. There's not a net gain.

And she's too old, apparently, because I talked to Larry and Xander yesterday, and she's too old to even buy life insurance. Yeah, but she doesn't need life insurance. I mean, she doesn't have any life insurance now. She just got a trick bag now. I mean, $10,000 worth, but my God, what you're paying for this $10,000 is astronomical. Yeah. It's not worth it.

So an omitted return is a form that I can get from the tax preparer. I'm sorry, say that again? To file an omitted return. An amended return. You do that when you file our taxes this year. Go back and amend last year's filing because the taxes you paid on that $800 shouldn't have been paid. Oh, it was taxes on $22,000. Did you get a $35,000 loan?

Oh, my God, these guys. No, you need to get proper documentation from them on the total of the premiums paid in. That is your premium. I mean, that is your basis, and it's way in excess of $22,000 God man what crooks unbelievable so yeah you got to get out get away from these people as fast as you can Our scripture of the day, Matthew 19, 26.

But Jesus looked at them and said, With man, this is impossible. But with God, all things are possible. Walt Disney said, It's kind of fun to do the impossible. But with God, all things are possible. Walt Disney said, it's kind of fun to do the impossible. Yeah, it is. I agree. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee.

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Use the promo code RAMSY. Blinds.com. John's in Virginia. We paid off our car in April, and last week I hit a deer totaling the car. Dead gummit. The insurance payout is $6,500, and that won't pay for a car that we are willing to drive. Why? The car you were driving was $6,500.

Why were you unwilling to drive a $6,500 car? Should we fully finance a new car and save the settlement money or put it toward the purchase price to reduce what we have to finance? John, you're too stupid for me to help. Seriously. That's the dumbest thing I ever heard in my life. You just emailed dave ramsey and said how do you finance a car and you knew what you were doing that's just too dumb to help listen if you didn't get what your car was worth out of your car you have a case against the

insurance company but otherwise dude you were driving a $6,500 car. So get you another $6,500 car and quit your whining. Wah. Call the wah-ambulance. I don't like my $6,500 car because a deer ran out in front of me. Wah. Well, if a car is an $8,500 car, then you need to sue your insurance company for $2,000. You shouldn't have accepted the settlement.

But apparently your car was a $6,500 car, so go buy another one until you have the money to do that. Should we fully finance a new car? Give me a break. Seriously. Folks, let me help you with this, all right? The average car payment in America today is $502 over 84 months, according to the National Auto Dealers Association. $500 a month invested from age 30 to age 70 is between $5 and $6 million in your Roth IRA.

I hope you like your stupid butt car. That's just dumb. You could have retired with $5 or $6 million instead you're driving something that's going down in value like a rock. And calling yourself cool at the stoplight to impress people you'll never even meet it's just nutty this car culture is nutty and i'm a car guy i love cars i drove a really nice roush ford down here a while ago, 600 horsepower. It's a freaking beast. I love cars, but they all go down in value like a rock. And if you want to stay middle class the rest of your life, I'm not going to be mad at you, but it's stupid.

The best way to stay middle class is to keep a car payment. Ah, you're always going to have a car payment. The little man can't get ahead. What is Eeyore your spirit animal? Seriously, little man can't get ahead. What is Eeyore your spirit animal? Seriously, little man can't get ahead. I'm stuck. It's my fault. I hope to come in on company.

I'm a victim. You're not a victim. You're buying crap you can't afford with money you don't have to impress people that you don't even really like. You're not a victim of anything except yourself. I've been a victim of myself, so I know what that looks like. I've done so many stupid things in my life. And you know whose fault it was? Stupid Dave.

And when smart Dave took over and we didn't feed stupid Dave along, stupid Dave finally starved out. And I got tired of being broke, y'all, so I quit making broke people decisions like car payments. Car payments are straight-up stupid. And let me just tell you, man, it's amazing. You read these articles and these supposed financial things, this crap like CBS Market Watch or Yahoo Finance and, oh, God help you, CNN Money, right?

You read through there, all of these journalism students that are 27 years old with student loans coming out their ears are writing these articles for these finance lines, for these finance blogs or whatever they are. I can't even call them what they're called. But they're writing these articles, and they can't even do math. But they make the assumption you're always going to have a car payment, so here's the best way to have a car. And, you know, for people who can't afford it,

well, you know why you can't afford it? Because you've got payments. That's why you can't afford it. That or you don't work. And if you don't work, you don't need payments. So if you work and earn an income, the last thing you need to do is give all your money to somebody else and scratch your dadgum head and wonder why you're broke.

You're broke because you were stupid. Because you gave your money to somebody else to drive something you couldn't afford to drive. It is that simple. If you can't afford to pay for it, you can't afford to go on vacation, stupid. If you can't write a check and pay for that car, you can't afford that car. It's costing you $5 or $6 million in the scope of your life. You could have retired with dignity and changed your whole family tree and driven anything you want to drive, by the way, which is what I drive now

because I lived this way for 20 years now, 30 years years now coming up on 30 years i've been doing this god man i'm getting old that's what makes me mean and angry like that it's just i'm just i just have no patience for this i mean what should i do take the money and put it in the bank and get a car payment give me a break not unless you want to be broke the rest of your life. Get away from car payments. Because if you don't have any payments, you know what you have? Money. How many?

$500 a month for 10 months in your bank account? It's called $5,000, isn't it? Can you buy a good car for $5,000? Yeah. 10 months later, could you buy a $10,000 car? Yeah. Because your $5,000 car didn't go down in value. So $5,000 car plus $5,000 more in your account. Oh, do it 10 more months. Now we're at a $10,000 car? Yeah, because your $5,000 car didn't go down in value. So $5,000 car plus $5,000 more in your account.

Oh, do it 10 more months. Now we're at a $15,000 car. We're 30 months in, 2 1⁄2 years in of living grandma's way and paying cash for it. Out of that 2 1⁄2 years, 10 months you drove a $5,000 car, 10 months you drove a $10,000 car, and 10 months you drove a, well, there's none of the 10 months, that's it. Wait a minute, 10 months you drove a $5,000 car, yeah, and 10 months you drove a $10,000 car, and then 10 months you're driving a, 30 months you're driving a $15,000 car.

So it's not like we're saying do this forever, but drive like no one else so that later you can drive like no one else. Make different decisions than broke people make. I mean, make different decisions. If you want a great marriage, find people that are married and have a great marriage and do what they do. You've been married 16 times. I don't need your advice on marriage.

You don't know anything about marriage. You know a lot about honeymoons, but you don't know much about marriage. I want to find somebody that's winning at whatever it is they're doing. If you want to grow hair, you don't need to ask me. I'm not good at it on top of my head, okay? There's not much there. So I can't help you with that. If you need to know about hair care products, I can't help you with that.

Mine is hand soap. I don't have hair care products i can't help you with that mine is hand soap it's not you know i don't have hair care products i haven't seen a barber in a decade sam's clippers that's it right there number three right there it's over you know i can't help you with that if you need if you want to know about hair gel get somebody that has some hair and know something about hair gel but learn from somebody who's winning, for goodness sakes, whatever it is you're doing. And if you look around at all the broke people, you know what they have?

Freaking car payments. No plan and no communication with their spouse. Why live like that? You get the decision. You can change. You can decide to change. You're not a victim of anything except your stupid butt decisions. That's the only thing you're a victim of.

So make a decision that's different. I'm going to decide to treat my spouse better. I'm going to decide to spend less than I make, a concept Congress can't grasp. I'm going to decide. You can decide I'm going to do a budget. You can just decide tonight. Ready? Ready, set, go. Ready? Set.

Go. You can do this. You got this. You can do it. There's no reason to be like all those other people. You can do it. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.