The Ramsey Show - App - How Much Car Can I Afford? (Hour 2)

Episode Date: September 23, 2022

Rachel Cruze & George Kamel discuss: Helping an elderly parent deal with their financial mistakes, How much to spend on a new car, Cleaning up a financial mess, What to do with an inheritance. 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

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studios. This is the Ramsey Show, where America hangs out to have a conversation about your life and your money. I am Ramsey Personality, Rachel Cruz, hosting this hour with Ramsey Personality, co-host of The Ramsey Show and co-host of Smart Money Happy Hour with me, the new podcast that's out, George Campbell. It's real, Rachel. We did it. This has been an idea for many, many, many months, and it's out there now for all to enjoy. The first two episodes of Smart Money Happy Hour released yesterday.

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Have a little entertainment when it comes to pop culture, conversation, and some money. While you're on your run, while you're in the car. You'll learn something. You won't even know you learned it. You learned something. It's like inception. But you won't even realize you've learned.

Like this show, we give you the facts. It's a spoonful of sugar. That's right. But the Smart Money Happy Hour, you know, it's great. Check it out. Make sure to check it out. Wherever you listen to podcasts. All right. So we're going to the phones this hour. We have Claudia in Detroit to start us off. Hey,

Claudia, welcome to the show. Hi there. I want you to know, I realized I have learned much from you and your father. So thank you. Oh, well, thank you. I appreciate that. How can we help today? George, I'm not ignoring you. Oh, it's fine. I was just enjoying the sentimental moment between you guys. I love it. How can we help? Here's my dilemma. My mother's 84. She has an $86,000 interest only loan on her home. I've been trying to help her since my dad passed six years ago to really be tight on everything she is tight she is not a spendthrift but the numbers are hard and you know with an interest only the variable rate it we knew it was coming right we knew it was going to raise I checked into last year trying to get it refinanced and the problem was she couldn't afford a traditional payment of a true mortgage.

So my question is, should I take money out of my mutual fund to pay it off? You know, assuming that then, of course, I would first cash out my emergency fund and the savings we have. Sorry, but you can imagine this is emotional. Yeah. But then I'm like, I don't really know, like, what would be the tax ramifications for me? Like, if I take that money out, then where do I go from there? Is that going to affect me? I talked to her today.

I said, Mom, I could, you know, you and I could do DoorDash where I like, I'm truly doing it, but I'm driving. She's with me. So she's going to have it on her income level. Right. She's 84. Yeah. I've got three brothers. They all help. They all are very good. They're all united. But at the same time, you know, I don't know what to do. I don't even know what's the smartest thing. I'm so sorry, Claudia. Well, number one, putting yourself in a terrible financial position is not the solution, so we have to find more options here. You looked into refinancing. Could we downsize her? Is there an apartment or a condo that we could move her into

with a much more reasonable mortgage that then maybe the kids can help with? You couldn't find anything cheaper than what she's paying in the interest only. I mean, right now, even though it went up, it's $438,000. It went from $274,000 in January to now $438,000. But obviously, they raised rates again yesterday. So... The problem is with the interest-only mortgage, she's never going to touch the principal. Yeah, believe me, I know that. So it seems like it's a good number, but we're not making any progress at all.

How is she eating, Claudia? Where does she have money to live off of? Social Security and a very small, like $260 pension. Okay. So what does that add up to per month? So we're talking $2,550 a month. Okay. What other bills does she have? So she does have the car and I tried to not get her into a new lease,

but we couldn't find something that would work for her. How often is she driving around at 84? Every day. I would say she goes somewhere every day. Like doctor, grocery store, hanging out with friends? What's she doing? Church, grocery store, doctor, church. She goes and walks.

She's very conscious about staying as healthy as she can and active. I think we've got to get out of this lease. Does she have any other debt? No other debt. Okay. What if the kids could scrape together and buy her a used car and we get out of this lease situation to free up some of that income and see what she could afford then as far as housing?

Yeah, that would probably be a good idea. I wish we would have done it before she was born. But, yeah, that might work. Because at this point, we can't just let her do whatever she wants while we finance it because she's broke. No, and she's not that way i mean my parents are godly people but they had a major flaw is in money and they laid up treasure for us in heaven where it will never be destroyed and i get totally what you're saying there's no excuse making going on here but but taking out a lease

at 84 is not helping anyone, especially herself. Does she know that? This lease is hurting her? Yeah, I don't think... You know, you wouldn't be able to have a conversation without her knowing that. Yeah, she knows they screwed up major on finances. That's okay. We're not here to shame her.

I'm just here to help her get out of this lease to free up her income, because that payment could be helping her afford housing. Right. So what is that payment every month? The lease payment is, let's see here, that'd be $314 a month. So that extra $314 coming in every month, would that help her afford a mortgage, if we switch to a conventional mortgage? You know, it still was, it was over $1,100 when I did it last fall when rates were lower.

What is the mortgage size? $86,000. What's the equity in the home? If she sold it today, how much could she sell it for today on zillow it says 130 i would say we clear it by 120 for sure that's what i say and claudia i mean that just given her situation everything um how terrible this mortgage is um I mean, I would be tempted just to sell, get her out, and free up her life out of this terrible mortgage. Yeah, fix the car situation, and then look to see, okay, yeah, what is something just, and again, you know, she's, you know, she's in her early 80s. So she still could have a great 10 years left right another decade if she's healthy um so finding something for okay we have 10 years left you know just in

just as a um as a math equation to look to see okay what's a what's a small condo nothing fancy anything in law suite with one of the kids if If she's able-bodied, she's driving around. Because Claudia, yes, cashing out any retirement on your end would not be smart. Wiping out your emergency funds and putting your family at risk, which is so generous and I hear your heart in it is so good, but it doesn't help the situation because she's still going to have this terrible loan still attached to her that she's going to have to make payments on, but it's not even hitting the principal. So if I were her and you guys i would i'd sell everything the car and the house get the equity and go find something small I am Rachel Cruz hosting this hour with George Camel. We are taking your calls on your life, your money, your career, your relationships, anything and everything.

So give us a call at 888-825-5225. Up next is Jared in Baltimore. Hey, Jared. Welcome to the show. Hey, George. Hey, Rachel. I am enjoying the show. I've been watching every day.

You guys definitely set me up for my financial life. I actually started taking the course in high school and so I'm 25 now. Wow. Yes. So I wanted to ask a question that I think I didn't really see a good answer on. So I'm looking to upgrade my car. I have a 2006 Toyota Corolla. That's what's up. And it's still ticking, but it's got 150,000 miles and I'm looking toward the future. George, stop. Jared needs a new car.

If he's been doing this since he was in high school, he's going to be fine. I was impressed because it's an 06. It should have more miles than that. So that's pretty good. Oh, you're safe for the year. Okay, Jared. Well, way to go, man. At 25, driving an 06, that takes a lot of swallowing your pride. That's when George and I graduated high school. 06?

I was 07. You got a year on me. You were, oh, okay. That's all right. We're young. We're the young crew. Jared, you've been following this stuff since high school, and so hopefully you have no debt and an emergency fund?

Absolutely, yes. Love it. And I make about $80,000 a year and I have about 40 saved. And my question is, I know I've heard Dave, you know, he tells us to not purchase a car more than half of our annual income, but it still just feels like a lot spending 40. So I was like, I was looking at the market, and especially right now, like used cars are still crazy. I know it's going down, but like what would be a number that you guys would see just given my income

and how much I have saved and no debt? How much would you guys feel safe? I mean, you're right on with your parameters there. But again, $40,000 when you've been driving an 06 Corolla, you feel like you're going to buy a Maserati. So do you have a car in mind? I would more focus on what's the car that I would like to buy and then what year, make, model, mileage am I looking at

to get it within a decent parameter? So that's how we look at this is just those ratios. We just don't want too much of your world tied up in a car. Yeah, because does $40,000 include your emergency fund, Jared, like is all of that, or is this just for a car specifically? Oh no,

this is just, this is just for, for a car. Like I'm saving. And do you have any other upcoming goals? Are you in a house? Are you wanting to put a down payment? Yeah.

That's the thing. Like that was the other thing that was floating around in my head was like settling down and getting into a house. But I mean, I'm kind of in a situation right now where I'm dating somebody and we're getting pretty close to marriage. And so I don't know if I want to settle down for a house just yet. No, you don't need to buy a house right now. But the question is, how much of that could be used towards a down payment? In 12 months.

12 to 18 to two years from now when you have $20,000 sitting there and you bought a $20,000 car. Exactly, yeah. And that's kind of the idea I've been throwing around. You're probably going to laugh, but the car I want is just another Corolla. Yes. Great.

You don't laugh at that. That was my goal. Toyota has my heart. I love Toyota. I was driving a Honda Civic and my dream was a Honda Accord. That was me really dreaming big. That's great. I was driving a Honda Civic, and my dream was a Honda Accord. That was me really dreaming big. That's great.

I mean, that's a great car. So have you seen what those cost? Yeah, so I wanted the new crossover that they made. And I think they start at around $30,000 for brand new. But obviously, I could get the – I think they're pretty new. So, I mean, I think the oldest I could get is like a two-year-old used one. I think those run between 30 and 35. But like I said, you know, the used car market's kind of crazy. But would you guys recommend spending less, like you said, and saving

some of it? It just depends on how, so if you have no current plans to get into that house, and obviously you have that savings muscle built up. So when it comes time for you to get that down payment, I think you're going to do it really quickly. And so I'm not as worried about that. I think a $30,000 car is reasonable for how hard you've worked and how diligent you've been. So what I don't want you to do is feel guilty after you buy it and have buyer's remorse because you've earned this, man. You're doing it the right way. So I would make that your goal. Say, hey, can I get it for 30 instead of 35? Let me try to really do my research, do my due diligence and find that quote deal. And of course, make sure you get a pre-purchase inspection and don't fall for any of their warranties and fees and all these things

are adding on. Yeah, because the hard thing is even even if the brand new one's $30,000, so much of the markup right now still within dealerships is still insane. So, yeah, finding something that is reasonable, probably used. How much do you think you can get for your current car? Yeah, you know, I thought about that, too. I mean, it's in pretty good shape. I looked at the Kelly Blue Book. I mean, I think it's like around $6,000. That's great, which is awesome. Yeah. Which makes you're going to be spending I mean, I think it's like around $6,000. So I could end up selling that to you. Which is awesome. Yeah. Which makes, you're going to be spending, you know, $24 to $28 on this thing out of pocket. Yeah, true. So that'll make you feel a little bit better about it. But I would not feel guilty. You're still going to have money left over for a down payment that you can then stack on top of

that. You've done this thing so well, man. You're just like the poster child of what it looks like to follow these steps early. Well done, Jared. Some people take the high school class and they just laugh at us, make fun of us, don't listen. Oh, yeah. Go rack up a bunch of debt and you, Jared, you listened. And now you get to go buy a new car because you have no debt. You have a fully funded emergency fund and you are just killing it it's awesome all right up next is Sabrina in New Jersey hey Sabrina welcome to the show hello how are you guys today we're doing well how can we help um I just recently moved back home um I was in a pretty bad relationship um we were living together and I moved back home like six weeks ago so i just got a job but i have so much debt um i have student loans um foolishly i got two cars and both of them went into repo um i have a couple of credit card bills, some things in collections,

and I owe some family members. And I don't know where to start and I don't know how to manage. And it's a little overwhelming. And I just wanted to see how and where to start, essentially. Well, kudos to you for moving back home and getting out of the situation you were in. It did not sound good from how you described it. So I think that's a remarkable, really courageous step that you've done. And yeah, and I'm excited you called because it kind of feels like this fresh start for you, right? From that side and to say, okay, I'm ready to get my, my money in order for the first time ever. So can you give us some numbers, Sabrina, of where you're at? I know you said you had a lot of debt.

You just listed them out. Do you have specific numbers for each of these? Not all of them. I have about 112 in 112 K in student loans. The two cars just went to repo like maybe two months ago i haven't gotten letters to see how much i owe on how much roughly do you think it'll be maybe 10 to 15 each okay so let's say 30 max okay um my credit card bills i I have $4,000 in credit cards. I owe family members around $8,000. Okay. And collections, I don't necessarily know exactly how much, but I know it's ballpark around $2,000. Around $2,000. Is that credit cards, the things that are in collections?

No. The apartment, I'm sorry, the home that we were renting was in my name. And he stopped paying bills and things like that because it's in my name, you know. Yep. You get the brunt of that. You get kicked out of somewhere. Yeah. So what are you making with this new job? 70.

Great. Okay. And is it in your field of the degree that you got? Essentially. I have a master's in public health, but I'm in the healthcare field, but more in an auditing capacity. Okay. Cool. Do you have any savings, Sabrina?

Any cash just in the bank? No. No. Okay. Okay. So what we teach to start out, your very first goal is i want you caught up on anything so i want you dealing with the collections aspect um looking to see okay where can i throw any extra money to just get this house out the 2000 i want it out of your life

because you're not connected to that life anymore and i want you out of that as soon as possible and it's one of the lowest on the list which is. And then your next goal is to save up a thousand dollar emergency fund. And then after you do that, you're going to list out all of these debts, smallest to largest. So you're going to knock out the credit cards. You're going to knock out the family loan. You're going to deal with the car loans after that. And then you're going to knock out that student loan. And with your income, it's going to take you a little bit, but I want you to get an extra job, Sabrina. And I want you to go crazy. Hold on. Jenna's going to pick up. She's going to take you a little bit, but I want you to get an extra job, Sabrina, and I want you to go crazy. Hold on. Jenna's going to pick up. She's going to give you a 12-month membership to Financial Peace University, which has every dollar budgeting app

to walk through it. Good luck, Sabrina. welcome back to the Ramsey show up next we have Michael in Canada. Hey, Michael, welcome to the show. Hi, thank you for taking my call. I really appreciate it. Yeah, absolutely, Michael. How can we help? Yeah, no, so I am a millionaire, and recently my mom passed away about a couple months ago. I'm sorry.

And I'll be inheriting some money. Yeah, thank you. I appreciate that. Yeah, so I'll be inheriting about $500,000 and just trying to decide what to do with that. Yeah. Wow. Well, sorry to hear about your mom's passing. It sounds like good money management runs in your gene pool, which is really cool to see that she left that

kind of legacy. Yeah, well, we grew up really poor. So I, you know, it's just, I think we, because we grew up poor, we were just kind of, you know, learn to manage your money better kind of thing. Yeah, absolutely. You guys have changed your family tree. So $500,000, what is your next money goal? Where are you at in the baby steps? I guess I have no debt and just a mortgage, my personal mortgage, real estate. Cool. I do have business real estate as well, and there's debt on that, but that is a new company, and so it's managed differently. Okay. What's left on your personal residence?

About $545,000. Oh, wow. So you could almost knock this thing out. Do you have cash in the bank on top of that? I do, yes. How much? So personally, about $20,000. No, actually, 30,000. Okay. Is that beyond the emergency fund or is that included? That's including the emergency fund. Then beyond that would be just that 20,000 in the checking account. Okay. So, I mean, if I'm in your shoes, I'm throwing that, most of that at the mortgage. I mean, of course, there's only three things you can do with this money, give it, save it, and spend it. So I would look at giving some of it with generosity. I would look at, you know, spending some of it and enjoying it. And then I'd look at throwing the rest of it at the mortgage to clear this thing. What's your

mortgage payment every month? $2,400 a month. Yeah. Think about that coming back into your life in the next, probably the next six months, you could have a fully paid for house. What's the house worth? About $845. Wonderful. And then what do you have in retirement? So I guess like the, so I have nine rental properties.

So that's kind of towards our retirement and legacy planning. And then in Canada, we have RSPs and TFSAs. So I have about $250,000 in that. My wife has about $200,000. And then we have our business accounts. So in retained earnings, she has about $275,000 in her account. And I have about $73,000 in the account. Wow.

And, yeah, so just kind of... $275,000 in her account and I have about $73,000 in the account. Wow. And yeah, so just kind of, so I was just wondering, do I, I've gotten wealthy through the real estate business and I work as well. So it's kind of something that, because we were poor, I just started investing when I was 25 years old and just kind of. It's amazing. You went hard, man. Like nobody else so that I can live like that. Yeah.

So, so basically I'm like real estate is kind of where I'm comfortable investing outside of whatever's in the RSPs and things like that. So it was just kind of like, should I buy more real estate as a rental so that for my retirement savings, legacy planning, kind of building my own pension kind of thing. Are the nine rental properties that you have, Michael, are they all paid for? No, they are leveraged. They're about 40% debt to equity.

So I have about $2.91 million in real estate. Of that, I owe about $1.185 million, so I have about $1.725 million in equity in those. Yeah, yeah, that's great. I would still focus on the personal and start paying off that primary residence, and then I'd work my way paying off the rentals. Right. I want you to have that kind of peace on the bed that you're sleeping right okay yeah so that's what i'm actually stressed by sorry go ahead no no yeah and i know and you guys are in a great position what you've done thus far i mean it's it's impressive um you've done an incredible job you have a great income you guys are diversified you have real estate you got uh your retirement you guys are wise yeah

you're feeling good you don't feel you don't feel the pinch um like you're saying but i would encourage you there's just this factor when it comes to money and it comes to debt that it can't be put on a spreadsheet and there is just something to be said about this freedom when you don't owe anyone anything and you have complete say over what goes on. And so that's one of the primary messages we talk about on this show. And so it makes us a little weird because I know the real estate game and you can make great money doing it. It's countercultural. real estate game and you know you can make great money doing it but you also have you have risk still into play um over a million dollars you know with the with the rentals even though i know they're great and you have i'm sure you have tenants and everything's working fine but there

is still that level of risk there that you have and so to be able to use this money from your mom um to set you guys up even better um to do things that you probably thought were never even possible. It's an incredible thing that you can use this money as a tool to help get you guys there. So I'm with George. I would throw it at your primary residence. I mean, I feel like you guys are enjoying life. Like you said, we don't feel stressed. I'm sure you're enjoying life. So you could spend some of it, but I feel like you're spending some money anyways. Giving is always a great piece and a needed piece in this formula as well, Michael. So if you guys aren't in the habit of being generous, this could be a great start and using some of this money that your mom left to give some of that. But I would throw,

yeah, majority of it at your primary residence. I would pay it off and just get that mortgage knocked off. And just that freedom. I mean, again, there is just something to be said when you just don't have that mortgage payment and then start looking at the rental income or the rental properties that you have and start working your way out of debt on those. And then the amount of money that you'll have coming in from not just your income, but not having payments and the passive income from paid for real estate.

I mean, it just snowballs from there of what you can do. And that's a huge legacy to leave your family because you guys are on the path. I mean, you're doing a great job when it comes to the numbers. But I would just, I would turn a few of those knobs and get out of debt quickly. That's a good word. That's right.

Okay, so, George, I feel like we have a lot of things going on from the Smart Money Happy Hour that launched yesterday, our new podcast. We also have some events that are in the making, which is so fun. We had a great time in Phoenix with two sold-out Building Wealth events. Yes, we did two nights in Phoenix. So thank you, Phoenix. That was a really fun two nights with about 3,000 people each night

and getting to talk about Building Wealth, which is always so exciting. But one of the other events that we have coming up is our Smart Conference in Dallas, Texas, Saturday, October 22nd. And we've just found that when you do anything big in life, whether it's building wealth, whether you're losing weight, whether you're looking for a total career shift and changing your job, whether you want to overcome stress and anxiety that you've been dealing with. I mean, all of these things can seem impossible, but when you have a plan and you know what you're doing, it helps in all areas of your life. So whether you've lost your job or the credit card bills are eating up your payments or you're feeling alone in this crazy world, whatever it may be,

I would encourage you to come to our Smart Conference, again, in Dallas, Texas, Saturday, October 22nd. It'll be- Full Saturday event. Yes. This is no joke. All day event with Dave Ramsey, Dr. John Zaloni, Ken Coleman, Christina Ellis, George Camel,

myself and Pastor Craig Groeschel and his wife, Amy. They're going to be talking about marriage. So we're talking about your money, your relationships, personal growth, career. So join us live before tickets sold out, before they sell out. This is an arena event, and it will sell out. Yeah, so go to ramsaysolutions.com slash events to reserve your seat today. I was joking with John yesterday on the show that he gets a long keynote.

Did you see his time? Oh, yeah, yeah. John's on stage for about 45 minutes. George and I don't get that amount of time, but we'll be there for a solid 30 minutes. I know, but it's going to be fun. It's a blast. Hope you can join us. ДИНАМИЧНАЯ МУЗЫКА Welcome back to The Ramsey Show.

I'm Rachel Cruz hosting this hour with Ramsey personality George Campbell. You want to tell them what just happened, Rachel? I just had a mouthful of chocolate chip cookies. That's right. Freshly baked from the Ramsey Cafe over here at Baker Street. So reminder to all of you who are coming through Nashville or want to make a trip, we have guests every single day right here in our lobby. We've created a fan experience.

You can buy books. Otherwise, everything's free. You get a free mug, free cookies, free coffee drinks. I didn't know they gave out mugs. Yeah. We signed one earlier. You saw it. Well, I did.

Yeah, I just didn't know they were free. Absolutely. One per family. I'm sipping on an Americano as we speak and a fresh baked chocolate chip cookie. And so frugal. It's all free for guests and for Rachel as well. When we host, we get to. They're our MCT members.

It did smell amazing out there. I know. Tantalizing. Pretty fun. But yeah, come visit us for sure. We're right outside of Nashville. A lot of people come to Nashville for just the tourism. Bachelorette parties. Church conferences. There's a spectrum. There's a lot.

I need to show you at the break, but there was a funny Twitter or a video on Twitter about, it was like this trailer, and it sounded like the guy from Discovery Channel. He's like a deep British accent. Oh, yeah. And he's like, and as the sun goes down,

they start to come out, and it's about the bachelorettes in Nashville. Oh, my goodness. We call them the Woo Girls, because they're always going, Woo! Everywhere they go. All right.

Oh, my gosh. But come to Nashville. It's pretty fun. Pretty fun. It's a wild time. It! Everywhere they go. All right. Oh, my gosh. But come to Nashville. It's pretty fun. Pretty fun. It's a wild time. It's a wild time. All right. Going to the phones this hour.

We have Alex in Minneapolis. Hey, Alex. Welcome to the show. Hey, Rachel and George. How are you guys doing? We're doing well. Thanks for calling. Yeah, thank you.

It's awesome to be here. Thanks so much. I got a question. Um, I am a 20 year old college student and I have no debt and I'm looking to make my first car purchase. I just want to make sure it's a financial responsible decision. Okay. Um, so the car I'm looking at is $20,000 and I have the cash to pay for it. I make about $32,000 a year, and I have about a $70,000 network, and I'm currently living at home.

What do you guys think? You want my honest answer, or do you want me to make you feel good? I can do either. Do both. I want to see both. Somewhere in between. Somewhere in between?

Okay, Alex, I answer these questions as if I was in your shoes, and at 20 years old as a college student, I would not buy a $20,000 car making $32,000 with a $70,000 net worth. You laid out all the numbers for me, and I don't know, looking on paper, when you go, should a guy with a $70,000 net worth have 20 of that tied up in a depreciating asset that goes down in value every single year. That's a lot of your world and a lot of your income. Think about how many paychecks that took

to get to $20,000 and now it's going into a car that's going to get bumped and dinged and scratched up, especially at 20 years old. That's when I got into the majority of my accidents was in that first five, seven years of driving. So I don't think you need a $20,000 car right now while you're in college. I would wait until, you know, maybe you're out of college. Now we're making $50,000. Now it makes more sense to purchase a $20,000 car. You can upgrade, sell the old one and get that newer one. Yeah. How are you finishing college, Alex? How are you cash flowing it? So the first couple of years are covered by financial one. Yeah. How are you finishing college, Alex? How are you cash flowing it? So the first couple of years are covered by financial aid. So that's really nice. And then

the last two years, my parents are paying for it. Very nice. How much more school do you have left? I'm currently entering my sophomore year. I'm in my sophomore year. You're in your sophomore year. Okay. So you have two more years of school left. Yeah, that's great. And you don't have a car right now? No. Do you need a car on campus? Yeah. Do you go to school in your... Well, I'm just wondering

how he's been getting around so far. Come on, George. How have you been getting around so far? I don't have a car. So I actually do online school. So I work it from home. Oh. Okay.

So you're borrowing, like like a family car right now? Yeah, I'm basically using dad's car right now. Okay. Yeah, you need your own car. What kind of car were you looking at that was $20,000? 2017 Audi A4. That's a nice car. It's a great car.

So here's what I would do. Could you split the difference? Split the difference. Could you get an older Audi? Yeah, I could. So originally my initial budget that I had set was anywhere from about $15,000 to $20,000. And $20,000 was my upper, upper limit. I don't know something special about this car is that i found that i did that looked on kelly blue book and it's actually several thousand dollars underneath the the uh fair market value or whatever yeah that's one thing that kind of tempted me into possibly buying it but i totally get what you're saying it's not an investment so i wouldn't look at it

as i'm getting a killer deal i'm going to resell it and make a profit. You want to drive this thing, and it's going to go down in value over time. So I would lean towards that $15,000 as my upper, upper limit, and that's after all taxes and fees. And also remember this, that Audi, the repair costs on those cars is astronomical. So you've got to be prepared with a big emergency fund to cover when that car is in the shop and alex here's the deal too uh and i don't want to like blame it on your age but it is like the season of life you're in if you were making a hundred thousand dollars or something you know then we'd be like yeah go get it that's great it's partly because of your income so we would say to to spend no more than half of your annual income on a car.

So that gets you at that like kind of 15, 16,000 range, which you have to cash for, which is great. So I would look more there. You're not gonna, you won't go into financial ruin if you spend 20,000 and get this car. But what's the wisest thing for Alex? And part of it too, Alex, I would really push into, which is not fun to talk

about, but it's true, is just this idea of like, of delayed gratification, a little bit of, hey, I have the ability to do this. It's probably not the smartest, wisest move. So what if I did back off and I did something different and you had a little bit of this kind of almost a self-control talk with yourself? Just to say, what if I did something a little different and then I look up in five years and go get an Audi that's three years newer than the one you're looking at now, right? When you're making better money.

But there's a character building process too. And when you can get that down at 20 years old and tell yourself, hey, what if I did kind of limit back? And what if I made a smarter decision and spent more like 15 on a car right now? And then fast forward again, three, four years, we could be talking something totally different because your numbers of your income are going up. But you've done a fantastic job, Alex. I mean, you're in a great position through scholarships and your parents' hard work of getting through school debt free. You have a net worth of $70,000, which is great. You have $20,000

saved. I would just keep doing what you've been doing because so far it's working, but I would ratchet down the car sale a little bit more. And partly for the math, but also it's kind of a great exercise as a 20-year-old guy to be like okay i'm gonna do something different i want to do this and again it's not gonna put you in financial ruin but i could do something a little bit wiser and go a little bit slower and that patience will get you far we were just talking at the break um about the fruits of the spirit man george about this new project that he's my he might be working on and patience is in in there. And there is something about patience that our culture doesn't have. We want it now. We want it now. And that's even the debt snowball

process. Like when people are getting themselves out of debt and some of you listening right now are in the middle of your debt-free journey and it doesn't happen overnight. It feels easier to be like, oh my gosh, I just want to go take a home equity line of credit and just get rid of my credit cards. But we say, don't move your debt around, pay it off. Like, be focused and look and pay it off. And it's a journey and it takes patience. But every time people come on this stage, George, to do their debt-free screams, like, you're a different person.

You're a different person. Something in your character happens when you take patience into the equation, whether it's getting out of debt, saving up and paying for something, waiting to purchase a really nice car that you could do, but it's probably not the wisest thing right now. There's something in your character that happens when you have patience. Yeah, and I practice what we preach around here. And up until seven months, eight months ago, I drove a 2009 Honda Civic, high mileage, body damage all over. And I didn't care because I had a priority, delayed gratification. I said, I'm going to pay off our house and then I'm going to upgrade in

car and I'm still going to do it with wise parameters. And it felt different when I bought that car because I know the sacrifice that it took to get to that point versus walking into the dealership, buying a car that I really was a little too much for my income and just going, it's fine. I want to drive this car now. And so I think that creates a different type of person. It changes your character when you can have that level of delayed gratification. That's right. That's right. Thanks, Alex. Thanks for the call. Thank you, America, for listening. And thanks to James, Ben, Zach, Andrew, and Jenna. Man, there aren't many girls back there anymore. Jenna, I respect you. Thanks for being here.

Thank you, America. We'll be back. 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. Go watch and subscribe to the Ramsey Show channel on YouTube.