The Ramsey Show - App - Please, Do Not Get The Extended Warranty! (Hour 3)

Episode Date: June 30, 2023

George Kamel & Ken Coleman answer your questions and discuss:  "Should I pay off my debt with variable interest before my other debts?" Why a new car with the extended warranty doesn't provide you more security than a used vehicle, from the blog: Are Extended Warranties Worth It? The potential collapse of Airbnb and how that effects those invested in short term rentals, from the blog: How to Invest in Real Estate What to do when taking care of your house is taking up too much of your time and money, from the blog: How to Budget for a House "What should I do when my husband and I don't agree on buying a car from a dealership or private party?", from the blog: 10 Car Buying Tips Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/george Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Ken Coleman this hour. This is your show, America. We are here to help you take the right next step in your work life and your money life. The number to call is 888-825-5225. And hey, if you're a listener of this show, whether long time or you're just checking it out, if you like this show, this is a free show. And I want to ask you to do one thing that's also free that won't take much of your time, and that is to consider hitting the subscribe button, the follow button, leaving us a review wherever you're listening, and sharing the show with a friend.

We like to joke that we have almost no marketing budget for the show because you guys are the marketing budget. You telling people to listen to the show, to check it out, that's what actually works instead of some ad scrolling in your Instagram. And so we so appreciate all of you who have encouraged your friends to listen to this, to give them some hope and motivation across their life, whether it's work, money, or relationships. Let's get to the phones. James is up first in Springfield. James, welcome to the show. Hey guys, how you doing? Great. How can we help? Hey, so I just had a quick question. I did feel super motivated, so I thought I'd call today. I'm super glad I got through to you guys. So my first big milestone on Baby Step 2 is complete.

My wife got her VA disability rating and the back pay from February. So as an early birthday present, my birthday is later in July, she helped me pay off the remaining balance on my motorcycle. So that was awesome. Um, so question, I have a mini HELOC for, I know HELOC, I hate it. Didn't want to do it, but I needed 16,000 to get a new heater for my house in Alaska when we were still up there. Um, and nobody else would give us that much money. So I have, that is about a $12,000 balance right now with a variable APY that caps out at around 10%,

and it's been capped out for a minute now. And then my truck has about $12,300 left on the loan. So they fluctuate. One goes lower, and then, like, two months later, the other one's higher just because they're so close. In that kind of situation, is it okay to go with the variable APY versus the fixed just to get rid of it quicker? So you have two loans total? There's a couple more, but one of them's a little bit less than that uh it's right around the 10th or 9 000 mark and that's our next one that we're focusing on okay what kind of debt is that estimating about four months it's an embarrassment um hey no traveler uh the traveler

um the dumb things where you go to the seminar and you sign up. I can't even remember what it's called. Uh, a timeshare. Yes. A traveler timeshare. Thank you. Okay. Um, it's one of those, I've tried to get out of it, but without getting deep into a hole and knowing somebody that I don't even know a bunch of money, I was like, you know what? I'd rather just keep the points cause I can at least use them for hotel stays when we go visit family. Cause we're both on the the West Coast active military station here in Missouri right now.

Okay, so we're knocking out the traveler timeshare, and then you're like, hey, I've got the HELOC and the truck. They're both about the same balance. One's variable, one's fixed. Should I just attack the fixed first? Yeah. At that point, since they're about the same balance, I would attack the one with the variable since that's the ankle biter stressing you out right now. But truthfully, it won't matter much financially because you're attacking this thing so aggressively. How quickly will you be completely debt free? When I left Alaska and came to Missouri, I made a good chunk of change in the tune of about $10,000 of,

hey, here's your money back for driving happier belongings across the country and through Canada. And so I'm expecting I'm going back to Alaska later this year. So I'm expecting around the same amount. And that should, in theory, knock out that traveler thing. And then my wife now with her VA rating, she's getting just over $1,000 a month starting this month or next month. So that's going to knock out that HELOC in about 10 or 11 months, plus probably sooner because we're going to throw more on top of it, of course. Okay. What's the truck worth?

It's worth about $25,000. Man. I mean, here's a scenario. Just throwing it out there. I've thought about it. I've thought about it. But I have a trailer that I have to get some of my belongings up to Alaska myself with. Is there any other way to get those belongings out there? No.

Could you rent a truck? Would that be cheaper? It isn't really a whole lot. Oh, no, no, no, no. I've looked into that as well. That's a pretty penny to get, like a U-Haul or something like that. I'm just saying, dude, I mean, if there's any way, if you could sell this truck and get rid of the truck loan, get rid of the HELOC in one fell swoop, dude, freedom is right there. Why wait a year or two? I'm figuring out the belonging situation at that point.

Get rid of this stuff. How much do you actually need? I don't know. I'm trying to be very polite over here. I'm sitting here, sitting here, sitting here, sitting here. I'm going, I've got to tell you something. You're burying the lead here that the truck is worth twice what you owe. You've got to sell the truck and get a cheaper truck. Then you can drive the stuff. If that's the only way to get your

stuff to Alaska, you can still do it with a cheaper truck. Good. As long as the truck can sustain an eight-year-old sitting in the back with the two to Alaska, could still do it with a cheaper truck. Good. I know. As long as the truck can sustain an eight-year-old sitting in the back with the two dogs. I've heard that trucks can hold eight-year-olds and dogs, and you can get a pre-purchase inspection. They can. They can.

You get a $10,000 truck. This truck's gone. You're trying to hold on to this truck. You got every excuse in the world as to why you need to hold on to this truck, and the truth is you could sell it, and you can find a way to get those belongings to Alaska. I don't think you've thought of everything. I'll leave it at that idea just because, like I said, I've thought about it and I've looked at the market around here, up in the St. Louis area, which is worse. I need to find something in the area that would be reasonable for me to do that.

So I'll look at it again, though. How much do you owe on the truck? When I have time. $12,000. Yeah, and you think you could get $25,000 for it? According to KBB, it's between $24,000 and $26,000, so I average it out at $25,000. Okay, then. The fact that you've looked that up tells me you've thought about it.

Yeah, and you need to look at what you can get for 15 to 17. What can you get for 15 to 17? That'll get you a whole lot of trucks. That'll get you to Alaska. I guarantee you an eight-year-old and a dog will be able to fit in those trucks. Dude, I look at used cars all the time, all the time. I'm just challenging you on this because All the time. I'm just challenging you on this, because George is right. I'm with George.

There's a lot of vehicles that can tow a trailer, and so really look at what you really need and what will get you from A to B, because it's really this one time scenario. We've got to get some belongings out from A to B. That's it. But I don't think that's worth being in debt for a year or two longer. So that's what I'm kind of weighing.

And so you could do what you want, but you asked for our advice and we gave it to you straight. But man, if freedom is right around the corner and I've got to figure out how to get some stuff from A to B, I'm willing to take that and sacrifice and do what it takes to get there. Isn't there some sort of train that must go up through Canada to Alaska? I don't know. I'm not well-versed in train routes. Neither am I. I'm just asking. I would at well-versed in train routes. Neither am I. I'm just asking.

I would at least look into it. There's got to be something where I could throw my stuff on there. I'd go, hey, who's heading that way? And you've got a trailer. I'll throw my stuff in there. I'll pay the guy a thousand bucks to haul it. That's what I'm saying.

I'm just saying. I get creative. I don't know. Put out a Facebook post. See what people say. There's got to be a train. We're out here just spouting some ideas. But we want to help you win with your work life, your money life.

So give us a call, 888-825-5225. Keep us company, won't you? We'll be right back. Welcome back to The Ramsey Show. Our team has been doing some research on mental health in the workplace, and it's not looking great, guys. Employees say in the last month they've felt stressed, burnt out, overwhelmed, and even angry at work. So if you're a business or HR leader, you may be seeing this firsthand. Your employees are distracted, they're exhausted, and maybe even ready to quit.

So here's the deal, guys. Good leaders take their employees' well-being seriously because it's good for both your employees and your business when they're well and they can bring their full selves to work. And you can help them do that. This month is Employee Well-Being Month, and there's no better time to make your employees' mental health a priority. So our team over at SmartDollar has put together a ton of free mental health resources for leaders like you who don't want to sit on the sidelines of their employees' well-being any longer. You can dig into the research, get information on how to deal with mental health in the workplace, and find tools to help your team get well so that they can focus on their work. You and your employees are worth being well, as our friend Dr. John Deloney

would say. So go to ramsaysolutions.com slash employee well-being to check out those free resources. Again, that's ramseysolutions.com slash employee well-being, all one word. Good stuff. All right. I'm George Campbell joined by Ken Coleman. We're getting to the phones now. The number to call is 888-825-5225. Dorothy is in DC. Hey, Dorothy. Hi, George and Ken. I'm calling in today because I'm working on Baby Steps 4 and 6 simultaneously, and I wanted to know whether or not I should buy a new car with the extended warranty for about $54,000. Whoa. Okay, this is a party.

What do you make, Dorothy? I currently make about $70,000 or $80,000 a year. Why did you laugh? Because I wrote that information down, but I don't have it in front of me right now. Oh, okay. Okay. So what's the deal with this new car? Why do we need to get a $54,000 car?

My car was totaled during a car accident back in April. I got a settlement for it for about $8,000. And then I plan to put $10,000 down on the new car, adding the tax refund that I'm expecting to get of about $2,000. So how much money do you have in the bank? I have about $77,000. $77,000? Yes, sir. Whoa. What is that from? That is from me saving for my emergency fund. So if I

take out the $36,000 from the emergency fund and leave $41,000, the rest of the money is for me, Airbnb, and my primary home while I'm away on military orders. Okay. So you've got an Airbnb, you've got your emergency fund in there, and that's money that's set aside for those things. But for the car, you don't have money to buy this car right now. I don't have the full amount of money to buy the car, but I also didn't want to empty my bank account completely when I'm trying to build more with the new LLC I just started for real estate investment. Here's what I'm saying, Dorothy. You are so smart. In fact, you are too smart to go into car loan debt for a car that you can't afford that's over half your income. So I'm confused where this is coming from. You have no debt right

now, right? No, I don't. But I didn't want to prevent myself from building additional wealth through the new business that I just started. But can I tell you that buying a car is the number one way to kill your wealth, to go into debt with interest on a depreciating asset? Okay. So the question is, how much money do we have? And then we go, all right, how much car can we get for that amount of money? That's how I would be looking at this thing.

So the problem is when I was comparing new cars to used cars, they were just about not that much cheaper for one. And for two, I need a reliable car in order to get back and forth to work. Okay. So let's look at the real numbers. So I thought I heard you say, tell me if I'm wrong, that you had $8,000 from the settlement and you had 10 that you were going to put toward, did I hear 18,000 is how I got there? Is that what I heard? No, you heard eight plus two from the tax refund. So that is how I get to the 10. Oh, you have 10 to put towards. Okay, good. That's why I asked. Okay. So,

you think that you can't have a reliable car that you would purchase for $10,000. Is that fair? Yes. All right. So what is the number that makes it reliable in your mind? How much more than two? I'm not sure. Well, because you're not looking. I'm not sure. When I was looking at other Honda Accords to replace the one that was totaled, it was about $30,000. For what year? For what year of a Honda Accord?

2019. Exactly. I'm sitting next to a Honda Accord specialist in George Campbell who drove... I drove a Civic for many years. I apologize. A Civic, but a Honda is a Honda. But one of my dream cars, Dorothy, was a Honda Accord. All right. But my point is, is that if she's looking at a 2010, 2011, 2012, all of a sudden, Dorothy, the price of those Hondas that will run forever if you take care of them and you have

enough money to be able to take care of basic repairs. That's why we have that emergency fund. You've got in your mind that the only thing that's reliable is $30,000 to $54,000, and that's just simply not the case. So imagine then if I'm right, and you may not think I am, but imagine if I am. Now you have $0 in car payment versus whatever your car payment's going to be with that $54,000 car. It would potentially be $660 a month. Okay. And $4.9 for 72 months.

That's crazy. That hurts my heart to see Dorothy's income get sent to Honda lender because she wanted a nice car. So here's the truth. It would be Volkswagen this time, but yes, I understand your point. But it's over $8,000 of a pay cut for you if you buy this car. Yes. Okay then. That's what we're trying to plead with you on. We're not anti-people buying cars just for the sake of buying a car. It's that it doesn't make financial sense for you.

And please do not get the extended warranty. Those are a giant ripoff and the mathematics behind it shows that they are almost never worth it. And so if you want peace of mind, you have an emergency fund for that. And so if there is a repair, you're going to be able to cover it. And if you get a reliable vehicle like the Honda Accord, for example, and you get a pre-purchase inspection on it, you can find a very reasonable used Honda. And while Honda and Toyota, they're going to hold their value pretty well because they're great cars. Everyone knows that. And so you may pay, you know, $10,000 for a, I don't know, a 2010 Accord.

And you might go, all right, that's reasonable. I had an 09 Civic. I paid $6,000 for it. That thing will probably outlast me, if I'm going to be honest. The problem for me with buying a 2010 Honda Accord is that that literally was the car that I had, and it only had 129,000 miles on it, and now it's gone. It's gone because it got totaled. Because of a car wreck.

So the $54,000 car has got the same chance of getting totaled as well. There's no difference. But I was the only owner of the car. So me doing the comparison of what the other people did or didn't do as far as maintenance keeps milling around in my head. Well, they have reports that show you exactly what maintenance was done. And if you get the right car from the right place, they're going to have all of that for you. And they'll show you exactly when the oil changes were done, when the brakes were replaced and all of that stuff. And I'm telling you, with a pre-purchase inspection, it takes all the worry out. They're going to go look at the thing and go, hey, here's the issues. Here's what it doesn't have. And here's what it would cost to fix up or it's in great condition. Go buy the car. And that'll cost you 100 to 150

bucks to get that done at your local mechanic. Dorothy, we get calls all the time on the show from people who bought a car, same price, same range, and then something goes wrong in their world, their business or whatever, and all of a sudden they realize they're upside down in this car because your car is going to depreciate. And a year from now, you could be upside down in this car.

And then you're really in trouble. Okay. You see the difference between paying cash for something versus you you finance it and then it is depreciating on you and then you then you're stuck you're not stuck right now i hate that your car got totaled but you got an eight thousand dollar check for it and you can put some cash on top of what you got and you can get a reliable car you're trying to make a business go you're trying to go all in last thing an entrepreneur needs is a car payment. You're trying to make a business go. You're trying to go all in. Last thing an entrepreneur needs is a car payment. It's just going to be weighing you down as you

get this LLC off the ground. And we want to see you win. That's it. I want Dorothy to be driving like no one else, but right now we got to drive like no one else. You know what I mean? Okay. So I guess my, my follow-up question and final idea is that I'm basically looking at the comparison of using other people's money or getting into debt for the business versus getting into debt for the car. And what I'm hearing you say is getting into the debt for the car isn't worth it because of the depreciation. Getting into debt for anything isn't worth it. And if you're going to use it for the business, for sure not. I want you to run your business debt-free, and we show you how to do that in the book Entree Leadership, and I'm going to send it to you to give you some hope on the business side, and on the car side, go to AutoTrader or TrueCars and start looking, and sort by your actual budget, which right now is $10,000, and get what you can afford right now,

and you can always upgrade down the line, down the line, until you're driving like no one else. So hang on the line, and we'll send you a Dave's bestselling book, Entree Leadership, to show you that it's possible to run a business completely debt free. Thanks for the call. I'm George Campbell joined by Ken Coleman this hour. This is The Ramsey Show. Now, Ken, there was some big news on Twitter, a viral thread, if you will. Big news. I saw this. And it was all about the crash of Airbnb. Right. Not the company itself. The company itself is actually doing well. It's for all of the people that own the Airbnbs. Right. And would this be, would it be safe to say this is also a VRBO or VRBO or whatever they call it? Yes. All of the short-term rental situations out there.

So this is from Nick Jurley, who's CEO of ReVenture Consulting. He's apparently got the number one real estate channel on YouTube. That's according to his Twitter bio. Okay. Has not been verified. Okay. But he said the Airbnb collapse is real. Revenues are down nearly 50% in cities like Phoenix and Austin. And he said, watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest in the revenue collapse. Wow. Yeah.

This is wild stuff. If you're watching, our viewing audience can see there on the screen, he gives the top 10 cities. And look at that. We've got two in the top 10 in Tennessee Sevierville which is just outside of Pigeon Forge or right around Pigeon Forge Smoky Mountains area number one on the list and then look at that number eight

Nashville Tennessee so this is this is very relevant across the country but certainly in our state and what has happened george is everybody started watching those tiktoks those instagrams all these real estate gurus get in there get the no money down start building wealth now baby look at me on my private jet look at me do what i did and now uh-oh we have more supply than demand. Yes. Basic economics that nobody ever talks about on TikTok and Instagram. Yeah, there are way more Airbnbs available. So as the supply goes up, but there is actually decreasing demand for those. Yeah.

And here's the other kicker. There's way more Airbnbs than there are actually homes for sale. So this could lead to a lot of for-selling. And for people that did the no-down plan or did almost nothing down for these rental properties, without the revenue coming in, they could be screwed where they have to be a for-sale, foreclosures, they're going to default on these loans. And that could be a real scary situation. Crazy, man.

Oh, my gosh. Yeah, yeah, yeah, yeah. It's a perfect storm. Now, does this mean that for those of us that want a vacation this year, we should be looking for some good rates? I would hope so. I would think that's the case. As Airbnb gets spooked, they may try to raise the rates

so that the people that still are participating pay more and therefore offset those that aren't doing it, which is always a risky move. That feels really risky. I agree. But their revenue per booking is up, which tells me they're raising their prices, and people that are still willing to pay, they're doing it. Okay, that was my question.

So we are seeing in the numbers that revenue is up. Yeah. Okay. Airbnb's revenue is up. So the company itself is doing great. But rates are up. The folks that are keeping their company alive, the mom and pops out there who went, hey, let's get an Airbnb. It'll be great. Little extra vacation revenue coming in would be awesome. This is going to be part of our retirement plan. And now they're going, we can't cover the mortgage. Because here's the kicker, Ken. Everyone goes, well, the Airbnb is going to cover the mortgage plus some. So this is a no brainer. Why wouldn't I do this move? Well, you forgot to include risk and things like this

happen and you go, oh, it wasn't just a money making scheme. Forgot about that. And so this could be a real dangerous situation. And they're saying that as the reality sets in, that gap could close in a way that decreases home prices. And Jirley believes that more seasoned Airbnb operators who got in before the pandemic might be able to hang on. But those newbie owners who paid more for their properties at higher interest rates, those folks could be in trouble because they've got thin margins that could lead to that wave of forced selling. Yikes. So one more reminder, and this is our stance on investment properties, which are toys, by the way, those are just luxury, is don't do it unless you can pay cash for it. And if you're going, oh my gosh, that's insane. You know what's insane? Putting nothing down and then putting

yourself in a financial situation where you have to force sell on the house because you can't afford the mortgage. And it's going to lead to a lot of people getting financially hurt that stepped into this thing the wrong way. The people with paid for Airbnbs, they're not that worried. It's an inconvenience instead of a crisis for those folks because they're in a much better financial position because they're not desperate to have that occupancy and revenue coming in. Yeah, this is, boy, you play with fire, you get burned. And this is an example of this. This is going to be very interesting to see what happens here because a lot of experts, I'm not trying to get off topic, it's actually not

off topic, but a lot of experts are predicting that we're going to see a surge in home foreclosures as well. Because we've seen a lot of things be installed and now we're back into it. Well, and with student loan news, people are going, oh, I guess I will have to factor in that student loan payment. And guess what? You can't bankrupt on your student loans. And so what's going to happen is people go, I bought too much house during the pandemic while student loan pause was happening. And all of a sudden we have to have this extra expense of four or five, 600, $700 in student loan payments. We can't afford it. Well, you can't get rid of the student loan payments. And so you may have to foresell your home or default on the mortgage and foreclosures could happen all across the nation.

This is a bad situation. So please budget for it. Make a plan. Look at the numbers and don't step into real estate because somebody on TikTok said, here's the plan. Buy my course. Do the nothing down. I can get you the right mortgage. The best plan is the 100 percent down plan where you pay cash for that toy and it becomes a blessing instead of a burden in your life.

You know, do your research on some of those folks, by the way. Just a little thing here. If they're making more money on their courses than they are on the actual strategies that they're selling you, you might want to walk away. Yep. Yep. And these people are also, I like to rag on them because they love to rag on us. They'll go, oh, that guy Dave Ramsey, he doesn't know what he's talking about, man. This is really the secret wealth hacks that you need to know about.

And I just block them. So there you go. Do you, George? That's one way to do it. I'm proud of you. Thank you. Yeah. I'm kind of done with the trolls.

I'm getting to that age again. I used to engage with the trolls and wallow in the comments. And I'm glad to see that you're... I still do it occasionally. I know. Just to feel something. Self-loathing? Yes.

I can't do it. I can't engage in it. It doesn't do anything good for me at all. That's fair. It's like a blood pressure. I need some mental health advice from Dr. John Deloney. Let's take a quick call here from Nick in Grand Rapids. Nick, welcome to the show. Hey, can you hear me? Yeah, how you hear me? Yeah. How are you doing? Doing good. How are you guys? Great. So I got a question here. I, uh, I bought my house,

uh, just over a year ago. Um, and I, before that I was renting with a group of friends and then, um, our lease was running out. So I didn't know where to go because rent was pretty expensive around here. So I ended up just looking for a house because of the low mortgage rates. And the house I currently live in is, I'd say it's pretty expensive to live in because it's an older house, and I have a lot of upkeep with getting a new furnace and water heater, and it has a pool as well that I have to upkeep. So I'm just curious to see if you think I should keep staying here and living here or just sell the house and try to either buy a new one next year

or even just rent somewhere. What is your take-home pay? About $3,200 a month. And what's the mortgage, including the taxes, insurance, all that? $1,600. Yeah, that's 50% of your take-home pay, and that's not even including all the maintenance and repairs. Yeah.

How big is the house? 1,600 square feet. Could you get some more roommates? Yes. I currently live with two other roommates. Okay. And so your mortgage is 1,600. What are they paying? 700. Okay. So you only have to put out 200200? That's correct. So what's killing you about this situation right now financially that you have to sell it? I think that it's just the toll it's taken on more of my personal life and more of doing kind of house chores and maintenance on the house that I have to keep repairing things or have to, like you said, the pool, ends up taking up a couple hours a day after work. And so I wasn't sure if I should just

keep doing this or if I should get out and kind of rebuild my personal life again. I mean, if it's for your personal life, I'll hire a pool guy and go, how do we factor that into the budget? But I don't think selling this thing is going to solve all your problems. If it's a nuisance long term, I would go ahead and sell it long term just because you're not ready to be a homeowner if you're not willing to take all that on. But the $200 you're paying is not what's killing you. It's the time that you're putting into it. And see if the roommates can chip in.

Maybe you reduce their rent if they help you around doing some of these repairs. That could be an option. Tough situation, man. This is The Ramsey Show. Welcome back to The Ramsey Show. Our scripture of the day comes from Proverbs 12, 22. The Lord detests lying lips, but he delights in people who are trustworthy. Thomas Jefferson said, honesty is the first chapter in the book of wisdom. Love a good TJ quote. Man, I love these quotes in light of the student loan news today, Ken, where we found out these politicians have been lying to us for a long time now. Well, but we tried. I know that every time I was on this show that I had the opportunity, I said, do not count on this. This is an empty political promise that is not legal.

And the Supreme Court upheld this decision today. Now, what stinks about that is a lot of people believe that. And for those of you that this is a real shot to the gut today, I'm sorry. Yeah, they got duped. We are not happy that you didn't get this relief. We told you you weren't going to, but here's the good news. You are your own student debt relief, and we can walk this journey with you. We've done it for a lot of people, so you can do it. I did it. I paid off my student loans. Well, a lot of people put their

lives on hold, and that upsets me because there's so much progress they could have been making, but instead they were waiting with bated breath with a carrot dangling in front of them from politicians, and we know that never ends well. So I want you guys to know that we're here for you. We want to help you make a plan to pay off these student loans. You can call the Ramsey Show, check out our resources. We want to help you in that way, taking that next step. Well, as you guys enjoy Independence Day and the holiday, you can also sign up for our free newsletter at ramsaysolutions.com slash newsletter. And this is a fun one. Are you going to have to start calling your baby steps teenage steps before you pay off debt? Speed up the journey with a side hustle. We've got 25 solid ways to make

extra cash so you can get on your way to knocking out your goals. Maybe one of those goals is paying off student loan debt. That's good. What are you doing for the 4th, buddy? We are headed to the beach. Ah, very nice. Down on the panhandle in Florida. The last trip to the beach before baby. That's true. I know. Yeah.

That makes me very excited. That kind of puts it into perspective. Are you going to grill out? I hope so. Do you eat hot dogs? You're a clean eater. Yeah, I mean. You'll have a Frank? Yeah.

I want a high quality Frank, if I'm going to be honest. Okay. If I'm going to be Frank with you. There it is, folks. There it is. I want a high quality Frank, if I'm going to be honest. If I'm going to be Frank with you. There it is, folks. There it is. I don't eat hot dogs. Is that a hard personal stance you take? No, just over the years I've faded away from them.

Not against them at all. Wouldn't guilt anybody at all. I'll be making some at my place. But I go with the smoked chicken wings. Oh. And a good burger, you know? All right. Maybe some homemade pizzas on the Kamado Joe.

I might skip the vacation and go to the Coleman's. There you go. You guys are living the dream. It's going to be fun. I love it. Well, have a safe and happy Fourth to everyone. Happy Fourth to everybody. And make sure to check out that newsletter, ramsaysolutions.com slash newsletter.

Let's go to Leslie in San Antonio. Leslie, welcome to the show. Hi, George. Hi, Ken. I just had a quick question. My vehicle was totaled last month, and I got a payout settlement for it. And I don't want to spend the full amount, and my husband would feel more comfortable going to a dealership situation, which is how we bought our previous vehicle. And I'm potentially like open to finding something on Facebook Marketplace or private party sale, but we don't have a lot of experience in that and feel a little hesitant. And I know, Ken, you've mentioned that you've done a lot of research with that.

I'm your resident Facebook Marketplace vehicle purchasing expert. That's who, yeah, I'm here for you. So how much money did you get for the settlement? We got $12,000, which is what we paid for the vehicle five years ago. Oh, well, that's great news. So you said you didn't want to use all of that. What are you thinking? What's the amount you want to spend?

I would feel nine or 10 would be great. Great. Okay. So Facebook Marketplace. All right. So couple of quick tips and George, I'm sure you've got some as well. Sure. But from my experience, you need to check out the rating or the quality of the seller. If they've sold multiple things that have a good rating, that's a good sign, but that's not enough. And then you check out the car, you communicate with them ahead of time. The more they communicate, the more open they are. That's a good sign. Let's go look at the car. And then after we've looked at it, I would ask them if they'd be willing to let you take it to your mechanic. And that's my checklist. If any of those don't check out, I check out.

There it is. It's that simple. Because look, you've got to protect yourself. But if you get your mechanic to check it out and they're willing to do that, that means they're not trying to take you for a ride. And then you get your mechanic to tell you everything that's wrong with it, tear it apart, and now you're dealing with reality and facts and nothing to be scared of at that point.

Yeah, that's a good call. What would you recommend? Oh, sorry. No, continue. No, go ahead. Well, I'm like, there's the sticker price. That's how much you're asking me to pay. I'm going to pay that.

But how do I go about negotiating that when I'm very much like, you said it cost $10,000. Okay, I guess that's what I'm paying. Oh, yeah. Oh, I should have given you this tip. This is so fun. So do your research on the Kelly Blue Book. So match it up and see if they're in the high range, medium range, or low range. And then walk in there and just say, I'm a cash buyer. And so if they're asking $10,000, and let's say that it's on the high end, I absolutely am going to offer,

and let's say that the medium range for that vehicle is $8,500. I'm offering $8,000. That's just where I'm going. I'm going to go below the mid-range on that and see if I can get them to come down. We meet in the middle. But I've never bought a car cash, George, where I couldn't get the person down you know i don't make a ridiculous he drives a hard bargain no i just make a fair offer based on the range but i say that i go look the range is this you're on the high side i feel good offering you eight and they go would you do 9100 and you go ah i think the most i'd feel good about here is 8400 you know and then it's just this little back and forth.

And if the price is fair, you can just pay the price. Or you can do that too. If the price is fair, give them what they ask for. So it depends on your comfortability with confrontation, to be honest with you. Because you don't have to be ugly about it, but most people feel like negotiation is confrontation, and it's not. My wife will just be like, I'm going to go in the car while you do this. It's very uncomfortable for me. So she does that.

I'm the negotiator guy. I'm playing hardball. I smile the whole time. I look them right in the eye. Never lose eye contact. And if you get the feel like they're kind of scummy, just leave and go somewhere else. Don't play that game. There's a lot of reputable, independent used car dealerships out there if you want to go that route.

It sounds like your husband is wanting to go to the new dealership, which they do sell used cars there, and you can find a deal. We bought my wife's car from a Mazda dealership, and they had a great used car that was like seven or eight grand. And so we went, great, we'll just do it. And it was a very quick, easy transaction. The other option is, of course, private sellers like Ken mentioned, and the other one is these online car retailers. Now, you're going to have a tough time finding something in that price range because the deal with those is, hey, no haggle. It's easy. We've already inspected it. We've got all the reports, but you kind of pay what you see on the website. That's correct. There is no negotiation. So it just depends on your comfortability, your budget, and start looking. Go to True Cars and

Auto Trader and Facebook Marketplace and get a feel for what kind of car you're able to afford. Always get that pre-purchase inspection. It'll be about 150 bucks. And then lastly, on negotiating, agree on an out-the-door price. That means, hey, after all the fees and taxes, which by the way, I'm not paying any fees beyond a real tiny dock fee. It's going to be the price of the car, the sales tax, and a small dock fee. Anything other than that, I'm going, I'm not paying it. If they want to throw on these warranties and that we did the rec, the sales tax, and a small dock fee. Anything other than that, I'm going, I'm not paying it. If they want to throw on these warranties and we did the reconditioning fee, don't let them do that to you, Leslie. No need to shout, George. All right.

I'm just getting upset on Leslie's behalf. Stay calm here. We have a great car buying guide as well, Leslie. I'll make sure the team sends it to you. That's good. And we will link it in the show notes. And it's a fantastic guide that goes through all of these steps because I know we're throwing a lot at you.

By the way, if you're in Tennessee and you're listening to the show right now, my wife, Stacey Coleman, we just listed a car. We're selling one of our cars. Just going to put that out there. Hey, you can say, can Coleman drive this car? A little Lexus RX 330. That's a great car. Run forever.

I think we're looking more towards the minivan side. I know. I actually wasn't trying to sell you that car. I was just saying in Tennessee. You're too far away. It would be some legendary radio if we were able to sell Ken's car over the air. My wife would be so thrilled. I come home, honey.

She goes, how was your day? I sold the car on the air. Well, I love that Leslie's going, here's our budget. Here's what we can afford. We're going to find something for nine or 10 grand. And if afford. I like her mindset. And we're going to find something for $9,000 or $10,000. And if we need to negotiate to do that, we're willing to do it. Now, I'm not going to say don't buy from a dealer, okay, or an independent dealer. But I will tell you, my experience, I'd much rather buy from a real person.

They're not marking it up. Hey, that's fair. And I usually trust them a little bit more. I'm just going to throw that out there. That's fair. Well, hey, thank you to everyone that listens to the show, that subscribed, reviewed, shared with a friend. We were rated best podcast of the year, and we were the most requested on Alexa. That's pretty cool.

My mom is going to be so proud. So thank you to Amazon Music and Podcast. We got that data in. Thank you so much for listening to the show. Until next time, America, spend wisely, save intentionally, and give generously. Hey, it's George Camel. If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation.

That's ramseysolutions.com and click Get Started.