A recent episode of “The Ramsey Show” featured back-to-back discussions about car debt, prompting personal finance expert Dave Ramsey and co-host Jade Warshaw to double down on their anti-loan message. One caller, Jay from Portland, Oregon, set the tone with a dilemma involving a dream job, a 70-mile commute, and no current vehicle.
Buy A Beater, Not Go Backwards
Jay, a staff sergeant exiting the Army, explained that his job was far from where he'd live for the first year because of a child custody agreement. He had $7,000 in savings, $3,000 left in divorce debt, and wanted to finance a $23,000 Toyota Corolla.
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“You can't solve a problem while simultaneously creating it,” Warshaw said. “Buy a $4,000 car,” Ramsey told him frankly.
Jay insisted he wouldn’t go back into debt, but Ramsey pushed harder: “You’re going to go buy it, though. I kind of think we can’t talk you out of it in 30 seconds. But no, there’s no chance. I’ll ride a bicycle before I get a freaking car payment again.” Warshaw finished the call by advising him to take the bus instead.
Fear And Finances
Minutes later, Warshaw read a letter from Jesse in Texas, who makes $100,000 a year, has $18,000 in student loans, and $25,000 in savings. Jesse was afraid of draining his savings to buy a car in cash, citing his parents’ financial struggles.
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Ramsey and Warshaw broke it down: the fear was emotional, not mathematical. “If you paid cash for a car, it did not cause them to struggle for decades,” Ramsey said. “Going into the car payment… that caused them to struggle.”
Warshaw added, “This is just fear operating unchecked in the background. And you don’t even know what it’s based off of.”
They encouraged Jesse to buy a reliable $6,000 car and get rid of his student loans. Ramsey offered a blunt pep talk: “Dude, you’re 27. You make $100,000 a year. Here’s an idea. Stop being broke. Get off your butt and fix this.”
The pair emphasized that financial transformation takes more than just math. “There’s an emotional side to personal finance,” Ramsey said. “You want to change your money, you have to consider three parts: the numbers, your behavior, and your emotions,” Warshaw said.
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