Nick from California has done everything “right.” Seventeen years ago, right after getting married, he and his wife went through Dave Ramsey‘s Financial Peace University. They’ve followed the plan religiously since then.
“We've been very disciplined,” Nick said. “We've done this for so long, it’s kind of become who we are.”
A Life Built Around Saving
Nick and his wife now earn a combined $350,000 a year. They have over $400,000 saved in Roth accounts and funds for their kids. They're nearly millionaires and have no consumer debt beyond real estate and a $25,000 loan on a tractor.
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Still, Nick called into “The Ramsey Show” with a confession. “I don't want to miss out on memories," he said. "I want to go buy jet skis and quads and I want to go do fun things that I did as a kid and make those memories with [my children] now, while they still like me.”
But their ultra-frugal mindset has made that difficult.
The Tractor Controversy
Ramsey quickly focused on the tractor debt.
“You flunked FPU,” Ramsey said. “I thought you were a star pupil and became a millionaire, and then you went and financed a tractor.”
Nick explained that he bought the $25,000 tractor at 0% interest. Thanks to a government grant and a tax credit, he believed it essentially paid for itself. He admitted to putting it on a line of credit, though.
Ramsey wasn't having it: “There's nothing interesting about it. It's pitiful.”
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Rachel Cruze, who co-hosted the show, reminded listeners that the $400,000 Nick has saved is largely in retirement accounts, not liquid savings. When asked directly, Nick confirmed he has a $31,000 emergency fund.
“Pay the tractor off today, honey,” Ramsey said. “Okay? Today. Remember, we’re going back to FPU. I’m taking you back to class.”
“What happened is, you got financial advice from the tractor salesman,” he said, half-jokingly.
And while Nick's plan was technically clever, Ramsey reminded him that cash buyers still qualify for tax credits. Debt was never necessary.
“You fell off the wagon and fell off the tractor,” he joked.
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The Surprising Advice
Ramsey took Nick back to basics: get out of all non-mortgage debt and restore the emergency fund. Only then should Nick resume Baby Steps four through six: retirement investing, saving for college, and paying down mortgage debt.
Once Nick cleans up the short-term mess, Ramsey said it’s time to shift from being intense to being intentional.
“You make enough money to do some of the enjoyment things you’re talking about in cash only,” Ramsey said. “No rationalization, no government kickbacks, no 0%. We’re just going to pay for it like your grandmother did.”
Ramsey also gave a personal example to illustrate his point. When Nick mentioned wanting to buy quads and jet skis for his kids, Ramsey said, “I just bought several of those for the farm for the grandkids. That was fun ’cause I wanted to, but I didn’t finance it at zero. I mean, I just bought it.”
“But it was a small percentage of our world. And you can do that, too,” Ramsey added.
Many Ramsey listeners feel stuck between building wealth and enjoying life. Ramsey said even high earners like Nick can fall into the trap of over-rationalizing debt.
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