Financial guru Dave Ramsey helps people stay out of debt for good and master their finances, and one of his insights made the rounds on Reddit (NYSE:RDDT). A Ramsey fan was listening to "The Ramsey Show" and said that a doctor called in.
The Redditor recalls how Ramsey brought up the importance of "being the adult" when speaking with the doctor who called in. Being the adult refers to grinding and saving money while others are out having fun. The caller has made it, from a financial perspective, with a $700,000 annual salary and a $100,000 signing bonus.
Ramsey dissuaded the doctor from buying a Bentley in that scenario since there's still a $150,000 student loan left to be paid. He then said that you don’t want to let the child in you take over too soon, saying that you have to maintain "adult mode" for a little longer.
This advice resonated with the fan and others on Reddit.
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Don't Rush To Spend Money
One Redditor said that they have had conversations with plenty of doctors who think they made it upon receiving a high salary. While the high salary gives them a better chance of being financially free, the way they use that money matters.
"You can wait 1-2 more [years] to pay off your loans and have an actual down payment for the house. And you will be so much happier for [having done] it," the commenter said. "But so few actually take that approach. Doctors have done so much right for so long, and then they choose to mess it up right at the end."
Living below your means is a popular way to build wealth, especially if you don't change your expenses as your income goes up. However, some people have the itch to spend a little more money as they earn more money. Instead of rushing to make bigger purchases, it may be better to save extra money for one to two years, just as the commenter suggested.
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Enjoying Youth Vs. Sacrificing The Future
Some Redditors argued that it was OK for the doctor to buy the Bentley, saying that the doctor can easily afford it and pay off the student loans over time.
"Bentley and student loans will be paid off in just a few months," one commenter said to justify the purchase.
"No question, this guy needs to buy the Bentley now," another Redditor said.
However, there were some comments that distinguished the difference between enjoying youth and sacrificing the future. These comments demonstrate the value of staying in "adult mode" even when you land your first big salary.
"I would also say when people do things like this, it doesn't typically start and stop with one thing," one commenter said. He gets a Bentley, then what? Well, you [have tp] park that Bentley in front of a nice house, and you don't want to drive a Bentley all the time, so you might get another car too, then you need clothes and a nice watch to fit this lifestyle too; [you] also may reward yourself with a few vacations. [The] fact is that Bentley won't make him happy and will most likely just add stress."
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Another Redditor shared how many of their college friends upgraded their lifestyles, bought new cars, and partied every weekend. While they were enjoying their youth in their 20s, it came to bite them later on.
"Most quickly found themselves digging out of their debt when the planners in the group were putting down payments on their first homes," the commenter said. "Smaller numbers, similar behavior. After years of being broke college students, it is easy to start spending when you are not quite in the position to do so."
Embrace Your Passions But Let Your Adult Mode Win
You don't have to buy a Bentley to let your "child side" win. One commenter said spending $5,000 to $10,000 per year on boating and wakeboarding was all it took to embrace their "child side."
"My child will always win when it comes to passion, but my adult will always reel me in to be responsible," the commenter said. "I add to retirement. I’m frugal. I invest. But I’m spending that 10k no matter what anyone tells me."
It's similar to the idea that you can do anything, but not everything. Knowing what matters to you and cutting out other expenses that don't increase your happiness gives you more money to do what you enjoy.
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