Financial advice is a fraught topic. It’s important to everyone — we all have to participate in the market economy on which our society is built — but the methods that work for one person often don’t work for another. So, when Dave Ramsey comes calling, it’s often best to just not pick up.
Sometimes, though, it can be worth answering that call for humor value alone. Take Ramsey’s latest big idea, where paying interest is worse than not doing that. In Ramsey’s mind, rather than ever having a car payment, you should just save up and pay cash — simply have more money. Panthercougar and Weirdisgood detailed how that’s not exactly helpful:
The core of Ramsey’s thesis — that paying interest costs more than not paying interest — is sound, but the problem comes from the idea of saving up for such a massive purchase in cash. Do you know how long it takes a working man to save $5,000?
The counterpoint is, of course, to buy a cheaper car — if the average new car transaction price is $50,000, buy used. Again, reasonable, but the average person under 35 has $7,400 in their bank account. Go on your local Facebook Marketplace and see what you can get for $7,400. Then knock off your local taxes, registration fees, any repairs needed to get those cars daily drivable, and the maintenance they’ll need as time wears on. The pickings get very slim very quickly.
It’s never good to buy something you can’t afford, that’s a given, but cars are a necessity. In much of the United States, there’s no other way to get to work — which is, of course, your only means of saving up towards a car anyway. What I’m saying, Dave, is that people don’t get a car payment because they feel like paying an extra percentage over the purchase price. Often, they do it because they have to.
Congratulations, Panthercougar and Weirdisgood, on your joint Comment Of The Day win. Here’s a track about that thing you should try just having more of. Hope it helps!