Don’t Listen to Dave Ramsey: A Memoir

I’ve been thinking a lot about a specific piece of Dave Ramsey’s advice, and how utterly impractical it is for early career folks. There’s enough hate of the man to go around, so I tend to avoid writing about his hot takes since that’s a bit overdone in my personal finance circles. 

However, I’m in the middle of a car buying process and wow, his advice is bad.

Dave Ramsey’s Advice Doesn’t Work for Low Income Households

“If you can afford the car payment now, save that amount of money each month and you’ll soon be able to buy the used car in cash.” 

On the surface, it doesn’t seem that difficult. I know I can afford my $300 car payment for the next three years. What I cannot afford though, is to not have a car for the next three years. In the three weeks that I’ve borrowed my grandmother’s car (a huge blessing and a privilege), I’ve put over 1,000 miles on it. Meaning I drive a lot. (ironic because I work from my living room). 

Between social engagements, Sylvia’s training, grocery shopping, and helping transport my family members places on the rare occasion I need to, the majority of this travel is mandatory.  And I can cut out maybe two of those driving options. Taking my siblings places (which helps my mom out) and social engagements (which currently is once every other week swing dancing, so it wouldn’t change my mileage much. Grocery shopping is mandatory to live and Sylvia’s training is mandatory to thrive, instead of surviving. 

And this advice is the same advice he gives to potential homeowners, which is even more ludicrous in that situation, but I’m saving that for a whole next post.

Why Not Borrow or Buy in Cash?

In short, I need a car. And while I’m borrowing my grandma’s aging truck for the short time I’m in between cars, borrowing her car for three years while I save up for a car, not an option. And buying a car in cash, also not an option. 

I sold my beloved Berdie for almost the same amount of money that I paid for her. (Junker cars are great at retaining their value if you want for the right buyer to come along). So I had $800 in my pocket for a car. 

Since I wasn’t planning on selling her for another two years, I didn’t really have any other money budgeted for a car. And unfortunately with the used car market such that it is, finding a decent car for less than $1000 is not an option. And in my area, unless I wanted to go with a shady dealer, buying a used car with credit for less than $5,000 – not going to happen. 

My Decision to Choose Debt

I looked at several different options, and while they might not be the cheapest car dealership, their reputation preceded them and I opted to buy a car from CarMax. (she’s being shipped from Colorado to Texas right now, and I’m signing papers next Monday) She’s a 2013 Honda Fit with 26k miles on her in my budget. I found a loan with decent terms, and I’m excited to have safe transportation again. 

That’s the thing that Ramsey doesn’t account for in his brilliant strategy to save a car. He assumes that you can pay that much on top of what you’re already paying. Or that you have the luxury of time to wait to save up massive amounts of cash. 

Some people do. I don’t. 

A Step Up from Junker Cars

The idea behind Dave’s strategy is that by the time you’re ready to sell your car, you’ll have enough saved for a new car. And this works in theory until your car breaks down or you drive a trashcan on wheels. 

I could attempt to find a $2000 car. But I’d rather not keep cycling through junker cars trying to get ahead and always having my car break down. So for me, debt was the safest and most practical option. I have a plan to pay my car off, and I’m not worried about finances (another privilege since I live with my mom and pay below-market-rate rent). 

Young Professionals Can’t Always Avoid Debt

For many people, especially young professionals who don’t have money to fall back on yet because we haven’t been in the workplace long – or because our 4-year degrees landed us a job at Starbucks during a global pandemic – it’s impractical to expect us to put off something as necessary as car ownership for years simply to avoid debt. 

And those who can, that’s a luxury. 

I’m tired of hearing the same standard advice packaged at 20 something-year-olds telling us to avoid debt at all costs – especially if that means driving an unsafe vehicle for extended periods of time in the name of saving money. 

Personal finance is personal and not every piece of advice works for every individual. Avoiding debt to buy a car is something I could not afford to do. 

It’s not shameful to take on debt if you need to take on debt. Especially for multi-thousand-dollar purchases when you’re still getting your feet underneath you. 

Anyway, in case you’re wondering, my net worth is negative now. But my sanity is coming back together with this purchase.