Do This If You Want To Stay Middle Class Forever

Brought to you by the EveryDollar app. Start budgeting for free today. I'm 29. I live in New York City. I'm just fine today making double what I was making at my previous job. Congratulations. What are you making? Thank you. Starting off at 85 salary and hopefully 95 after six months. Good. Good for you. Appreciate that. Yeah. So the car question, it's kind of a, it's a car question. I've had a bit of car trouble and I've been driving a car solely to get through the winter over here. Um, doesn't have AC, uh, all these different things, uh, needs, uh, needs a whole bunch of changes, needs over to fix it, but it's not worth it. Cause the car is about 220,000 miles, um, on it and I'm running into the ground. Basically it was a pretty handed down. Uh, now, uh, being that I have a father as well, I wanted to know, um, best fixes. Now you're going into looking for a car and look for the past six months. And in short, I, I'm forgetting one thing. Sorry about that y'all. Um, my father gave me about, um, $10,000 to go to reward this car, um, as of the beginning of this month. And so while originally I was just looking for something, uh, that I keep on the road, that's reliable, et cetera. The added cash was, um, added to one. Yeah. What's an attitude. You already got money saved for a car. Yeah. I was saving for a car. How much do you have in savings? I've got now, I've got about 8,000, eight to 10. Okay. So with your dad's gift, you have $20,000 to buy a car. Correct. What's your question? Um, well, the car that I suppose that answers all the questions is about, cause I'm looking at what are you trying to spend on this car? I have a feeling about 25,000. Okay. Don't you can't buy that car. You don't have 25,000 by $20,000 car. You have 20,000. Yeah. Or can you wait until you save up the 5,000 more? Cause when I, when you tell me that the other car was a free, it was a free hand-me-down. You have no money in it. So if you want it to continue to repair it for a while, you could, cause you didn't buy the car. So the old junker probably bring a couple of grand, won't it? Uh, I'm not sure. It's, it's 07 Honda Fit. Yeah, I don't either, but go find out. I mean, whatever you can sell it for plus 20 grand is your budget. Carl, do you have any other debt? Do you have any debt? Um, just a balance transfer in June. That's about 2000, which yeah, that's, that's the rest. Otherwise, again, I'm looking at, well, new job, new position. Um, how do I, Hey, listen, don't celebrate your new job with a car payment. Hey, what's up guys. It's Jade. Listen, my husband and I drive used vehicles and we really do plan on keeping those running for a long time. So we trust Christian brothers automotive to take care of them. Their team is honest. Their shops are super clean. And what I love is they don't try to upsell us on things that we don't need. I personally feel really confident walking into Christian brothers because I know that no one's going to try to take advantage of me or scare me into unneeded repairs. Christian brothers gets it. So schedule a service today at cbac.com slash Ramsey and get 10% off your visit. That's up to a $250 value. See stores for details. Hey, listen, don't celebrate your new job with a car payment. That's kind of dumb. No, and that's not the intent. Well, it's what you're doing. You thought you thought, Oh, I hit the lottery. I doubled my income. I signed up for 85 grand. So I'm going to run down the car dealer and give them my freaking money. No, thank you. No, no, no, no, no, no, no, no time to be a grownup. You did not hit the lottery. You have 20 grand and an $85,000 job. And you live in New York city. You did not hit the lottery. Okay. You can go buy a $20,000 car, not a dime freaking more because you don't have a dime more. You do what you want to do, dude. But you called here. I got to tell you, there's zero chance. You should have a car payment. You have plenty of money. You are upgrading so far from the hoopty you've been driving. You ought to be dancing in the streets of that 20 grand, acting like you got a dadgum new Porsche. Or save up the 5,000 and pay 25,000. Just do it in cash. Absolutely, dude. Please don't do that. Please don't do it. So Dave, let's talk about this because I know people, people are like, what are you saying? This man is buying a $25,000 car in cash. That's so counter-cultural. It's so abnormal. The majority of Americans have car payments and they will have car payments their entire working career, right? Majority of Americans are broke. Exactly. So the correlation there is very, very clear. You look at the percentage of Americans that have car payments, and then you look at the percentage of Americans who are living paycheck to paycheck. And suddenly the whole equation makes sense. We interviewed 10,167 millionaires when we did the Mitt Ramsey research piece on millionaires. You know what the data tells us? Tell us. The actual science, right? What's it tell you? Well, the science, the data says that when we interviewed millionaires, they said, what's the dumbest thing you ever did with money? I bought a car with payments. What's the dumbest thing you ever did? I bought a new car with payments. And when did you stop doing that? About the time I got on track to be a millionaire, which was 16 years ago, was the last time I did that stupid butt idea. And then I became a millionaire. And they look back on their lives and say, the turning point of me becoming wealthy, the vast majority of it, it's like 84% of them answer the question this way, it's crazy. They look back and they say, the dumbest thing I ever did and the turning point that when I changed my life and started habit patterns that caused me to become wealthy was getting away from car payments. If you want to be middle class, stay in car debt. You will stay in the middle class. You will never build wealth because it will suck the bone marrow out of your money. Well, when you're paying $800, $900, $1,000 a month for cars, and for some people that's just for one car, many households have two car payments. Yeah. How the heck are you supposed to have money to invest for the future? How can you pay for your kid's college? And there's an affordability crisis. I can't buy a house. It's because you have $1,400 in car payments because Ford motor company screwed you. Lexus motor company, Toyota motor company screwed you. And they got you so far in debt because you had to have something shiny with toxic plastic smell. So then the big question then comes is, okay, how do we do it? And that's the number one question that I get when I start talking like this. You quit caring what other people think. That is the first thing. Mindset has to change. Status symbol is a car. And then let's talk about it practically because most people, you can go about this in two ways. For most people, what this looks like, getting away from car payments looks like whatever your current vehicle is, you're either going to pay it off. And from that point off, say- Never again. Never again. And now that I've paid my car off, I'm putting a portion of money aside all the time so that when the time comes, I can trade this one in, add a little money to it and upgrade little by little. It's a stair-step motion that we're doing. So that's one way it can look. The other way it can look is you're looking at, you're facing down a $950 car payment right now. You still owe 40,000 and you go, this is for the birds. I'm just going to sell the car. And from the beginning, you're making a giant step downward because you're going from driving a $40,000 car down to maybe an eight or $9,000 beater, Dave. Yeah. Decide who you want to impress. People at a stoplight you're never going to meet or your grandchildren, because you could change your family tree if you don't impress the people at the stoplight. Absolutely. And let me take it back even further, the people at the stoplight, but a lot of you are worried about the people in your life, how it's going to feel when you pull up to the cookout and you were driving a Suburban brand new, and now you're driving a Honda Fit, right? And it's like, what happened to him, right? And you're thinking about that. Yeah, things aren't going well for old Dave. He's driving a car he can afford. Oh, poor Dave bless Dave's heart. Yeah, you're right. And you know what? It's worse. I think men are the worst guys are the worst on cars because we, we get too much self-esteem out of what we drive. Now, ladies, some of them are that way, but most ladies just think a car is a really large purse and guys, but we're real concerned about the motor and the zero to 60. And you know, how fast is my little battery, George camel and the size of the rim. I don't know. Yeah. There you go. Whatever that was. No, I'm telling you guys and pickups are the worst on car payments. They're the worst. So sorry, sorry, Carl, but you just set us off on a tangent. All of that wasn't aimed at you personally, but if we could please talk you into loving yourself enough to not going into car debt, love yourself that much Carl in New York city, don't go into car debt, create your free every dollar budget today. The simplest way to budget for your life.