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Chapter 1: Should I sell my car or keep it?
Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work. that they actually love and create real amazing relationships. Dr. John Deloney, host of the Dr. John Deloney Show, podcast and YouTube on the Ramsey Network, is my co-host today.
He's also the author of the number one best-selling book, Own Your Past, Change Your Future, and the brand new book we just launched pre-sale on, and you can get a deal on it right now at RamseySolutions.com. That's called Building a Non-Anxious Life. Jeannie is in New Jersey. Hi, Jeannie. How are you?
Hi, Dave and John. How are you?
Better than we deserve. What's up?
Okay, so I always get so nervous when I call. Okay, I have an Audi Q5 2018. I just paid it off in my debt squall in February.
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Chapter 2: How should I handle my spouse's debt after marriage?
Something happened in April, and I found out that I had a $3,000 problem, and I was out of warranty. Okay. Um, that was fixed fast forward to today. And like every time I go to my side hustle, I have to drive up a mountain. And lately I've been smelling, um, this burning smell and it kind of scares me.
And someone told me it could be like, um, oil burning in the transmission or something like that. And so, um, so then I started thinking like, you know, do I really need this car? I did pay it off, but, um,
Um, I just thought maybe I should be a little bit more proactive for once in my life because, um, it would crush me if I had to use like, you know, um, my emergency fund again when I'm trying to build it up. So I was thinking, should I look into extended warranties that would protect some of those big items? Should I sell it?
Um, you know, I did attempt to do that and they offered me something really low. Um, and yeah, I went to a place called We Buy Any Car.
Yeah.
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Chapter 3: Is it wise to use my 401(k) to pay off my home?
You know why they buy them is because they buy them cheap. So, no, that's probably not the plan.
But I also tried to sell it privately. And, you know, people are just offering me saying it's not worth what you're asking. All I really wanted was about $21 for it.
What's the car worth, actually?
I think it's worth $19.
Why? Why do you think that?
I think it's because somebody told me that, I think.
This is incredible, Jeannie. Your sources of information on all this whole story suck. What I want you to do is I want you to go to the website, kbb.com, for kellybluebook.com, and click on private sale and enter the statistics accurately on your car, the mileage and so on. And that will tell you about what the car is worth.
And if that says 19, then you would sell it, try to sell it for around 19.
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Chapter 4: What steps should I take to recover from a gambling addiction?
It is paid off, and you make what kind of money?
Well, with the side hustle, I make about, I'd say I just started it three months ago. I would say about $150 or $160.
$1,000 a year?
Yes.
Okay, good. Very good. What do you do for a living?
Well, I'm a school psychologist in my day job, which is, you know, the bulk of the money. And in my side hustle, I work at a psychiatric hospital.
Very good. Good. Very good. Good use of your knowledge base, your calling, and so on. Very good.
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Chapter 5: How can I effectively manage an inheritance?
So, well, here's what I'm going to do if I'm in your shoes, right? I'm going to fix the car, take it to a reputable mechanic, and tell him it smells when you go up a hill and get it fixed. Because you don't dislike the car. You're just afraid something's going to happen to it.
Oh, see, I heard, Jeannie, tell me if I'm wrong, because I heard that you are just looking for ways to get out of this car because you don't like it.
No, I do like the car, but I just... But you don't even know if there's a problem yet.
I mean, there could be a dead rat under the hood. It could be the smell. Yeah, it could be something you stepped in.
But I would smell it all the time. I wouldn't smell it just going up the hill. Well, that depends on the size of the rat. It still works.
yeah i i would or it could be somebody is like cooking oil into their house on that hill like you know like you're making a lot you're doing a lot of work yeah we need we need to find out what's really going on with the car okay yeah and by the way if it has a five thousand dollar problem it's not worth twenty one thousand dollars yeah
Yeah, that's the other thing.
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Chapter 6: What are the risks of extended warranties on vehicles?
Wait, wait, wait, what?
If it has a $5,000 repair due and Kelley Blue Book says it's worth $21,000, it's not worth $21,000 because you have a $5,000 repair due. So you need to go find out what's wrong with your car, hon. And then that will give you peace and help you make the decision about what you want to do with the car. But we're not going to have vague smells dictate $20,000 decisions.
And we're not going to not get the car checked out so we can sell it and say, we didn't know anything was wrong with it.
We're not going to do that either. No, let's go ahead and have some integrity and just find out what's going on with it, fix the car, and decide if you want to keep it or not. You make good money. You got a paid-for car.
If you don't like the car, I'm okay with you selling it, but let's go find out what's wrong with it because the motivation in this whole conversation is this, is the breakdown issue. And no, you never buy an extended warranty. Let me remind folks how extended warranties work, okay? 12% is the easiest way to do it.
12% of what you pay for an extended warranty on a car or on an electronic appliance at Best Buy, which is not the best buy if you get an extended warranty, 12% covers the statistical probability of the cost of the breakdown.
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Chapter 7: How can I budget effectively to avoid financial chaos?
88% is additional profit, marketing fees, and commissions. This is why car dealers sell extended warranties. They make more on the sale of the extended warranty, in some cases, than they do on the actual profit of the car. So extended warranties are absolutely horrible mathematics. never buy an extended warranty. But it might break down. No, it's going to break down.
But the statistical probability of the breakdown and the cost of the parts that are covered by the extended warranty represent 12% of what you paid. So if you pay $2,000 for a dadgum extended warranty on a car, which people do all the time and finance it into the car, that tells us then that $240 is what you actually covered.
You got $240 worth of actual probability, and the rest of it went in their pocket to make them smile.
I didn't think about also you paid off over seven years, so they're making a whole bunch more money.
On top of that, yeah, on top of that, you financed it so you didn't think anything about it. And got some great stories on extended warranty over the years. But number one, they half the time don't cover the stuff you thought you were getting them covered because you have to look at it when you're doing it. And so you made assumptions about it when you're buying it.
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Chapter 8: What should I do to prepare for unexpected expenses?
Don't ever buy extended warranties, but they're almost pure profit.
Yeah.
and marketing cost one more important thing when you call somebody to talk about challenges with a car don't lead with i got an audi because i thought we were talking about her belly button at first oh my god i drive an audi that's the way you enter into that conversation just saying oh i can't take you anywhere this is the ramsey show
Thanks for joining us, America. We are so glad you're with us. We appreciate you. I'm Dave Ramsey, your host. Dr. John Deloney, Ramsey Personality, is my co-host. Our question of the day is brought to you by Neighborly, your hub for home services. Neighborly's got 19 service brands nationwide and a network of local service pros. Molly Maid, Mr. Rooter Plumbing, and Lawn Pride, to name just a few.
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All right, today's question comes from Amanda in Oregon. Amanda writes, my husband and I got married last May. At the time, I did not realize he had over $25,000 in credit card debt plus a personal loan. I also didn't directly ask him if he had a bunch of credit card debt, but we did have a conversation where he made it seem that we were on the same page.
I have a little debt, a $5,000 credit card and $8,000 remaining on my car, and I've been working to get this debt paid off when I found out about his. At this point, do I keep snowballing my debt or now reconfigure everything and put my money towards his debt as well? Oh, Dave, this marriage is in trouble already. In trouble already. My friend Amanda said,
Number one, you got to deal with the trust issue here. Sounds like y'all had a conversation and he heard what you had to say about it and he was dishonest by his silence. And second, yes, now that you know it's here, this idea that you're going to pay off your quote unquote little debt and he needs to pay off his big debt and you got to take your money and put it on his debt. Y'all are married.
This is y'all's money paying off y'all's debt. This is something y'all do together. And that tells me that y'all are married and y'all are probably doing a decent job so far being roommates, but y'all are not all in together on this deal at all.
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