Dear Dave -- I made the mistake of leasing a car a while back,
and the lease is up in about nine months. Should I save up the
money between now and then to buy it, or save as much as I can to
pay down my student loans?
Buy it ... or turn it in?
I made the mistake of leasing a car a while back, and the lease
is up in about nine months. Should I save up the money between now
and then to buy it, or save as much as I can to pay down my student
At the end of a lease the price for which you can purchase the
car is called the residual value. This amount is preset when you
lease the vehicle. So the big question right now is, what's the car
If the company thought it would be worth $12,000 and it's
actually worth $14,000, that would be a good deal, and you'd want
to buy it instead of turning in the car. Even if you were going to
turn around and resell it, you'd still want to go ahead and buy.
Another big thing is that I'd never tell you to finance a car after
the lease term. There's no difference between that and walking onto
a car lot and financing any other $12,000 car.
Look at it this way. You basically have a $12,000 car loan right
now, and you'd only be changing the format from leasing to payments
if you financed the thing. Should you keep this vehicle? Only if
it's a small percentage of your income. If you make $60,000 or
more, I'd probably say save up, pay cash, and keep the car. But if
you're making closer to $30,000 the answer is no.
Fun to date, but not to marry
I'm dating a man who is really exciting and fun, but he has well
over $100,000 in debt. He has nice cars, a boat and he travels a
lot, and he does it all on credit. He wants us to get married, but
his view of money worries me. What should I do?
The fact that you're worried about this situation means you
realize that fun and exciting don't necessarily translate into
being wise. I'm sure he's a nice guy, but your concern tells me
that you two are from completely different planets when it comes to
handling money. And that can be a death knell to a marriage.
Disagreements over money and finances are the number-one cause
of marital strife and divorce inNorth Americatoday. Fighting over
debt and the stress brought on by financial problems will take a
heavy toll on any relationship. When you're not on the same page
with how to handle your money, you're not on the same page of life.
How you spend your money says volumes about who you are, where your
values lie, and what's important to you.
This guy is fun because he's impulsive and has a lot of toys.
But the fact that he's gone into debt for this lifestyle also means
he's a little boy and not a responsible man. And unless you guys
can get on the same page with how money is handled, I would
strongly advise not going forward with a wedding.
For this to get serious and turn into marriage material, one of
you will have to change. Either he'll have to straighten up and
start behaving wisely with money, or you'll have to agree to enjoy
living deeply in debt.
Dave Ramsey is America's trusted voice on money and
business. He's authored four New York Times best-selling books:
Financial Peace, More Than Enough, The Total Money Makeover and
EntreLeadership. The Dave Ramsey Show is heard by more than 5
million listeners each week on more than 500 radio stations. Follow
Dave on Twitter at @DaveRamsey and on the web at
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