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Dave Ramsey is America's trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com. |
You do not want the debt on all your vehicles to be more than half of your annual income. Pay them off quickly if you have the discipline to keep to a strict budget. Are You Willing To Do What It Takes? Dear Dave, I owe $17,000 on my car, and it is my largest and only debt. I think I can have it paid off in two years, because I bring home about $2,800 a month and my monthly expenses are $2,100. I also just got a $2,000 tax refund. Should I pay it off as fast as possible, or sell the car? Justice Dear Justice, If you think you can have the car paid off in two years or less, that’s what I’d do. The question is this: Are you willing to do what it’ll take to make that happen? It’s going to mean lots of discipline and hard work on your part, in addition to living on a really strict budget. But in return, you’ll have that car loan off your back for good. You don’t want the debt on all your vehicles to be more than half of your annual income. If that’s the case, it means you have too much money tied up in things that are going down in value. If you bring home $2,800 a month, you probably make around $40,000 a year. Technically, your car loan is under half in this scenario, but it’s still pretty expensive. I’d get serious about getting out of debt, and pay the thing off! - Dave |
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