This kid’s a planner!
What would be your advice for someone who is renting an apartment but has never rented before? I’m 16, and I’m trying to create a plan for when I get out on my own in a couple of years. I’ve never had any debt, and don’t have a credit score. Is it going to be hard to find a place to live?
I get where you’re coming from. A lot of people believe it’s hard to get an apartment without a credit score, and that’s just not the case. In most cases, if you’ve got money for a deposit and proof of employment, you can find a little apartment somewhere.
Anytime you’re renting it should be because you’re in a stage of your life where you’re not going to be in the area long, you’re saving money to buy a home, or you’re working your way out from under a lot of debt. Think of it as “rent patience.” Renting should be a temporary stop along the road, not a way of life. You’re parked and you’re on hold until you’re ready for a house or you get your finances in order.
I don’t hate apartments, and renting isn’t evil. But renting for a decade or two is not a smart move. How much do you want to pay for patience? The least amount possible. You want something clean and safe, but nothing too fancy. You don’t need a racquetball court, skylight or hot tub.
I love that you’re a planner, Riley. Keep looking ahead and thinking toward the future!
Don’t fall for it!
Could you explain why buying a new car at 0% interest isn’t a good idea?
The only way you have a chance of getting 0% interest on a new car is if you have perfect credit and pay full MSRP (manufacturer’s suggested retail price). But, if you walk onto a car lot with cash, and haggle with the salesperson a little bit, they’ll knock a bunch off the sticker price. If you can buy the car for less than the 0% interest gimmick, how is that 0%? See what I’m saying? The cash buyer pays less.
Besides, you shouldn’t even consider buying a brand new car, unless you’re debt-free and have $1 million or more in the bank. You lose a ton in value the second you drive a new car off the lot. How is that 0%? A new car also loses about 60% of its value in the first four years after you buy it. How is that 0%?
The whole 0% interest gimmick tricks a lot of unsuspecting folks into buying something they don’t need and can’t afford!
This article, Dave Says - July 6, 2020, was first published by Dave Ramsey and is reprinted here with his premission. Please visit his website, DaveRamsey.com.