Tuesday, July 7, 2015

Where are you in your financial plan?

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Author and radio talk show host Dave Ramsey.
Author and radio talk show host Dave Ramsey.
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Dear Dave,

What things do you advise buying used versus buying brand new?

-Amy

Dear Amy,

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  • I'm afraid there's not one good, across the board answer, because it all depends on where you are in your financial plan.

    When it comes to cars, you should always buy good, used vehicles, unless you have a million dollars or more in the bank. New automobiles drop in value like a rock, so buy smart and let someone else take the hit in depreciation. You don't become wealthy by investing in things that go the wrong way.

    If you're talking about clothing, and you're broke or trying to get out of debt, there's absolutely nothing wrong with shopping consignment stores - especially for kids. They wear things three times, and then they've outgrown them. "Experienced" clothing is a great buy for adults, too.

    Of course there are other things, but here's the deal. As your money situation improves, you'll be able to buy more new things. The price of "new" will become a smaller and smaller percentage of your financial world.

    But when you're broke, deep in debt or don't have a big income, the money you spend on anything is a big percentage. At times like this, a decent $50 washer or dryer in the classifieds can be the best deal on the planet!

    -Dave

    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. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids and is out now. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.

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