2 Times Dave Ramsey and Rachel Cruze Clashed on Money — Here’s Who Got It Right
Written by
Peter Burns
Edited by
Molly Sullivan
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Good financial advice can be hard to find. Online, many claim to have all the answers and offer advice that ranges from common-sense tips to experimental tactics. Some money gurus have an approach that provides consistent results for those who listen, but that doesn’t mean they all agree on every point.
Dave Ramsey and his daughter, Rachel Cruze, are personal financial experts who often appear as cohosts of “The Ramsey Show”and run the financial guidance company Ramsey Solutions. Even though they work as a team to help people make better financial decisions, they don’t always see eye to eye. Here are two times that Ramsey and Cruze disagreed on money advice.
Taylor Swift Tickets
One conflict between the two finance gurus came about when a caller explained she had funded her daughter’s desire to go to a Taylor Swift concert. At the time, the 22-year-old daughter had about $24,000 in student loan debt. When the mother realized they could make $3,000 to $4,000 per ticket by reselling them, she called the show to get some advice.
Initially, Cruze took the call with another host, who determined it was best to attend the once-in-a-lifetime Taylor Swift concert. The tickets only cost around $200 each and would result in lasting memories. While it would help take a large chunk out of the daughter’s student loan debt, it could lead to regret because she missed the show.
Ramsey disagreed and said, “If I have $24,000 of student loan debt and I wake up and there’s $12,000 lying in the middle of my kitchen table, do I go buy Taylor Swift concerts or put it on my student loan? You put it on your student loan. It’s a no-brainer.”
However, Ramsey admitted that the mother gave her daughter the ticket funds as a gift and shouldn’t then take control to force her to resell the tickets.
There isn’t a clear answer on which side is better. Selling high-demand tickets can bring in a lot of money and instill an entrepreneurial spirit that could lead to more opportunities. On the flipside, forcing your daughter to sell coveted tickets could lead to animosity and a rift in the relationship. Since the mother gave the money to her daughter to buy tickets, it is ultimately the daughter’s decision. This makes Cruze, and kind of Ramsey, the winner of this argument.
Buying a New Car
Cruze and Ramsey got into another heated debate over whether a caller should pull the trigger on buying a new car. In most situations, the two of them agree that you shouldn’t purchase a new vehicle unless you’ve got a net worth of over $1 million because of how quickly cars depreciate.
A new car depreciates by around 20% over the first year and an additional 15% for the next four years. This means by the time your new car is 5 years old, you’ll have a car worth only 40% of its original price. While this is typically a sound concept, this caller detailed some unusual circumstances that made Cruze reconsider the rule.
The caller explained that his wife needed a new car, and they have $25,000 in cash to put toward one. At the time, the used car market was inflated, and the caller discovered he could buy a new car at a lower price. He asked if breaking the “no new car rule” in this case was OK.
Ramsey was skeptical that the dealership wouldn’t mark the price up before the purchase. He said buying the new car and then being able to sell the car used the next day at a profit sounded too good to be true. Ramsey also disagreed with buying a new car because it could lead to bad habits. If the caller bought a new car once, he may not go back to used in the future.
Cruze disagreed, citing the math. If the used car was more expensive than the new car, he should buy the new car. Not only is it less money, but the new car will last longer, have a warranty and come with the peace of mind that there weren’t any problems caused by the previous owner.
If you understand why rules are in place, sometimes you can break them. In this case, paying less money for a car that’s in better shape seems like the best choice, making Cruze right.
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