Personal Finance

I make $80,000 a year and Dave Ramsey told me this is why I'm staying broke

Christy Bieber

Published: February 25, 2025 11:02 am

Recently, a caller to the Dave Ramsey Show asked about a purchase he was hoping to make. The caller said he makes $80,000 per year and is currently maxing out his 401(k) and IRA. He is also debt-free. He was calling because he has $30,000 saved that he wants to use to buy a sports car but he’s not sure if he should invest the money instead.

Dave had some blunt advice for him, explaining that if you want to build wealth instead of staying broke, there’s one simple rule to keep in mind.

Here’s what Ramsey said will stop you from building wealth

Ramsey told the caller point-blank that buying the car was not a good idea if he wanted to end up rich instead of broke.  Ramsey said that while he loves cars “the stupid things go down in value.” He then made clear that “If you’re going to build wealth, you have to keep as small an amount as possible going into things that go down in value.”

This is pretty good advice in general because cars lose a good portion of their value the minute you drive them off the lot. They are not by any definition an investment, and if you borrow to buy one, then you end up committing to expensive monthly car payments that prevent you from doing other things with your money.

Ramsey regularly warns people about borrowing too much for vehicles, and about the dangers of having car loans, and he stresses that you should aim to buy a cheap used car in cash or pay off your car loan as quickly as possible so you can avoid having a car payment all the time.

Is it ever OK to splurge? 

Now, while Ramsey is right that cars can keep you broke, and he is also correct that cars aren’t a great investment, this caller had a lot to say about his finances that it’s important to listen to.

Specifically, the caller explained that he is already maxing out his retirement accounts and he is debt-free. He also said that he had saved up $30,000 to pay for the car.

Now, the reality is that the car is still not the best thing he could do with his money. He could invest more, or he could work on buying a house so he can stop renting. However, he’s also doing the right things already and if a car is something he really wants, he has made moves to buy it responsibly so he shouldn’t just abandon the idea of making the purchase.

You can and should focus on saving and preparing for the future first. But, once you have done the responsible stuff and you are already working toward building wealth, you don’t necessarily have to give up buying stuff that you love. If this caller to the Ramsey Show can keep investing and working towards other goals, can stay debt-free, and can actually genuinely afford the car — including ongoing insurance costs — then he may be justified in making the purchase.

Trying to deprive yourself of stuff you want for the entirety of your life is a quick way to get burned out on financial responsibility — and there’s no reason to do it. Make the right money moves, save and invest, and save up for your splurges. If you do that, you aren’t going to end up broke just because you buy something that makes you happy.