Dave Says, Never Finance Depreciating Assets

It’s hard not to be envious of someone who has a newer, shinier, larger rig than the one we’ve got. While our rig is only 5 years old and in great shape, it’s often challenging for me to put that envy aside and remember that our number one priority is to live debt-free, within our means.

After all, as Dave Ramsey says, we’re counting pennies and living like no one else, so that one day, we can live like no one else.

Last year I started to get tempted into getting into an RV loan for a bigger rig. As our business needs grow and we try to squeeze our business and home into a 24′ fifth wheel, I got crankier every time I felt the constraints of our limited space.

I even tried to rationalize going into debt over a new rig, because our RV is our primary residence. Since Dave Ramsey says a principal residence is about the only thing that’s acceptable to finance, I desperately wanted to believe that he would agree with my rationalization.

The only way to know for sure, was to give Dave a call on his daily radio show.

So I did. And I got through. You can read the entire conversation in our LiveWorkDream blog, but here’s what he said about RV financing, in a nutshell:

 . . And so you don’t want to finance things that cost you. You don’t want to finance anything, but for sure you don’t want to finance something that’s going down. That’s the direction. I wish I could tell you I thought it was a good idea, but no. same thing I would tell you by the way if you were living on a houseboat. No I wouldn’t finance it. No, I wouldn’t finance the move up, and no I wouldn’t finance the move just because it’s the primary residence.

Dave’s advice? Dip into savings to make up for some of the difference between the trade in value of our current rig and a new one, then save our pennies for the rest.

And that settles the discussion. The only thing you should go into debt for are appreciating assets, not ones that take a dump the minute you drive them off the lot.

Duh. Somewhere way back in my brain, I knew this fact, but I got swayed by all of the pretty new RVs I see all summer long. It was great to get a reality check from Dave in front of a few million listeners!


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