0:00

Is it really possible to

0:02

travel for free using points?

0:05

And

0:10

I know a lot of people have very strong feelings about this,

0:12

but it is possible to choose something different

0:15

than what credit card companies or airline

0:17

companies are trying to sell you.

0:21

Hey guys, welcome to this episode

0:23

of The Rachel Cruze Show podcast. I'm so

0:25

glad that you're here. So in

0:27

this episode, we're gonna talk about how to never

0:29

pay full price for an item again.

0:32

And we're gonna talk about travel hacking.

0:35

You may have heard of it before, but I have

0:37

some serious thoughts on this and how it's

0:39

impacting your wallet. Then

0:42

I'll go over what not to say when

0:44

buying a car. But first, I'm bringing on to

0:46

the show a special guest to talk through the best

0:48

ways to negotiate everything from a large

0:50

purchase

0:51

to a small one. And that is my dad,

0:53

Dave Ramsey. So take a listen. I'm

0:57

so excited about this episode because

0:59

I'm joined by finance expert, host of The Ramsey Show,

1:01

and my dad, Dave Ramsey. Hey,

1:03

dad.

1:04

Good to be back. Okay, so a month or

1:06

two ago, George Campbell and I did an episode

1:08

on negotiation on our podcast, Smart

1:10

Money Happy Hour. And it did great because George

1:13

and I went back and forth on this role

1:15

play where he was trying to sell me a boat. And

1:18

it was great. It was awesome because there's a

1:20

lot to learn about negotiation. And

1:22

so I realized, oh my gosh, I

1:25

feel more awkward

1:27

in asking for a deal or just trying

1:29

to play the game of negotiation. George loves

1:31

it. You love it. I feel

1:33

like growing up, that's part of, though,

1:36

being wise with money, especially if you're on a tight budget you're like,

1:38

oh yeah, yeah, we're gonna go in and ask for a deal. And you still,

1:40

I feel like, with cars and different stuff, right,

1:43

you still negotiate.

1:44

Yeah, I ask for a deal all the time, sure. Not

1:46

because I'm a cheapskate, but just because it's part

1:49

of the rhythm of being a noble hillbilly,

1:51

you're supposed to get a deal. I know, because

1:53

growing up, do you feel like you did it more

1:55

when you guys were tight

1:58

with money? Like if you had to walk in and- by a washer

2:00

and dryer, were you more apt to like, no, no, we

2:02

have to get this deal? Like what did that look like? Yeah,

2:06

probably. I guess we were tighter

2:08

on money, so we were more careful with every little

2:10

thing. Then we might be a little sloppy

2:13

today on, you know, not every single

2:15

thing, but you know, my mindset

2:17

is always, you know, just ask, you

2:19

know, is there a promo code? Is there a coupon?

2:22

Is there a deal? Are you getting ready to put this

2:24

on sale this weekend? And because, you know,

2:27

these stores in particular, if you're dealing

2:29

with that, their job is

2:32

to sell stuff. So they

2:34

like to sell stuff. So it's a blessing

2:36

to them if we buy stuff. So it's

2:38

always good to just try to see if there's something that motivates

2:41

us to step into the deal right then. Yeah,

2:43

how, okay, like out of like 10

2:46

times you ask for a deal, how often

2:48

do you actually get one, do you think? I almost always get

2:50

something. Do you think it's because it's you? No.

2:53

You think it's like just asking for it? No, it's just,

2:55

you know, honestly,

2:58

because it's me, I get one thing or the other.

3:00

I either get like they got their dukes up like,

3:02

I'm gonna, you know, I don't want, I'm gonna fight Dave Ramsey. I'm gonna get

3:04

all the money I can out of this guy. I'm gonna fight Dave Ramsey, you know. I

3:07

don't want Dave Ramsey's always looking for a deal or

3:10

they're like, oh, he's got plenty of money. I'm gonna take

3:12

every bit he's got. Yes, yes. So I have to,

3:14

we get some of that too. Totally. And so, but

3:16

most of the time when we're just dealing with regular folks

3:18

in a regular transaction and they're treating us like

3:20

regular folks. Right. Then it's just like,

3:23

guys, you know, that doesn't work. You know, let's figure out a

3:25

way that this works and, you

3:27

know, it makes me nervous. Okay,

3:28

well, we're gonna get into it. Okay, so he's gonna be walking us

3:30

through four steps to a successful negotiation.

3:33

Plus he's gonna share some of the biggest dues and

3:35

don'ts when it comes to the topic. All right, let's

3:37

set up the first thing. Okay, I'm walking

3:39

in to an appliance

3:40

store. I gotta buy a dryer. Our dryer broke.

3:43

I need to buy a dryer.

3:45

So my first question to you is, do I ask

3:47

for help or do I just mosey

3:50

the aisles and not look desperate and

3:52

see if they come up to me?

3:54

Oh, I don't think it matters. Okay. That's

3:56

not going to affect it. You

3:58

know, it's just whether the salesperson and that person. particular

4:00

store is empowered to

4:02

change prices. If they're not empowered,

4:04

then you're going to have to talk to a salesperson and whoever

4:07

their leader is, whoever their manager is

4:09

in the store. So you could ask for help or have

4:11

them come. Yeah, either way. They're not a power. No,

4:13

because this is not a conflict. This

4:17

is a pleasant experience. They're

4:20

making money and I'm buying

4:22

a dryer. It's a pleasant experience. All the

4:24

way around. Okay. So

4:26

then again, you mentioned it earlier. If

4:28

you're talking to the 24-year-old

4:30

sales guy, would you automatically be like,

4:32

hey, can you grab your manager? I'd love

4:35

to bring him in. Would you offer that or you

4:37

could just go back and forth with the sales guy? I

4:39

just ask him. I just say, listen,

4:41

we're going to have to do something different

4:44

than we're doing right here in order for me to get

4:46

the dryer because this isn't working. Can you

4:48

pull that off or do we need to bring in your

4:50

leader, your manager? It's okay

4:52

with me either way, but what

4:55

we're doing right here is not going to work. So we're going to have to take

4:58

it to another level. In order

5:00

to do that, can you do that? They're like,

5:02

sometimes they'll go, okay. They've

5:05

got the power to mark. I didn't

5:07

tell you about this, but there's this way we can, if

5:09

you wait all Saturday morning, we can do it because you're

5:11

getting ready to go on sale for Labor Day or whatever,

5:14

all that kind of garbage. They'll pull something

5:16

out of their hat or they'll go, Mr.

5:18

Ramsey, we've done all we can do. So

5:21

let's ask your manager then and just see

5:23

if there's something we can do because we're not going

5:25

to be able to connect at this level. Okay.

5:27

It's good. Okay. Next, do you tell

5:30

them that you have a

5:32

certain amount of money to spend? Do you tell them that

5:34

amount or do you let them

5:36

negotiate, or

5:39

say the price and you just try to bring them down

5:41

to what you, like you know the total in your head? Is

5:44

it, do you lose power sharing that total?

5:47

Because George in our boat discussions,

5:49

I had like $65,000 by this boat or whatever. He

5:52

told me, he was like, no, you never

5:55

share upfront what you have. You always

5:57

work them down or something. I don't remember

5:59

the exact exact. but I remember he mentioned

6:01

that. So I was like, oh yeah, I don't know.

6:03

I probably wouldn't, depending on the situation, what

6:05

is it? Is it a washer and dryer at a retail

6:08

store? You know, you're

6:10

not dealing with anything there. But if you're buying a

6:12

boat from an individual that's

6:14

selling a used boat, I definitely

6:17

would not tell them that. And the amount of money

6:19

you have is not relative to the discussion. What's

6:21

relative to the discussion is, what's the

6:23

boat worth and what am I willing to pay for it? Okay,

6:25

that's fair. That's really all that matters.

6:27

Yeah, that's good, that's good. And then how long

6:29

do you go back and forth with someone

6:32

until you realize, oh yeah, it's not

6:34

gonna be, there's not gonna be a deal here.

6:36

I try not to get into the go

6:38

back and forth thing. I just go,

6:40

you know, give me your best deal. What

6:42

have you got here? And, you know, they'll

6:45

negotiate with themselves if you ask them to. You

6:48

know, it's like, you know, you're asking 65,000 and

6:50

you go, well, that's cool, but, you know,

6:53

I'm here with cash and we can do a deal

6:55

today. What's your best deal? The

6:58

one that makes you hurt just a little bit, but still the boat's

7:00

gone. Cause you're gonna get rid of the boat

7:02

today, right? And they're like, yeah, yeah. Well, you know,

7:04

what's your very best deal? And they go, you know, 55,000.

7:07

Well, I might've offered 59, you know? Totally,

7:10

yeah, yeah, yeah. You need to be quiet and let them

7:12

come on down. Best do a higher price. And then when

7:14

they go, and I go, what is that? All you can do, 55, and

7:17

they go, huh, I can do 54, five.

7:20

You know, I mean, okay, well, you

7:22

know, I'm willing to do, and then I'll put

7:24

a price. You know, I'm willing to do 52 right

7:26

now. Okay, so you still even go a little lower. Yeah,

7:29

sure, sure, why not? Because all

7:31

they can do is say, no, I told you, 54 is all

7:33

I can do. Yeah. Well, okay, then we're there.

7:36

And all of this is contingent

7:38

upon this. There's three

7:40

things that make a negotiation successful.

7:44

One is you as a buyer have

7:46

to have a lot of knowledge

7:49

about the value and the details

7:52

of what you're doing. Yeah. So if I'm going to

7:54

look at a 65,000 dollar boat or a Washington dryer,

7:56

I'm going to know the price of that Washington dryer, whole

7:58

bunch of different places. I know I can get it

8:00

here at Amazon, I know I can get it here shipped,

8:03

I know I can get it at Costco there, I know I can get

8:05

it at Lowe's there, whatever, right? I'm gonna

8:07

have a look through their website. And then

8:09

if I wander into the store, then the guy goes

8:11

and I go, well man, I get like six places cheaper

8:13

than that. So your knowledge base

8:16

of the thing, and that $65,000 boat,

8:18

I've looked it up on Kelly Blue Book. I've

8:20

studied some of the marine websites where

8:22

they're selling boats and just a little, I'm actually

8:25

not coming in cold, like I have no idea what this boat

8:27

is worth. I actually know what it's worth. That

8:29

happened to me with George. I know

8:31

the boat is worth 60, and so

8:33

I know if I can get it for 53, that

8:36

I've gotten a good deal. And he got

8:38

rid of a boat that is sitting in his driveway blocking

8:40

everything. He needs to get rid of it, so it's good for

8:42

him. So the

8:44

second thing is know your options, which

8:47

is part of the knowledge base. You gotta

8:49

know the product, know what it is, know what the value

8:52

is, and then know your options. Know where else you

8:54

can do it. You don't have to buy that boat. I

8:56

don't have to buy that washer and dryer two day at

8:58

that place.

8:59

And I think that's one of the biggest mistakes people make. And

9:01

again, you could go range from like washing

9:03

dryer to a house even. But you get so

9:06

locked in on one individual

9:08

thing, and you're like, this is all I want, this is all I want.

9:10

And then suddenly

9:11

you lose power. You've lost it all. Because

9:14

what you don't realize is that the human

9:16

on the other side, even though they don't know

9:18

they're doing it, they have taken

9:20

all your cues in. Your body language

9:22

changes. Your voice pitch changes.

9:25

The way you're standing changes. The

9:27

way your eyes are moving changes. Your

9:31

cadence and your voice. Everything changes

9:34

when you are married to something. Yeah, and

9:36

desperate for that one. You have surrendered. And

9:38

all of the, you know, all the body, and

9:40

they're like, oh, that one's dead. Let's just wrap it up. But

9:43

if you're still in the game, and you're still like,

9:47

you know, I can go someplace else

9:49

and they know you mean it, then all of a sudden that

9:51

changes their need to

9:54

help you with the transaction. And

9:57

then the third thing that goes with that is patience. The

10:00

walking away is knowing the product,

10:03

knowing your options, and then patience. And that

10:05

gives you walk away power. And patience is, I

10:07

don't have to do that. Yeah, yeah.

10:10

Because we really, there's very few of these things we have to do,

10:12

but we emotionally get all excited and

10:14

we get car fever and so, ooh,

10:16

I have to buy the car. And it's the only one and they're

10:19

rare and they're hard to get and ooh, and

10:21

all this drama queen crap in our own head

10:23

costs us tens of thousands of dollars.

10:26

Yes, that's so true

10:27

though. It is so emotional, and especially depending

10:29

on what it is, I can feel that,

10:31

feel it so much. Okay, so now that we've kind

10:33

of gone over some of that, because I think those are such

10:35

great tips, okay, are there any things that you

10:37

just

10:38

don't do? Like avoid this.

10:39

Well, I mean, we would be the opposite of it. You don't

10:41

walk in with no knowledge. You don't walk in

10:44

and go, oh! You know, and

10:46

because they can read, as you're walking up to

10:48

the couch, the furniture salesman goes, oh, they

10:50

already bought the couch. Yep, yep. Or

10:53

they're going, no, they're kind of looking and they

10:55

might go to the other store. And

10:57

so when, you know, they can read your

10:59

body language, again, your voice tone, and they don't

11:01

know they're doing it. It's not like they had some class on

11:03

it. So humans, we know, you just

11:06

look over and you go, well, that one bought that, and there's

11:08

no playing hard to get here at all. And

11:11

so the other thing I don't

11:14

do is, I'm not trying to harm the other side.

11:16

Not to bring harm to them. Not be

11:18

mean and rude. Well, it's not, and therefore

11:20

it's not a conflict. It's actually a

11:22

blessing to the guy if we buy his boat and

11:24

get it out of his driveway, and he has cash on his hand

11:27

to go do whatever it is he's gonna do with his

11:29

cash. He wanted rid of the boat. We got rid of the boat. He

11:31

got, his goal was accomplished. That's a win

11:33

for him. Win for us is we got a boat and

11:35

we got a good price on it based on

11:37

our discussion. And so this is a win-win

11:39

scenario. If you have to harm someone,

11:42

take advantage of someone, lie to someone

11:45

in order to get a good deal, that's completely

11:47

off limits. You have to have integrity,

11:49

and you can have the best interest of the other party

11:51

at heart.

11:52

Yeah, and do you think, is there

11:54

like ever a scenario where somebody is selling

11:57

something, we'll use a car, and you've done all your research

11:59

and you know it's. worth 20 grand. And

12:01

they're like, I don't know if this would ever happen, but

12:03

they're, they're like,

12:04

Oh, I don't know, maybe 12. And

12:06

you're thinking, Oh no, like you

12:08

could be getting more for

12:10

this and you don't know what you're doing on that

12:12

side. I don't know. Does that make sense?

12:13

I've done that buying like real

12:15

estate, for instance, I said, you know, the appraisal

12:18

on this property is 300,000. That

12:21

means you could probably get 300,000 for it. And

12:23

you really need to think about that. Yeah. But

12:25

if you want it sold today and we'll

12:27

close it Monday, I'll give you cash. The deal

12:30

I'm willing to do is 200, but you know,

12:32

you really need to think about that and just kind of put it

12:34

back on them. Cause you don't want them later

12:36

feeling like, well, they ripped me off. I'm like, you

12:38

know, and I've heard some wonderful stories with

12:41

Ramsey listeners as an example. I talked

12:43

to one not long ago and lady said, you

12:45

know, we had a cheap car that we were

12:47

selling. We were moving up. Uh, or

12:50

we were buying a car. I'm sorry for our daughter and,

12:52

um, uh, for a teenager, a cheap

12:55

car and the people they're talking to. And so

12:57

they said, why are you selling the car? We're selling it to get out of debt.

13:00

Or they said, you know, we're going

13:02

to pay full price to help them on

13:04

a debt free journey. It was more

13:06

of a generosity move than it was a

13:08

negotiation move. Yeah. Totally. But they just said

13:10

that. Or I've run into situations

13:13

working in the church in a ministry situation

13:15

where there's a widow involved and

13:17

someone says, okay, you know, you don't take advantage

13:20

of those. I mean, you want to make sure you pay too

13:22

much there, right? But that's not really a negotiation

13:25

thing. That's just a values issue. That's

13:27

right. That's

13:27

right. And I think that's where people get, maybe

13:29

could get tripped up when we're talking about negotiation,

13:32

all of it where it's like, not only do I not

13:34

want to feel cheap, but I also like don't want the other

13:36

person to walk away with a bad deal. I want us

13:38

to both win and you can do that. You can do that

13:40

in a negotiation where you both walk away.

13:42

Exactly. I mean, the ultimate is the garage

13:44

sale, right? If it doesn't sell by the end of

13:46

the day, what happens to the crap in the

13:48

garage sale? It goes to Salvation

13:51

Army. For zero. And

13:53

so anything you get for that couch

13:55

is great at three o'clock in the afternoon and the

13:57

garage sale is way more than you're going. and

14:00

get tomorrow at Salvation Army. Yeah.

14:02

And we got it out of your garage and you didn't

14:04

have to move it. Yes. So everybody's

14:06

winning here. Yeah,

14:07

that's good. That's so good. Okay,

14:09

so let's talk about what people should do in

14:12

like very specific scenarios that they

14:14

probably will find themselves in. So the first

14:16

big one buying a house.

14:18

Negotiations around house prices, which again,

14:20

the market is, it's so wild, it's high, but

14:23

yet people, depending on where they are

14:25

financially still are in a position that they want

14:27

to buy a house and they're able to. So

14:29

they're walking into that scenario.

14:31

What are some things in there that they should do in the housing

14:34

one specifically?

14:35

Well, again, let's go back to our big three.

14:37

Okay, we're gonna have a lot of knowledge about it. What's

14:39

the square foot, every square foot price on the size

14:42

of home in the area that I'm looking for. Therefore,

14:44

what is this house worth? Okay,

14:47

and by the time you've looked at a few

14:49

neighborhoods and you've kind of got it dialed in, your

14:51

realtor, your real estate agent, your Ramsey

14:54

trusted agent should be walking with you and saying, okay,

14:56

here's comps, here's comparable sales in the

14:58

area. So, you know, you're looking

15:00

at that house and you're going, it's just

15:03

not a $900,000 house. It's a $700,000 house.

15:06

The guy's got $900 on it, but it's just not.

15:08

It's not worth that. The value, the appraise,

15:11

it won't appraise for that. And so

15:13

you know that going in. So you gotta know what's going on. You

15:15

don't get married to it. You gotta maintain

15:17

walk away. And the way you don't get married to it is you have lots

15:19

of options. You just keep looking. There's another

15:21

house. There's a house on every stinking corner. We'll find

15:23

another house. And so slow

15:26

down. And so when

15:28

people got, you know, in this last cycle, when it got so frenzied,

15:31

people were overpaying because

15:33

they were violating every bit of that. And

15:35

they were just like, they were completely on fire.

15:38

They were in the fever mode and run, run,

15:40

run, run, run. I'm not gonna get asked as if

15:42

in your entire life, you're not gonna get

15:44

a house if you don't buy one right now in

15:47

one of the most frenzied times in history. Well,

15:50

that's crazy. Just calm down.

15:52

So, you know, for instance, we have bought, Ramsey

15:54

said bought no real estate recently.

15:58

There's not been deals.

15:59

I buy real estate, unless I buy it at a deal. There's not even been

16:02

any bargains out there. Things are slowing down. We

16:04

may see a few bargains again. So we may be

16:06

back in the market again. But we just set

16:08

on the sidelines in terms of

16:10

investment real estate. And we're not

16:12

gonna buy it unless it's a deal. So for a family though

16:15

that's buying just their primary home, if

16:16

you're in a financial position to do it though.

16:19

It's a great time to buy.

16:20

But don't overpay though.

16:22

The point is don't overpay because you didn't

16:24

control your

16:26

emotions. And if you've got other

16:28

options because you've looked at a lot of different properties. Sharon

16:31

and I sold our home back in 20 and

16:34

we knew we were moving to a certain neighborhood. So we had looked

16:36

at eight houses in that neighborhood

16:39

and immediately had ruled out five of them. So

16:41

there were three possibilities. And

16:43

we were gonna buy one of them because that's where

16:45

we wanted to be. And so we bounced, we hit one

16:48

and couldn't, and

16:50

we bounced and went to the second one. We're living

16:53

in the second choice. And

16:56

it turned out to be okay. It's

16:59

a great house. Probably better than the other one. I

17:01

think God had his hand on it. But

17:03

you just can't get all fatalistic

17:05

as if there's one. There's only one. Oh

17:08

brother. Drama.

17:10

Okay, so for

17:12

cars, what's some of the rules, the

17:14

three you're talking about for sure. But things

17:17

like you wanna check to make sure like

17:19

clean, take it to a mechanic, making

17:21

sure that it's inspected. Like what are a couple

17:23

of those nuance things? It's great

17:25

to have the car having a mechanic doing inspection

17:27

on it. If you wanna get real detailed, they can do an oil

17:30

change with the owner's permission and

17:32

do an analysis on the oil. Because what's

17:34

in the oil, it tells you how bad the engine is. If

17:37

there's shavings in there and so forth, it tells you

17:39

the engine's got some wear. There's smoke

17:41

in that oil, that engine's got some wear. And

17:44

so you can look at stuff like that. If you wanna get real technical

17:46

about it, I wouldn't do all that for a 20,000 and under car

17:48

though. If you're buying

17:50

a super something expensive, I probably have it looked at. If

17:53

you're not getting it from a reputable dealer who's

17:55

already combed through it. Do you think dealers or

17:57

individual buyers for someone that's buying a used.

18:00

you know, $25,000 car.

18:01

Individual,

18:03

individual. Because the individual doesn't

18:05

have any, they don't have cost of goods

18:07

sold in it. If a dealer's got that $25,000 car

18:09

sitting there, it's because he's traded for

18:12

it or he bought it at auction to put on his lot. That means

18:14

he just the other day paid $18,000 for it.

18:18

The seller of an

18:21

individual selling a $25,000 car, they

18:23

bought it four years ago for $50,000. Yeah.

18:26

And so what they paid for it is

18:28

completely irrelevant in the discussion

18:30

as to what you'll pay for it today. What

18:33

the dealer paid for it is very relevant because

18:35

they're not gonna buy it for $18,000 and then lose money.

18:37

Right, right. So their cost

18:40

of goods sold enters into that. They're looking at margins

18:42

is what they're looking at. Individual seller

18:44

is not, their margins don't come into it. What

18:47

they paid for it's irrelevant. It's just what's the car

18:49

worth? What are they willing to take for

18:51

it? What's their situation? How

18:53

motivated are they to sell it? But

18:56

you can almost always get a better deal from

18:58

an individual. Yeah, those are

18:59

great tips. I think one of the most powerful

19:01

things though for people to take away from this is that

19:03

negotiation is not bad. And

19:06

that you can have a level of power in

19:08

it to make a wise decision for

19:10

your family and not harm the other person in the

19:12

product. Absolutely. I mean, if you just change

19:14

your moccasins for a second with the person who,

19:17

if you have something you wanna sell, if

19:19

someone buys it from you at a price

19:21

that you're okay with, they have blessed

19:23

you. Yeah, yeah. And

19:26

so you are a blessing when you're a buyer. You're

19:29

bringing them good news. I

19:32

have money. I have money. Yeah, I have money and you're not gonna

19:34

have to have that boat in your driveway anymore. It's a wonderful

19:37

day for both of us. So it's

19:39

not a conflict. It's a dance

19:42

and everybody's enjoying the party.

19:44

And do the dance because it'll end up saving

19:46

you money probably if you get the deal. That's the other great

19:48

thing. Yeah.

19:49

As you walk away. I think when people don't ask

19:51

for a bargain or refuse

19:54

to negotiate for that boat, it's

19:56

because A, they feel like it's a conflict or

19:59

B.

20:00

they feel like they're harming someone.

20:02

And you just have to take those things off the table. If

20:05

it is a conflict or you're harming someone, you

20:07

should go to another deal. You should walk away. You

20:09

shouldn't do something to harm someone. But

20:12

I used to buy foreclosure houses, and

20:14

we would buy them and close the deal on Thursday

20:17

before they get foreclosed on on Friday. So

20:20

these people did not get foreclosed on and

20:22

put money in their pocket. The 24

20:25

hours later, they would have zero and

20:27

a foreclosure on their record. Obviously,

20:29

I'm getting a great buy, but it saved

20:31

their lives.

20:32

Yeah, yeah, in that way, totally, totally.

20:35

Negotiation is a great topic, you guys. And

20:37

again, it can be a little intimidating at times, but

20:39

you guys step into it, step into it, especially

20:41

these bigger purchases that you're doing, whether

20:43

it's appliances, cars, even houses.

20:46

Use these tips because it'll save some money,

20:48

which is awesome. Okay, so one way, if

20:51

you are planning to buy something that I would

20:53

really recommend to use is the EveryDollar

20:55

app. So we talk about this app all the time on the show, but

20:57

it's great for budgeting, it's also great for planning.

20:59

So if you know ahead of time, hey, we're gonna have to replace the car,

21:02

probably by next summer, you can start putting money

21:04

away and actually using EveryDollar has

21:06

a tool in there to help with the sinking fund

21:09

and to help you when it comes to these big purchases. So make

21:11

sure to download it for free, check out EveryDollar.

21:14

And if you're interested in hearing more, learning more

21:16

from Dave himself, all of us Ramsey

21:18

personnies, make sure to check out the Ramsey show. And

21:21

it is on podcasts, on YouTube,

21:24

on radio, on SiriusXM, it's

21:26

all over the place. So make sure to listen and follow

21:28

you on all socials at Dave

21:30

Ramsey, and you're

21:33

on TikTok,

21:33

Instagram, Facebook,

21:36

you're on all of it. Pretty great,

21:38

so good. Thanks for coming on.

21:44

Hey guys, it's Rachel. If healthcare costs

21:46

are increasing while your available choices

21:48

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Ministries. CHM is a biblically

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insurance. Find out more at... Thank

22:00

you to ramsay, he's the

22:02

three bully kuntz brothers. Especially when you ask him to money

22:04

for them to buy you and he never has. He's

22:07

not a person that's afraid of being money cut. Remember

22:10

that in the book there are so many examples where he Аmesh applies the

22:12

eclipse, man hexed

22:14

the dominion, he rediscovered teethier Yoshitsune in

22:18

order to put holy spirit back against

22:22

you like he did. And he's

22:24

the that suggest that man you've got to get the

22:26

legend of monsieur of marley by other than Hito

22:28

of subscribing until you reach a certain

22:31

financial milestone, which you are

22:33

an everyday millionaire. So until that point,

22:36

use cars, it's the way to go. And

22:38

we get a lot of flack for this, but listen,

22:40

we are confident in our advice. We

22:42

really do believe no debt is the best

22:44

way to go even with a car. So

22:46

I'm always interested in hearing it someone else

22:48

out there and their perspective. So

22:51

I'm gonna go through their tips and

22:53

just share my thoughts along the way. All

22:55

right,

22:55

pops, we are going to run through things

22:57

that car dealers, salespeople, sales managers,

22:59

finance managers ask you when you're going through the process

23:02

of buying a car. And then we are going to demonstrate

23:04

the way that you should respond. The reason

23:06

we're doing this is because if I'm not mistaken, when you were a

23:08

sales manager, you did a lot of training with your salespeople.

23:11

Here are what you guys call them word tracks, right?

23:14

Yeah, that's what they're called. That's what they're called. Here are

23:16

the word tracks. Here are the things we say so that we can

23:18

put the customer in a position where we can either get them

23:20

to close, move them along in the deal. This

23:23

is when customers hear those word tracks, here are

23:25

your word tracks that you wrote for

23:27

us and Kimberly Klein, the F&I goddess

23:29

herself back at CarEdge.com. She wrote

23:31

on these cheat sheets. You ready to go? Yep. Do

23:34

you have a monthly budget in mind? You know, I

23:37

just have a total out the door price in mind.

23:39

So if it's okay with you, Zach,

23:42

I would just like to concentrate on

23:44

what the out the door numbers are going to be. And

23:46

let's run that back now if I'm a normal

23:48

customer who's not educated about what they're going into.

23:51

Hey, Ray, do you have a monthly budget in mind? Well,

23:54

yeah, yeah,

23:55

of course I do. And what is it? Oh, well,

23:58

you know, I don't want my payment.

23:59

to be more than, I don't know, say $700 a month.

24:03

Boom. What happens when as a customer, I said,

24:05

I don't want my payment to be more than $700 a month? Well,

24:08

they know how they can approach

24:11

the deal. They're just gonna talk

24:13

to you about monthly payments the whole time.

24:17

And a good salesperson is gonna save

24:19

you $700 up to, and

24:22

you're gonna go, I don't know, as long as it's not more

24:24

than $775. So

24:27

for every $25 you push yourself, that's

24:29

like another $1,000. You're

24:31

just thinking yourself into a whole versus, versus

24:34

asking the question or saying back to them, well,

24:37

I'm really just focused on the outdoor price. Yes. All

24:39

right, let's go to

24:40

the next one. Okay, so we'll pause there. So they talk about

24:42

knowing that what your monthly budget is,

24:44

which is great, but they're doing

24:47

it in reference, in retrospect, to

24:49

a payment. But I think that that's proved

24:51

the point, though, to know what your

24:53

budget is. And when you don't use debt,

24:55

you have to know your outdoor price.

24:58

Like you're like, I have this cash to buy a car. What's

25:01

within those price ranges, right? So that

25:03

way a dealer is not talking you up into

25:05

a nicer car that you can't afford. And when you have debt

25:07

in the picture, as you saw, it was so

25:09

easy to be like, yeah, at 700, but I mean, I guess like

25:11

some of the stuff, you wouldn't be terrible. Sure,

25:13

I don't definitely can't get to the, yeah, you start

25:15

negotiating with yourself. And then there's a salesperson

25:18

listening to all this, and you're gonna end up

25:20

walking away with a nicer car than what you even need or

25:22

what you can afford. But when you spend with

25:24

cash, you literally have a set amount. There's

25:26

a boundary there. They

25:28

can't talk you into a nicer car because you don't have the money for it.

25:30

Like this is what you have. So that's the power

25:33

in knowing what you have

25:35

and bring cash to the situation

25:38

because you can't have someone talk you up

25:40

in it because this is what it is. So interesting

25:43

play on words there that they kind of did. So I love

25:45

that. Okay, let's

25:46

keep going. Well, Ray, how much cash do you plan

25:49

on putting down? You know, I really haven't decided

25:51

that yet. And I won't until we establish what

25:53

an acceptable outdoor number is. So,

25:57

Jack, I'm telling you, we really have to work on

25:59

the outdoor number. and then we can start working

26:01

about the other aspects. All right, let's pause

26:03

here. Why is a salesperson do I care about how

26:05

much cash down is going if, especially

26:07

if I just got the customer and told me they want their monthly

26:09

payment to be no more than $775? Yeah,

26:13

I mean, between cash normally

26:16

equates the profit. The more cash you have

26:19

in a deal, the greater the likelihood that

26:21

the profit's gonna be bigger because if

26:24

ultimately you end up having as a salesperson

26:26

or a sales manager have to work on a payment,

26:29

well, typically it means you have to discount the car

26:32

in order to get to that payment.

26:34

Another way to lower the monthly payment is

26:37

to get cash from the customer and you don't really

26:39

have to discount the car as much. So

26:42

the dealership's always gonna want you to focus

26:44

on what the monthly payment is. You're

26:47

always going to want to focus on what

26:49

the out the door number is and you

26:51

want to establish that before you start getting

26:53

into any type of conversation about

26:56

your monthly payment. Okay,

26:57

let's pause that, okay. Again,

26:59

this is the reason why

27:02

I hate debt because you're playing the bank's game,

27:04

you're playing the dealer's game, all of it. And

27:06

here's the deal to you guys, when you go in and you actually

27:08

have the money to pay for the car, they don't

27:10

like you at the dealership as much because they're

27:12

not making any money off you. I mean, with the

27:14

interest and everything else, they're getting a better

27:17

deal when you're going into debt for something. So

27:19

immediately when you say, yeah, I just have all cash,

27:22

this is it, it's kind of like, oh man, we're

27:24

not gonna make as much. So just get ready for

27:26

that feeling,

27:27

that's real. Okay, so I'm the

27:29

salesperson. Yes. Ray, what are you gonna do with

27:31

that car you drove here? You planning on trading that in? You

27:33

know, I haven't really decided what I'm

27:35

gonna do with it yet. What

27:37

I'd really like to concentrate on Zach is

27:39

that out the door number, once we

27:42

established an out the door number, then we

27:44

can have a conversation about whether I'm gonna

27:46

trade a vehicle or whether I'm just gonna

27:48

sell the vehicle privately to someone

27:50

else. All right, exactly. Two separate

27:52

transactions, we just did another video talking about how

27:54

you have to treat these as two separate transactions.

27:57

Okay, so those were three examples from the sales side.

27:59

Okay, so pause there. I love

28:02

this advice. That's so

28:04

interesting looking at it two separate transactions,

28:07

because it is so easy. Just be like, well, I'll just trade it in. And

28:09

it feels good because you're like, oh yeah, that's gonna cost $7,000

28:13

off the price of my car. When in fact

28:15

you could get a whole lot more as for an individual

28:17

buyer doing it completely on your own.

28:20

So doing that research and seeing it as two

28:22

completely separate transactions thing is so smart.

28:24

It's really wise. I love that piece of advice.

28:27

Now, dad, let's say we've gotten past that. Now I'm talking

28:29

to the finance manager. You're gonna hear some things like this.

28:31

I'm the finance manager, you're the customer. Yes. Well,

28:34

Ray, I assume you've given some thoughts to your monthly

28:36

payment. I know you worked the deal with Joe

28:38

out on the showroom and everything makes sense. Do

28:40

you have a sense for where you want

28:42

that loan term to be and what you're comfortable

28:45

with? I have

28:47

indeed given quite a bit of thought and I've gotten

28:50

the pre-approval from my credit union

28:52

down the street. So I really

28:55

have a complete understanding as to, A,

28:57

where my payment should fall and B,

29:00

what my term should be in order to keep my payment

29:02

where I'd like to have it. That is a perfect way to

29:04

respond. You're already, you're taking control with

29:06

saying, hey, I actually, I'm informed. I know what

29:08

I got approved for versus, well, I haven't

29:11

really thought about the loan term. Like actually,

29:13

could you make my payment go even lower? Sure.

29:16

Sure I could make your payment go even lower but maybe

29:18

it's gonna extend the term. All right, what about

29:20

that? Some of those other products like extended warranties

29:22

and things like that. The finance manager

29:24

will typically pull out a menu. We have all

29:27

sorts of examples of this. Kimberly has

29:29

done an incredible job. We've got fake menus,

29:31

faux menus. So what do you do

29:33

when the finance manager brings out that menu

29:36

and puts it in front of you either digitally or physically and

29:38

it shows all your various options for how you can protect

29:40

this brand new car. It's only gonna increase your monthly

29:42

payment $10 a month, $50 a month, whatever the heck

29:44

it is. How do you respond to that? Can

29:46

I see a breakdown of what each one of these items

29:49

is costing me? I'm not as

29:51

concerned about the monthly payment per

29:53

se as I am and what the actual

29:56

charge for this item is. Yeah, and

29:58

you need to also ask for things like your... So remind

30:00

me, hey, what was that actual payment that I

30:03

was at without any of these products added on? And

30:05

then please, everyone recognize that when you

30:07

add those products on, you finance them, you are financing them,

30:09

you're paying interest. Oh,

30:12

absolutely. Yes. That's why it's good to ask for

30:14

what's the actual price because then it helps you rationalize

30:16

whether or not you're money on. Yeah, and it

30:18

helps you rationalize whether or not the

30:21

price is equal to or greater than its value. Exactly.

30:26

Okay, so

30:26

pause that. Always remember this, you guys, when you're using

30:28

debt, it is so much easier

30:30

to add things on, whether it's another

30:32

sweater when you're shopping online

30:35

or at a restaurant, adding in another appetizer, like whatever

30:37

the situation is, whenever you're using debt, statistically

30:40

speaking, you're going to just naturally spend more because

30:42

the emotion is not there. And that includes

30:45

when you're buying a car. So, you know, they

30:47

use the example, yeah, well, let me see the breakdown of each

30:49

of these warranties, which is a great question to ask, even

30:51

if you're a cash buyer, like, hey, you know,

30:54

what are the options and what are the prices of all these

30:56

things on this menu? But also

30:58

when you're using debt, it's like, oh, yeah, 10 extra bucks

31:01

on my payment, no big deal. But

31:03

when you're paying for everything upfront, you're thinking twice

31:05

about it all and what's really worth and what's not. So

31:08

that's the power of using cash, you guys. Makes you think

31:10

through all your purchases, even some add-ons like this. All right,

31:12

so overall, I agree about

31:15

doing your research and having an intentional plan

31:18

when you're buying a car, all of

31:20

that. When they were talking about that, I totally

31:22

get that knowing your budget,

31:25

knowing where your limit is, even though they

31:27

introduced debt into it, but look,

31:29

all of that, that power on your end is

31:32

so key. And remember, you're the one in charge.

31:35

And that's what kind of they kept saying, which I think is great, is

31:37

put the power back in your hands, not

31:39

in the dealership or the salesman's hands. So I think that

31:41

is a great perspective to have. But

31:44

obviously, I disagree with all the financing

31:46

stuff as they were talking. And in fact,

31:49

it confirmed more with me of why I believe

31:51

what I believe, because you guys not

31:53

only debt and spending $700

31:55

a month on a car loan versus

31:58

investing that money, that money for

32:00

your future and buy a car that you can

32:02

afford, even if it's not a great car, it may not be a $50,000 car,

32:05

maybe a $5,000 car. But just

32:07

the idea that you own your stuff is

32:10

so key and you're not dealing with the finance department

32:12

or going to the credit union, see what your interest rate

32:14

is or the prepayment penalties, like all

32:17

of that stuff is not even a thing. You don't have to worry

32:19

about any of that. You have your budget,

32:21

you know what money you have to spend on a car

32:24

and that's what you're gonna pay. And there's something so empowering

32:26

about that because you walk away from the dealership

32:29

with your car and that's it. Now it was

32:31

a $700 payment dragging behind that car every single

32:33

month for years. So it's powerful

32:35

for you guys, save up, pay for

32:38

your cars with cash. It is a depreciating

32:41

asset. It is going down in value every

32:43

single day. So you're

32:45

spending money on interest, paying extra on this

32:47

car that you're not gonna be able to sell. It's gonna be

32:49

a fourth of what it costs when you bought it. So

32:52

it's not a wise investment to take that out on a car,

32:55

pay cash for your cars. So if you're wondering

32:58

whether or not you are ready to buy a car or

33:01

how to go about owning and maintaining a

33:03

car the smart way, make sure to check out our Ramsey

33:05

Car Guide. I will put a link in the description

33:08

for you guys. So make sure to send this video to a

33:10

friend who may need help negotiating

33:12

when it comes to buying her next car without

33:15

debt. No debt

33:16

here, all cash.

33:21

This episode is sponsored by BetterHelp.

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rachelcruze, c-r-u-z-e. Today,

34:26

I'm

34:28

going to answer a question that I get all the time. Is

34:30

it really possible to travel for free

34:33

using points? So if you don't already

34:35

know, I've never

34:36

had a credit card, never

34:37

will. And I know a lot of people have

34:40

very strong feelings about this. And honestly, you

34:42

guys, I'm just at this place where I don't

34:44

really care anymore. Like, I don't mean to be rude

34:47

or dismissive, but listen, at a certain point, I

34:49

feel so confident in my money beliefs

34:51

and my decisions around money that it

34:53

just stopped bugging me when people disagreed

34:56

with me. So I'm like, great, you do you. But

34:58

here's how I think is the wisest best

35:00

way to live with your money. And I can't control

35:02

the financial choices of all of you out there.

35:05

And I don't want to. So my job is

35:07

to show up and teach you what I have learned

35:10

and what I believe is the smartest way when

35:12

it comes to handling money and the way

35:14

that's really been proven over 30 years here

35:16

at Ramsey Solutions using these principles.

35:19

Now, the main goal of this show is to show you

35:21

that it is possible to choose something different

35:23

than what credit card companies or airline

35:26

companies are trying to sell you. So that's what

35:28

we're going to do today. So let's talk about leveraging

35:30

points for discounts on travel and

35:33

if it's actually worth the headache. So

35:35

back in September, there was a lot of talk around Delta Airlines,

35:38

making it more difficult for customers to earn

35:40

elite status with their points. So

35:42

obviously, this is a huge bummer for people that are frequent

35:44

flyers. It caused a lot of anger

35:47

and disappointment for people that have been in the system

35:49

and relying on it. And they change it and

35:52

then they're like, oh my gosh, what is going on? So apparently

35:54

the changes that were made would require customers

35:56

to spend significantly more money

35:59

in order to earn.

35:59

at these points.

36:01

So I don't want to be the bearer of bad news,

36:03

but this is always going to

36:05

be the problem with any systems when it comes to rewards

36:08

or miles or points. So at the end of the day,

36:10

the massive corporate companies are always

36:12

going to be concerned about the bottom line, which means

36:14

they don't really care if you go into debt as long

36:17

as they profit off of those increases.

36:19

And it can be kind of deceiving

36:22

because you think, you know, in some of these commercials or

36:24

Instagram ads can feel like, oh yeah, we're on your

36:26

team. We want you to see the world. Go see

36:28

those pyramids in Egypt. You go, you go.

36:31

And you're like, Oh my gosh, American airlines

36:33

is like supporting my lifelong dream for traveling

36:36

the world. No hate

36:38

to break it to you, but airline and credit card

36:40

execs. Yeah. I care 0% about

36:42

your dreams. So that allows can grooves. They're there

36:44

to make money. They want you to spend more and

36:46

more money so that you can get a little perk.

36:49

And they're trying to convince you that playing the game is

36:51

worth it. And I'm not going to lie. I fully

36:53

believe that there are people out there who feel

36:55

like playing this game, that

36:57

they are winning at it and they're successful

36:59

at it. But I also believe that for majority of

37:01

people, it's not worth the risk.

37:03

So for me personally, I don't

37:05

think it's worth the brain power to play the whole

37:08

travel points game because having to plan

37:10

and scheme about when to register

37:12

for this limited promotional deal

37:14

or which credit card I can use

37:17

for food versus the ones I use for entertainment.

37:19

So I get these two extra points. It's all confusing

37:21

and it takes a lot of time and a lot of

37:24

energy. One of my coworkers has a friend who

37:26

works for a points influencer.

37:28

And she confessed recently that she has 18

37:31

credit cards in her wallets. 18

37:34

credit cards. Money was never meant to be this complicated

37:36

you guys. And I would rather make wise financial

37:39

decisions all the time so that my family

37:41

has a firm foundation to stand

37:43

on financially. And that's where we plan our

37:45

travel is from that, not from all these points

37:47

and this credit card game. So why not actually

37:50

be able to afford all the things you want

37:52

by the money that you have and

37:54

something else that I find interesting is how many

37:56

people have come to the same conclusion

37:59

completely on their own. Because listen, it's just

38:01

common sense. And at Ramsey, we're known for rejecting

38:03

debt and challenging the credit card industry. But

38:06

the other day, someone on our team was saying that

38:08

she had never had a credit card and not because she followed

38:10

Ramsey for years or was intentionally

38:12

taught about these principles of avoiding debt, but because

38:15

it always just seemed like too much paperwork, right?

38:17

It just seemed too complicated. Can I get an amen? So

38:20

if more people made smarter financial decisions from

38:22

the start so that debt never even

38:24

felt like a need or an option, that is

38:26

the best way, you guys. That's the best way. And

38:28

that is my hope for you, that when

38:30

it comes to a peaceful way of living with

38:32

your life, it's all on your terms. There's

38:35

autonomy. That is the best. So

38:37

let's talk about some smart ways to manage

38:39

your monies that you can reach your travel goals.

38:42

So when you're looking at your overall money

38:44

picture, getting out of debt is one of the

38:46

number one goals I want you to have. And

38:48

this is before travel, this is before anything. It's

38:51

getting completely debt free. Because when you don't have debt,

38:53

you have your income. And instead of your income coming in

38:55

and going back out 18 different directions

38:57

to 18 different credit cards, it's hard to

38:59

use the money for things that you want. So that income

39:02

being back in your power is

39:04

huge. So getting out of debt is big.

39:07

Also being able to save up the things you want. So

39:09

this is like a sinking fund. So if you do have

39:12

a trip you want to take, then be saving

39:14

for it a little bit at a time. Winston

39:16

and I have two big trips coming up. And that's what

39:18

we do. We're like, yeah, we knew that we had

39:21

one in November and one in December. And so we started

39:23

planning and saying, okay, we're gonna just put some money away for

39:25

these so that when the time comes to put the deposit

39:27

down on the hotel, you don't have to buy the flights,

39:30

the money's there and it's

39:31

great. So sinking funds are awesome. And

39:33

also budgeting helps you with that. If you've not checked

39:35

out every dollar or budgeting app,

39:37

make sure to do that because when you plan month

39:39

to month and look in the future, you have

39:41

things under control. Now listen, there

39:44

are some loyalty award systems

39:46

when it comes to airlines and all

39:48

of this. And some of that is great, right?

39:50

Southwest Rapid Rewards, it's awesome. And

39:52

we use those perks and it's

39:55

great. Also, the Target debit card,

39:57

when I go to Target, I use that and I swipe

39:59

the debit card. credit card, money comes out of my account. But

40:01

here I am using my own money and that's the

40:03

key you guys. When you sit there and play this

40:06

game back and forth with the credit card

40:08

companies, and if you don't

40:10

pay your bill, there's interest on top of that. It's

40:12

all of this is where it gets murky.

40:14

But when it's just you and your money, and

40:17

then you can benefit from that, that's great. Don't

40:19

be benefiting from money that's not yours. So listen,

40:21

it can be done. You can have a great life and travel

40:24

and enjoy your life with a lot of peace

40:26

and actually afford your life by cash

40:29

flowing, things like travel and all

40:31

of it without having to play this point system

40:33

game. And so for me, I would rather

40:35

pay for things in full and not have a bill at the

40:37

end of the month that I'm having to pay for just

40:39

to get those extra points. So if you're ready to break

40:42

up with dad and credit cards once and

40:44

for all, you can learn exactly how

40:46

to do that through Financial Peace University. So

40:48

make sure to check it out at ramsaysolutions.com

40:51

and there you can enroll in an FPU personal

40:53

finance course and add tons of helpful

40:55

resources for you every step of

40:57

the way. Oh, travel hacking.

41:00

I mean, sometimes

41:02

it takes a lot of work to make it work. But hey,

41:05

we all love to travel, don't we? Okay,

41:07

you guys, thanks so much for listening to this episode. And

41:09

thanks to my dad, Dave Ramsey, for being a

41:11

guest on today. And

41:14

thank you guys so much for sending this episode

41:16

out to all your friends because it is helping us so

41:18

much get this podcast in front of people who may

41:20

not know that it's out there. Because

41:23

let's be honest, we want to help America

41:25

take control of their money. And the best way is

41:27

to get this podcast in the rhythm of people's lives.

41:29

So thank you guys so, so much. All

41:32

right, you guys remember to take control of

41:34

your money and create a life you love.