"You really can't. The car is stupid, and so was the vacation. You gotta start calling stuff what it is."
"But you have the credit card debt. The conditional does not exist. The full picture does."
"Selling it does not wipe the loan clean, but it removes the payment and frees up cash flow immediately."
"The real gain is the gap between a $2,000 car and a $27,000 car. That $25,000 in freed equity becomes the first debt snowball payment."
D called into The Ramsey Show with $123,000 in debt, including a $40,000 HELOC, a $28,000 car loan, and $54,000 in credit card debt. Dave Ramsey emphasized the need for a reality check, urging her to sell her $27,000 car and buy a $2,000 one. This would free up $25,000 in equity and allow her to stop credit card payments for two months, creating a debt snowball effect to tackle her high-interest credit card debt more effectively.
Read at 24/7 Wall St.
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