Highlights from the Dave Ramsey Show

Question: Lori on Twitter asks what Dave thinks of layaway with no fees. Dave says it's not bad, but why not save your money. Cash is better.

Answer: It's okay. Layaway is when you set a product aside, pay on it a little bit every week until it's paid off, and then you pick it up. They hold it behind the counter for you.

I kind of prefer that you just save the money and buy the item. What would be wrong with that? Then you could have the option of doing other stuff with your money, and you would not be halfway into a bicycle or television. Why not just save up your money?

If someone argues that it's on sale, it usually is, one way or the other. You can find deals on things, and when you're walking around with cash in your pocket, you sometimes make different choices.

Layaway is basically a savings account that doesn't pay interest and it traps you into using the savings for only one thing. It's not bad, but it's just not good. Cash is better–you having the personal discipline to set that same amount aside each week or every month until you have enough set aside to buy something. One definition of maturity is learning to delay pleasure.

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Question: William on Twitter asks how you make a decision to sell collectible memorabilia when you're getting out of debt. Dave explains that there's a spectrum of emotions to consider.

Answer: There's a spectrum on collectible memorabilia of emotional involvement. "I have a Mickey Mantle card that I got when I was 8, and my dad stood there with me and got it signed." If that's you, then you would not sell that card. That has a personal story having to do with your dad. You met Mickey Mantle—all that kind of stuff. "I bought a Mickey Mantle card four years ago. It's gone up in value. Should I sell it?" That kind of a thing, then yeah, probably. That's a hobby. But something that has sentimental value in the collectible memorabilia area, you would keep that because that is a one-of-a-kind. It's like you don't sell your engagement ring to get out of debt—unless the engagement broke off. You just don't do that because you get one of those. You don't get a second shot at that. If it has a real heavy emotional involvement, I would keep it. If it doesn't, if it's just stuff ...

I know one time I was sitting and talking to this military guy—he was debt-free—about his wife and how proud she was of him. I'll never forget him. In Financial Peace University, I'm sitting there one night in the small group discussion, and this great big guy—I mean he's totally muscle bound, totally ripped and probably 220 pounds—drives a 4-wheel-drive truck, has got cowboy boots. This guy's a manly man. He's sitting there, and he finally gets that they need to get out of debt, and he turns to his wife, and he says, "Well, I'll sell the knives." I didn't know what that meant. He's going to sell the knives? What? Come to find out, this guy had an unbelievable—like $25,000—collection of knives, and it was just a hobby. He'd just built them up over time. It was really probably very few of them that had sentimental value to them. She broke down and started crying that her husband would put his family and his wife ahead of his personal hobby that did mean a lot to him, by the way.

"I'll sell the..." You fill in the blank to get us out of debt. It really did mean a lot to him, but it wasn't something his grandfather gave him. It wasn't something like that. It was just a collection that he had built over time that he enjoyed doing. The fact that she sat there and witnessed her husband putting her and her children and their future ahead of his selfish desires—it broke her. I've never seen a woman change the way she looked at her husband so quickly. It was pretty amazing.

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Question: Jay in Raleigh wants to know how Dave feels about using a layaway program.

Dave Ramsey's advice: There's nothing wrong with just saving up and buying stuff when you have the money to buy it. That's not a bad plan. I'm not a huge fan of layaway. It's not like it solves some big problem or something. In the rare instance that you have a particular thing that is on sale or whatever and you can take advantage of it and you don't have the cash, you set it aside on layaway, that's fine. I would not do layaway that has fees. You might as well borrow the money if you're doing that.

A lot of these stores are bringing back layaway to try to stimulate sales, and they're doing it with no fees. The reality is retail is just down, and they're doing anything they can to stimulate retail. People are just kind of getting disgusted with credit cards. They're not willing to charge anymore, and yet they still see that thing they want, and the retailer's trying to move the product line.

If it's a non-fee layaway and if it's a rare instance, I don't have a problem with it. If you don't have the money, a good rule of thumb is you can't afford it. Just don't get in the habit of lusting for things that you don't own, because that lack of contentment is always tied to people being broke. In general, I'm not a big fan, but on the rare occasion without a fee, then I wouldn't have a problem with it. I would never pay a fee for it, and I wouldn't want to make it a habit—a way of life—because then you just stay chained to this layaway program just like you'd be chained to debt.

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