She Doesn't Want to Sell

Kelly's wife is making an odd distinction between their debts.

QUESTION: Kelly in North Carolina and his wife are working on their debt snowball. They earn $140,000 a year and are almost out of debt, but have two car payments. She wants to get rid of their credit card debt, but is fine with having a car payment. That doesn't make sense to Dave, who digs a little deeper to find the issue here.

Dave's ANSWER: This car payment and credit card debt are the same things–both debt payments and both with interest. The only difference is that one of them is attached to a car and one is not. Why don't you just say that you like Visa but not MasterCard? That's about as logical.

If she has a hang-up about car depreciation and throwing money away there, that’s what you are doing. You are buying something that goes down in value, but that’s not because you borrowed money on it or didn’t borrow money on it. A $20,000 car still becomes worth $5,000 in just a matter of years whether you have debt on it or not. A car payment doesn’t keep the car from depreciating.

You are attempting to say that she’s presenting something that’s logical and there is not anything logical in this entire discussion. This is about her not giving a rip about getting out of debt. You’ve gotten all fired up about this and attacked this debt, and you’ve left her behind. She’s not on the program. The problem is not the car.