Stop Paying Debt To Buy An RV To Live In?

Summary

Summary of "Stop Paying Debt To Buy An RV To Live In?" Episode of The Ramsey Show Highlights

Release Date: June 12, 2025

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Introduction

In this episode of The Ramsey Show Highlights, Rachel seeks advice on whether she should divert funds from debt repayment to purchase an RV for her family's living situation. Hosted by the Ramsey Network, the discussion features insights from experts Ken Coleman and Jade Warshaw, alongside contributions from fellow host Rachel.

Rachel's Dilemma: Balancing Debt and Housing

Rachel begins by outlining her current predicament:

Rachel ([00:10]): "So my question is, should I pull out of my savings or stop paying towards my debt in order to buy an RV for me, my husband, my one year old, and our two dogs to live in?"

She explains that her family's home flooded in 2023, forcing them to live in her parents' RV temporarily. As her parents prepare to sell their RV to generate extra income, Rachel contemplates purchasing their own RV to free her parents from this arrangement.

Rachel ([00:34]): "My parents are both retired and they're wanting extra money. And so I just feel like us moving out of this $40,000 RV would be very beneficial to them."

Despite saving some money and reducing debt while living in the RV, Rachel is uncertain about the feasibility of buying another RV given her limited savings and substantial debt.

Expert Analysis: Ken Coleman and Jade Warshaw Weigh In

Ken Coleman and Jade Warshaw critically analyze Rachel's situation, emphasizing the importance of not compromising debt repayment for purchasing an RV.

Jade ([03:00]): "No, you should not stop paying down your debt to buy an RV. You have no idea what the RV is going to cost. You only have $2,500 in savings. You're more than $40,000 in debt..."

Ken underscores the necessity of including all debts, including student loans, in financial planning to avoid exacerbating financial strain.

Ken ([02:28]): "So you said you've got... And you've got to consider the time frame too. So you said you've got $40,000 of debt... And what is the timeframe that you're thinking?"

Financial Breakdown: Assessing Monthly Income and Expenses

The discussion shifts to a detailed analysis of Rachel and her husband's income:

Rachel ([05:02]): "So he gets paid every other week. His are about $700. So he brings home about 1400. And I bring home... I bring home 1,800 every two weeks."

Ken calculates their combined monthly income to be approximately $5,000, advising that no more than 25% of this income ($1,250) should be allocated to rent.

Ken ([05:21]): "So you guys have 5,000 bucks a month, and you've got 25% of that that you can spend on rent. So you've got 1250 bucks that you can spend every single month on rent."

Strategic Recommendations: Prioritizing Debt and Sustainable Living

Jade and Ken recommend against purchasing an RV at this stage. Instead, they advise renting a more affordable space closer to Rachel's husband's job to reduce transportation costs and stress.

Jade ([03:11]): "Because if you go beyond that, it's going to be really tough, Rachel, for you guys to make headway on your debt."

Furthermore, they suggest that Rachel's husband explore additional employment opportunities to increase household income, which is crucial for accelerating debt repayment.

Jade ([07:22]): "He needs to press pause on pursuing a degree because you guys can't afford it and you're taking a loan out without a path to doing marine biology work."

Conclusion: Focusing on Financial Stability Over Immediate Comfort

The experts unanimously advise Rachel to continue prioritizing debt repayment and seek a sustainable living arrangement through renting rather than purchasing an RV. Emphasizing long-term financial health, they encourage Rachel to stabilize her income and reduce debt before considering significant expenditures like buying an RV.

Ken ([08:18]): "But, Ken, I think you're exactly right. There's a lot going on. And if they can just focus in one direction, a clear direction, where there is a path forward to your point, you need to go that direction."

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Key Takeaways:

• Prioritize Debt Repayment: Avoid diverting funds from debt to large purchases.
• Budget Wisely: Allocate no more than 25% of income to housing expenses.
• Increase Income: Explore opportunities for additional employment to boost household income.
• Sustainable Living: Opt for renting over buying expensive living solutions like an RV when in debt.
• Plan for the Future: Ensure financial stability before making significant lifestyle changes.

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This summary encapsulates the critical discussions and expert advice provided in the episode, offering valuable guidance for individuals facing similar financial dilemmas.

Transcript

[Dave Ramsey]

Brought to you by Y Refi Refinance your defaulted private student loans [e-mail] Ramsey.

[Rachel]

So my question is, should I pull out of my savings or stop paying towards my debt in order to buy an RV for me, my husband, my one year old, and our two dogs to live in?

[Jade]

Why do we want to live in an RV?

[Rachel]

So my parents, our home flooded in 2023.

[Jade]

Oh, no.

[Rachel]

My husband and I, we had a two month. Well, we had a baby baby and we needed a place to go. So my parents had just finished building their house and while they were building their house, they lived in an rv and so they had an RV for us to live in, so we moved into there. Now my parents are both retired and they're wanting extra money. And so I just feel like us moving out of this $40,000 RV would be very beneficial to them. Now, while we're living in this rv, we've been able to save and pay off some of our debt.

[Ken]

Okay.

[Rachel]

And so we want to continue doing that. We're not really ready to go and rent again. So we've discussed with my parents maybe us buying our own RV and giving theirs back, letting them be able to sell theirs. Yes.

[Jade]

What would the cost of the RV be that you guys are thinking about buying?

[Rachel]

Well, so I'm not really sure. We have $2,500 in savings, which isn't a lot. And we still have $40,000 in debt. We. We're paying off our debt, so our savings isn't going up much. So I'm just kind of stuck on. Do I ask my parents for us to continue staying there? I'll be honest. My dogs are kind of tearing up their rv, so if I could get us out of there sooner than later, that would be my.

[Jade]

Why aren't you ready to rent? That was the statement you made. We're not ready to rent.

[Ken]

Yeah. Is it the cost?

[Rachel]

Yeah, we're just really proud of our progress on paying off our debt.

[Ken]

Yes.

[Jade]

But we are too.

[Ken]

You got to run the numbers on both sides to see if this is going to work. So you said you've got. And you've got to consider the time frame too. So you said you've got $40,000 of debt. How much do you have to put onto that debt to clear it in the timeframe that you're thinking? And what is the timeframe that you're thinking?

[Rachel]

Well, at the rate we're going, so some of it's school loans, so we're kind of leaving that out.

[Ken]

But no, don't leave that out. That's. That's the one you want to get. Listen, Sallie Mae stops for no one, so don't leave that out. That's part of the debt snowball.

[Rachel]

Yes. As far as my timeline, I'm kind of leaving that out. We have my husband.

[Ken]

No. And I'm telling you straight up, don't leave it out. Rachel.

[Rachel]

Leave it out.

[Ken]

No, man. Okay?

[Jade]

And you know what? You know what?

[Rachel]

It's. It's still occurring. He still has two years left of school, so.

[Ken]

And you're still taking debt for it. So you're still actively going into debt.

[Rachel]

There's still loans coming from it. So here's the loans on it.

[Jade]

All right, Rachel, I've. I've been very, very patient. We're having the wrong conversation, so I'm going to answer the. That you asked. Okay? No, you should not stop paying down your debt to buy an rv. You have no idea what the RV is going to cost. You only have $2,500 in savings. You're more than $40,000 in debt, and you're presenting to us as though you can't even afford to pay rent. Which isn't true. Which is where I want to focus our conversation. The bottom line is, is your dogs are tearing up your parents rv. You guys have outstage your welcome. They need the money. So what I want to ask is what does your husband and you, what's your bring home income, Both of you? Because I want to come up with, with Jade, how much you can actually afford in rent? Because that's what you need to be doing is going and renting and then taking your time and going as fast as you can go on paying off the debt. But buying an rv, you don't have the money.

[Ken]

Were you going to sell something to get this or what was your thought?

[Rachel]

No, we were going to finance it.

[Jade]

I know what you were going to do. No, because I. Because you don't have any money. So therefore you were going to justify getting an rv, which, if you really want to get our blood pressure high, is when people ask us about buying RVs because it's a complete and total waste of money. So let's go to tell Jade what your take home income is so that she can help you figure this rent out.

[Rachel]

Yeah, so I bring home 70,000 and my husband brings home about. I don't know, he makes. He makes $11 an hour. And this is a newer job because he had to change jobs so he could be close to daycare.

[Ken]

Tell me Every month. Tell me every month how much money you guys see in your paychecks? That's an easier question.

[Rachel]

So he gets paid every other week. His are about $700. So he brings home about 1400. And I bring home. Well, I have our insurance and I have, you know, 401k. I bring home 1,800 every two weeks. So what is that, 32?

[Ken]

Uhhuh. Okay.

[Rachel]

Yeah.

[Ken]

So you guys have 5,000 bucks a month, and you've got 25% of that that you can spend on rent. So you've got 1250 bucks that you can spend every single month on rent. So that's your starting spot. Now you go. I almost said look in the paper or look in the yellow pages. I don't know what hit me. But you go and you find.

[Jade]

Yeah, let's explain what that is to some people.

[Ken]

People don't know how old I am.

[Jade]

I know.

[Ken]

You go and find an apartment or something, a rental townhouse that you guys can stay in that'll take your dogs, and that's 1250. That is the barrier. Because if you go beyond that, it's going to be really tough, Rachel, for you guys to make headway on your debt. Is your husband.

[Jade]

Yes. So there's your number. 1250 years, your max ratio, maximum. Okay, now I want to know if Hubs is working another job or two or open to working another job or two, because $11 an hour. He's capable of bringing in more money and he needs to be, especially when we're paying off debt. What's the story?

[Rachel]

Yeah, so we moved to a smaller town when we moved in with my parents. And so we were looking for a job for him that's close to my SO daycare because I have to travel over 60 miles for work.

[Jade]

Oh, I got a great idea. Why don't we move closer to your job now?

[Ken]

You don't have to be.

[Jade]

Oh, and by the way, it's probably closer to civilization, I'm gathering, which means there's better jobs.

[Ken]

When will he be eligible? It sounded like he was still in school because he's accruing loans. Is that right?

[Rachel]

Yes. Yeah. He's doing online for what?

[Ken]

So when will he make more?

[Rachel]

Well, his degree is in marine biology, so.

[Jade]

In Texas.

[Ken]

George Costanza. All right, all right. So is there a pathway that he's going to make that money to get.

[Jade]

Him near the marine biology?

[Ken]

Does he know the pathway for that?

[Rachel]

He has no pathway. No.

[Ken]

Okay.

[Rachel]

He doesn't know the pathway.

[Jade]

He needs to pause on school. You all need to move and get to a better place where you're not driving as far as you're driving with a little one. That's adding a lot of stress to your life. It's going to be a better job market for him because it's near civilization or in the middle of civilization, and he needs to be making $20 or more an hour, period, End of story. I don't care what he's doing. And yes, he needs to press pause on pursuing a degree because you guys can't afford it and you're taking a loan out without a path to doing marine biology work. Now, I'm not saying he. I'm not in any way crapping on the dream or trying to be tough guy or get off my lawn guy, but right now, where there is no path, we shouldn't be doing something. And so let's press pause. The marine biology degree will always be there, but you all need to get your income up and change your lifestyle.

[Ken]

That's.

[Jade]

Yeah, sorry. I know that's not fun to hear.

[Ken]

It's not. But, Ken, I think you're exactly right. There's a lot going on. And if they can just focus in one direction, a clear direction, where there is a path forward to your point, you need to go that direction. And so 1250 bucks a month in a rental that gets you closer to your job and allows him to find work as he pauses education for the time being until he finds a clear path forward.

[Dave Ramsey]

Why refi Refinances delinquent private student loans for struggling borrowers. Learn more at yref y. Com Ramsay.