This Kid’s a Planner!

A "For Rent" sign is seen on a building Hollywood, Calif., on May 11, 2016. (Robyn Beck/AFP/Getty Images)

Dear Dave,

What would be your advice for someone who is renting an apartment but has never rented before? I’m 16, and I’m trying to create a plan for when I get out on my own in a couple of years. I’ve never had any debt, and don’t have a credit score. Is it going to be hard to find a place to live?

Riley

Dear Riley,

I get where you’re coming from. A lot of people believe it’s hard to get an apartment without a credit score, and that’s just not the case. In most cases, if you’ve got money for a deposit and proof of employment, you can find a little apartment somewhere.

Anytime you’re renting, it should be because you’re in a stage of your life where you’re not going to be in the area long, you’re saving money to buy a home, or you’re working your way out from under a lot of debt. Think of it as “rent patience.” Renting should be a temporary stop along the road, not a way of life. You’re parked and you’re on hold until you’re ready for a house or you get your finances in order.

I don’t hate apartments, and renting isn’t evil. But renting for a decade or two is not a smart move. How much do you want to pay for patience? The least amount possible. You want something clean and safe, but nothing too fancy. You don’t need a racquetball court, skylight, or hot tub.

I love that you’re a planner, Riley. Keep looking ahead and thinking toward the future!

—Dave

Don’t Fall for It!

Dear Dave,

Could you explain why buying a new car at zero percent interest isn’t a good idea?

Raina

Dear Raina,

The only way you have a chance of getting zero percent interest on a new car is if you have perfect credit and pay full MSRP (manufacturer’s suggested retail price). But, if you walk onto a car lot with cash, and haggle with the salesperson a little bit, they’ll knock a bunch off the sticker price. If you can buy the car for less than the zero percent interest gimmick, how is that zero percent? See what I’m saying? The cash buyer pays less.

Besides, you shouldn’t even consider buying a brand new car, unless you’re debt-free and have $1 million or more in the bank. You lose a ton in value the second you drive a new car off the lot. How is that zero percent? A new car also loses about 60 percent of its value in the first four years after you buy it. How is that zero percent?

The whole zero percent interest gimmick tricks a lot of unsuspecting folks into buying something they don’t need and can’t afford!

—Dave

Dave Ramsey is CEO of Ramsey Solutions, host of The Dave Ramsey Show, and a best-selling author, including “The Total Money Makeover.” Follow Dave at DaveRamsey.com and on Twitter @DaveRamsey.