Household Income Is $250,000, Is $35,000 Too Much To Spend On A New Car? The Ramsey Show Weighs In

When it comes to big purchases like a new car, even high earners can wrestle with whether they are spending too much. That was the case for Landon, a 27-year-old caller to “The Ramsey Show,” who recently bought a 2018 Mercedes S-Class for $35,000. Despite having a household income of $250,000 and a net worth of $750,000, Landon couldn't shake the feeling that he had made a mistake.

Does Spending $35K on a Car Make Financial Sense? Landon and his wife are in a strong financial position. They are in what Dave Ramsey refers to as “Baby Step 7,” meaning they have no debt, a paid-off home , and are focused on building wealth and giving generously. Despite that, Landon felt uneasy about sinking money into something that depreciates in value.



Don't Miss: 69% of Millionaires Never Earned A Six-Figure Salary – Here Are 2 Things They Do To Get Their First $1 Million, According To Dave Ramsey Are you rich? Here’s what Americans think you need to be considered wealthy. Ramsey show co-hosts George Kamel and Ken Coleman reassured Landon that his purchase was well within reasonable spending limits. A common rule of thumb on “The Ramsey Show” is that the total value of a household's vehicles should not exceed half of their annual income.

With $45,000 total tied up in vehicles and an income of $250,000, Landon is well under that threshold. "Dave would have said, ‘You should have bought a nicer car!’' Kamel remarked. "You’re not doing anything wrong.

" The Emotional Side of Money While Landon's concern appeared to be financial, Coleman and Kamel dug deeper and suggested that his discomfort stemmed from an emotional struggle rather than a financial misstep. They pointed out that he had spent years being financially aggressive—paying off his home and saving diligently—which made it difficult for him to shift into a mindset where he could enjoy some of his wealth. Trending: Many are surprised by Mark Cuban's advice for lotto winners: Cash or annuity? Coleman identified shame as a possible factor, explaining that some people feel guilty about spending money, even when they have more than enough.

Landon admitted that his financial discipline made it hard for him to relax when making large purchases. A Balanced Approach to Money Ramsey often emphasizes that financial success is about more than just saving—it's about balancing saving, spending, and giving. Kamel explained that if someone only saves and never spends, they can end up depriving themselves unnecessarily.

Ultimately, the hosts reassured Landon that he wasn't making an irresponsible decision. Kamel reminded him that as his investments continue to grow, his home will naturally make up a smaller percentage of his net worth over time. "You got another 30 to 40 years of working for ya and investing to build wealth," he said.

"And so, in the meantime, you have to do something called enjoying life." See Also: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.

How Much Should You Spend On A Car Given Your Income? If you're in a similar position—earning well, debt-free, and hesitant about spending—it's worth considering a few key points: Do the math: Ramsey's team advises that all vehicles in your household don't exceed half of your annual income. Check your emotions: If guilt or fear is driving your hesitation, ask yourself whether your concerns are based on real financial risks or ingrained habits. Find balance: A strong financial plan includes saving, spending, and giving in reasonable proportions.

For Landon, the verdict was clear: spending $35,000 on a car wasn't reckless—it was simply an adjustment to a new financial phase. And while the car will depreciate, the financial wisdom he's gained will last far longer Read Next: The average 401(k) balance soars to a record-breaking high – Here's how to know if your nest egg is keeping pace. Many are using retirement income calculators to check if they’re on pace — here’s a breakdown on what’s behind this formula.

© 2025 Benzinga.com. Benzinga does not provide investment advice.

All rights reserved..