Dear Dave,

My wife and I are following your plan, and we’re in the middle of the Baby Steps. Do we have to wait until Baby Step 7 to buy a new car?

ALAN

Dear Alan,

No, you don’t have to drive a beater until you pay off your house. My advice is to drive the minimum car you can until you get past the first three steps. Remember, Baby Step 1 is a beginner emergency fund of $1,000. Baby Step 2 is paying off all debt except for your house, then Baby Step 3 is fully funding your emergency fund with three to six months of expenses.

Once you’ve done all that, then you can move up to a nice car. I didn’t say move up to a new car. I want you to save up cash and get a really nice, barely used car. I never advise buying a brand-new car unless you have a net worth of at least $1 million. At that point, you’ve got enough assets in place to where you won’t even feel the massive hit in depreciation that comes with buying a new vehicle.

But until then, drive good used cars. That’s what the typical millionaire did, and I want you to model your financial behaviour after people who are in the position you want to be in some day.

—DAVE

Dave Ramsey is America’s trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books. The Dave Ramsey Show is heard by more than 11 million listeners each week on more than 550 radio stations and digital outlets. Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.