Dear Dave,
Iím a senior in high school here in Arkansas, and I think I want to study business in college. Iíve gotten an unusual offer from a small, out-of-state school. It revolves around a $3,000 student loan program, where the loan converts to a scholarship if I maintain a grade point average of 3.3 or higher. Tuition at this college costs about $34,000 a year, so I was wondering what you think about the idea.
ó Garrett

Dear Garrett,
Iím glad youíre thinking about the future. But this is not my favorite idea, because you could end up with a loan.

In business, one of the things we look at is return on investment. If I can go to one place where tuition is $34,000 a year, but I could go to another place thatís in-state for about $7,000, the question becomes this: Am I going to get a five times better education ó or is my income going to be five times greater ó by going to the expensive school? I think most of us who have been walking around a while would say no.

Your income will not be based on where you went to school, and it wonít necessarily even be based on your grade point average. It will be based on your ability to take what you learned into the marketplace, kill something and drag it home. This has as much, if not more, to do with your initiative, your perseverance, character qualities and integrity as where you went to school.

One of the great jokes in America today is that where you go to school matters. Some places may have better programs in certain areas than others, but is this particular college ó which Iím guessing isnít a prestige school, since you didnít mention the name ó five times better than a solid in-state school like Arkansas State or the University of Arkansas? No, itís not.

I donít think youíre going to get a return on your investment overall in this picture, Garrett. Add to that this little student loan nuance, and the fact that theyíre not giving you enough ďfree moneyĒ to make this a good deal, I would have to say donít do it.
ó Dave

When to buy a better car?

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

Dear Alan,
No, you donít 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 youíve done all that, then you can move up to a nice car. I didnít say move up to a new car. I want you to save up cash a 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, youíve got enough assets in place to where you wonít even feel the massive hit in depreciation that comes with buying a new vehicle.

But until then, drive good used cars. Thatís what the typical millionaire did, and I want you to model your financial behavior after people who are in the position you want to be in some day.
ó Dave
ó Dave Ramsey is Americaís 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. Daveís latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at