Dave Ramsey dispenses financial advice to millions of Americans every year through his best-selling books, one of the most recent being The Total Money Makeover. He hosts his own nationally syndicated radio program, The Dave Ramsey Show, where avid listeners, everyday Joes, formerly under financial stress, flock to his microphones to proclaim their newfound freedom from debt. Ramsey’s story, however, reaches millions because he experienced financial meltdown years ago, managed to climb out of debt, and now helps others do the same. “I don’t listen to broke people,” he likes to say. He carved out some time to answer some questions for Message.
Message: what do you say to a couple at financial rock bottom, perhaps dealing with joblessness or facing foreclosure?
You need to take care of your four walls first—food, shelter, clothing, and transportation. Food—buy your family food. That’s the very first thing you do. The next thing you do is keep the lights and water on—utilities. The next thing you do is take care of shelter. Then you take care of transportation, and then you take care of basic clothing needs. We pay the house payment and the car payment, we eat, and we keep the lights on before we do anything else. Don’t be behind on your home, and keep current on your credit cards. If you’re having trouble taking care of your necessities, then you need to look at how you can increase your income. Pick up an extra job or two delivering pizzas or throwing papers. Remember, this isn’t a long-term way of life; this is a short-term period of focused intensity to make things happen.
When you get all of these things taken care of, worry starts to leave, and you can focus on your situation and try to get control of it. When you’re in a tailspin, you can’t think straight, and you will not win with your money. Putting up the four walls in a state of crisis will help eliminate fear, so that you can work through your situation.
Message: what is the key to preserving the relationship that is strained because of finances?
Money fights and money problems are the number one cause of divorce. If you aren’t working together, it is impossible to win. Opposites attract, and in every marriage there’s a nerd and a free spirit. The nerd loves budgeting and spreadsheets, and the free spirit is usually a little less organized. But remember, it’s those very differences that brought you together in the first place.
Each month, sit down together and create a written plan for your money, a budget. The nerd might prepare the budget, but the free spirit gets to have an opinion and suggest changes. Once the budget is agreed upon, both parties have to swear they won’t do anything with their money that’s not on that paper until they discuss it with each other. Creating a budget together allows you to agree on where your money goes and ultimately your values.
Message: How do you come back from financial ruin?
Change is painful. Most people won’t change until the pain of where they are exceeds the pain of change. If you’ve had a wakeup call and realized your financial plan didn’t work, then it’s time to change. But the good news is that no matter your situation, it’s possible to win with money. Trust me, I’ve been there. The first step to winning with your money is being intentional, and that means making a budget. Virtually no one can win with money without a budget. When you know what you’re doing with your money and where it’s going, you’re able to control it instead of it controlling you.
Message: are there spiritual, biblical concepts you can reference that provide direction going forward?
There are more than 800 scriptures about money that show us how to handle our finances His way. Here are a few: Budgeting: Luke 14:28-30: “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’” Debt: Proverbs 22:7: “The rich rules over the poor, and the borrower is servant to the lender.”
Family: Proverbs 31:10, 11: “Who can find a virtuous wife? For her worth is far above rubies. The heart of her husband safely trusts her; so he will have no lack of gain.” Saving: Proverbs 21:20: “There is desirable treasure, and oil in the dwelling of the wise, but a foolish man squanders it.”
Message: what is the most liberating thing you may never have known were it not for the financial low you experienced yourself?
After losing everything, I went on a quest to figure out how money really works and how I could have confidence handling it. That quest led me to a really uncomfortable place— my mirror. I came to realize that my money problems and worries largely began and ended with the person in the mirror. Personal finance is 80 percent behavior and 20 percent head knowledge. Most people know what to do; they just don’t do it. I realized that if I could learn to manage myself, I could win with money.