Dave Ramsey was my first introduction to the world of personal finance gurus.
My education up until I read The Total Money Makeover had revolved around investing. I studied finance in college. I’d read books like The Little Book of Common Sense Investing and other investing classics.
But while these books gave me the foundation to invest, I never thought much about my personal finances.
But upon reading The Total Money Makeover, my mindset changed. I began to realize how broader personal finance was then just investing. More important for me, how much I liked learning about personal finance.
As this was the time I got out of college, his advice was very useful. My wife and I paid off around $14,000 in student loans in one year. We built an emergency fund. We started saving 15%+ of our income.
Looking back, finding his podcast and books has led to a lot of good choices.
As it’s been 10+ years, I’ve dug much deeper into the rabbit hole of personal finance. I became a Certified Financial Planner™, I started this blog, and continued to educate myself.
Yet, many of the lessons I heard from Dave Ramsey still stick with me today.
Here are 17 that have stood the test of time.
Related Reading from The Ways To Wealth
- Dave Ramsey’s Financial Rules of Thumb: Home, Investing, Car, and More
- The Dave Ramsey Allocated Spending Plan: Guide + Worksheets
- Dave Ramsey Recommended Household Budget Percentages
17 Dave Ramsey Money Tips Worth Knowing
# 1) Being in debt is an emergency. If you have non-mortgage debt, your finances are in a state of emergency. You must focus on eliminating this debt as fast as possible.
# 2) The power of focus. The power of the baby steps and the debt snowball is that it has you focusing on one step at a time. This is often the best thing to do, as typically there’s one clear objective that has the highest payoff.
# 3) It takes two. To paraphrase one of my favorite lines, “You don’t have a money problem, you have a marriage problem.” If you’re not on the same page as a couple with money, you need to get on the same page ASAP.
# 4) Pay off your mortgage. It never occurred to me before listening to the show that there’s an option to pay off your mortgage early. And if you can’t, at least consider refinancing your mortgage to a lower interest rate, which can save you thousands of dollars.
# 5) Change your environment to change your behavior. I never went all cash but the concept of changing your environment by cutting up your credit cards to change your behavior, has stuck with me. See: The Ultimate Guide To The Cash Envelope System. Also see, How to Stop Impulse Buying for Good
# 6) You are responsible for where your money goes. Decide before the month begins where the money goes, not afterwards.
# 7) The power of a zero based budget. Using a zero based budget, one in which every dollar is allocated, is the best way to tell your money where it goes.
# 8) Your kids inherit your money skills. Setting a great example is one of the primary drivers I have to handle money well.
# 9) Don’t allow mistakes to compound. Many callers owe more then their car is worth, so they think it’s not in their best interest to sell. Yet, Dave goes through the math and explains to them that selling their underwater car is in their best interest. This is just one example of not letting mistakes continue to hurt you.
# 10) Don’t keep a mortgage around for tax deductions. In the vast majority of scenarios, the math simply doesn’t make sense.
# 11) Don’t buy anything your Grandma wouldn’t have. We often think many of the latest technologies are essential to living a happy life. Yet, Ramsey often suggests to think and act like your Grandparents when making financial decisions.
# 12) Car payments aren’t a way of life. Like a mortgage, I assumed car payments were a way of life. Instead, pay for what you can afford in cash and invest the savings.
# 13) The Joneses are broke. He shares a lot of good stats on the average household debt in the U.S., making it a wise choice not to try to follow the average person’s footsteps.
# 14) Building wealth is a good thing. It’s not that building wealth is evil, it’s that the love of money above all else is.
# 15) It’s okay to have stuff. Just don’t let your stuff have you. Toys and gadgets are fun to have but it’s important to put them in their proper place.
# 16) Self responsibility. Dave often takes calls from those who want to blame everyone but themselves for their money situation. Dave isn’t afraid to call these people a “big baby” to their face and advise to start taking responsibility.
# 17) Don’t worry about what others think. When you make choices that go against the social norms, that usually means you’re doing something right.
Related Reading from The Ways To Wealth
- 100 Insanely Smart Ways To Save Money
- 12 Ways To Build A $1,000 Emergency Fund Faster
- How To Get Out Of Debt Fast On A Low Income: 6 Simple Steps