Personal finance expert Dave Ramsey isn't sugarcoating it. In a recent post on X and segment on “The Ramsey Show,” he laid out exactly why so many Americans are struggling financially.
According to Ramsey, the problem isn't your paycheck. “You're not broke because you don't make enough. You're broke because you give your income to everyone else,” he said.
Debt Payments Are Eating Your Income
Ramsey pointed to credit card bills, car payments and student loans as the main reasons people are stuck living paycheck to paycheck. “Every payment is money that you could be using to build wealth for yourself instead of making everyone else rich,” he wrote.
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In the video clip, Ramsey let loose. “Credit cards, stupid. Student loans, stupid. Car payments, stupid on steroids,” he said. He also criticized homeowners for borrowing against their homes to upgrade things like kitchen counters. “Somebody ought to smack you. That’s stupid.”
Ramsey emphasized that your income is your most powerful financial tool. But if you give it away every month, you're giving up your future. “When you give your income to someone else, you don’t have it anymore. And when you give your income away, you have given up your economic future all for crap,” he said.
Ramsey's 3-Step Plan to Break the Cycle
Ramsey offered a simple but strict plan to stop the bleeding. First, he said to make a zero-based budget and “tell every dollar where to go on purpose.” Next, he urged people to cut their debt aggressively, using what he calls the debt snowball method. Finally, he advised against financing anything and said to “pay cash for the things you buy.”
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He said most millionaires he interviews did not inherit their wealth. “Less than 10% of them inherited the money. They did it by saving and investing their income. They did not give their income to Best Buy.”
Ramsey also called out a lack of critical thinking around money. “We’re fat and we’re broke because we have no ability to do critical thought and we don’t stop and look at what we’re putting into our lives,” he said.
He also highlighted how common it is for people to take on massive car loans that weigh down their finances. “This is nuts. It’s nuts. It’s completely out of control,” he said. “I mean, the number of people I’ve talked to just today with $25,000 and $30,000 owed on their stupid car. It’s a car. Good God, it’s a car.”
He concluded with one message: Think. “Think, think, think. Seriously.”
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