Dave Ramsey Lays Down The Law And Tells People If They Want Not To Be Broke, They Have To 'Act Their Wage'

Personal finance expert Dave Ramsey is known for his blunt advice. He has told people they need to work beyond their wages if they don't want to be broke. Here's what went down on an episode of "The Dave Ramsey Show." 

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During an episode of the personal finance help show, Ramsey was joined by team member Jade Warshaw as they discussed all things money. Ramsey is known for his hard-hitting advice, often delivered bluntly, and this advice he gave about broke people is certainly one of his bluntest. The episode was shared on Ramsey's social media account on X, formerly known as Twitter, and he wrote, "Most people are broke. They spend more than they have coming in." He's not wrong, as the latest findings have revealed that Americans are carrying record numbers of household debts from last year. 

A study by MarketWatch found that at the start of 2024, household debt was at a record high of $17.3 trillion. This household debt includes auto loans, student loans, credit card loans and revolving debt. Out of all these, credit card debt increased the most between 2022 and 2023, and the state with the highest credit card debt is the District of Columbia. The Federal Reserve Bank of New York's Center for Microeconomic Data released its report on the rising debt, and Joelle Scally, Regional Economic Principal within the Household and Public Policy Research Division, said in the report, "An increasing number of borrowers missed credit card payments, revealing worsening financial distress among some households." 

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Ramsey and Warshaw spoke about being broke and how more people are broke because of bad spending habits. During the episode, Ramsey told Warshaw, "You make $30,000, $40,000, $50,000 per year in America today, and you do rich people stuff for the next decade, you will not be poor anymore." Ramsey has often told people that the best way to build wealth is to start thinking like rich people. At first, you may think this means spending lots of money on luxuries, but this is inaccurate. For Ramsey, thinking and acting like the rich means being smart with your money and acting your wage. 

Some ways to live like the rich include "Paying cash for things" and avoiding spending money on your credit card, as that's money you don't have. Ramsey once said on his show, "Think, think, think. Seriously, so credit cards — stupid, stupid." 

Ramsey also encourages buying used cars instead of new ones. During an episode of his show in January, Ramsey called out car payments, saying they're stupid. He explained that people have so many loans and are in debt because they've wasted their money on a "stupid car payment to impress somebody at a stop light that you will never meet. And the thing’s going down in value like a rock." He called these car payments "stupid on steroids."    

In addition to buying used cars, Ramsey urges viewers to avoid leasing stuff and not to "finance your freaking vacations," and to "stay out of the timeshare office." Thinking like rich people also means having long-term financial plans for themselves and their children. It also means living on less than you earn, prioritizing saving for your future, investing your money in things you understand, and avoiding more debt. 

His biggest advice is to act on your wage: "If you don't want to be broke anymore, figure out what most people are doing and run in the other direction."          

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