Shirley and I have been there, too. In 1972, we bought a new house. It wasn't a brand new house, but new to us. But that was only the beginning of the things we needed because the furniture didn't fit so we had to buy new furniture and then a washer and dryer and we bought all that stuff. And then for some reason, I chose that moment to buy a new car, but she wanted a new car, too. She just wanted a different new car and we were fussing over that and I won the argument and I bought a new Buick, a shiny bronze Buick with rally wheels that flashed when you drove and just all of this stuff that we were buying. I was driving down the freeway one day and thinking and adding that up in my head. I just remember saying, "Man alive, we're getting into a hole here," and some of it should have been thought through more than it was. And I said, "This has got to stop," and we made some changes.
Roger Marsh: That is a story that Dr. Dobson shared the last time we aired the classic broadcast with Dave Ramsey that we're sharing today on Family Talk. I'm Roger Marsh, and in today's consumer-driven society with easy credit everywhere you look, it's easy to bite off more than you can chew. Some research indicates that the average American family carries about $15,762 in credit card debt. Now, that's not including a mortgage or a car payment or student loans. That's just credit card debt alone. It's clear to see why finances can be a source of tension for many families.
Here at Family Talk, we are committed to providing resources to strengthen the family, and Dr. Dobson's timeless conversation with Dave Ramsey is a great tool for learning to manage money better and reduce one source of tension. We heard the first half of this fascinating conversation last time and we will hear the remainder of it today. I hope you're ready to take notes, because Dave Ramsey is going to share some solid, practical concepts that will help get your family's finances back under control.
Dave Ramsey is the author of six New York Times bestsellers on this topic, including the one this discussion was based on, called The Total Money Makeover. He hosts his own national radio talk show called The Dave Ramsey Show and it has millions of listeners weekly. Dave and his wife Sharon have been married for over 30 years and they have three children together. Here now is Dr. Dobson's conversation with Dave Ramsey on this Family Talk broadcast.
Dave Ramsey: I grew up with old-fashioned parents. I mean, if we threw a fit around our house, we'd get our tail tanned. You know what I mean? That would happen. And if you really wanted to get your tail tanned, you could do it in the grocery store and embarrass mama, then it'd be bad.
Dr. Dobson: And now you just throw a temper tantrum.
Dave Ramsey: That's the old-fashioned temper tantrum. I was in the grocery store the other day and I saw this little kid in there. He's a little toddler and he's having one of those moments that they have, and he doesn't know how close he is to getting it. I can tell him mom's getting ready to get after him, but he's screaming and throwing a fit and, "I want it, I want it, I want it, I want it." And it suddenly occurred to me that that little kid, that we all know him, we've all seen him. He lives inside of me. And when I was standing in front of that HD Bose surround sound plasma screen the other day, he woke up and he started having his own little fit right there in a Dave body. That's kind of embarrassing. And I've seen people do that in furniture stores. It's embarrassing to watch a 54-year-old woman have a temper tantrum, and that little kid's name is, 'I want it. I want it now,' immaturity.
Dr. Dobson: Are you telling me that when I brought that Buick Century that it was my little boy sitting behind the wheel?
Dave Ramsey: I think that's what Shirley told you. I didn't say it. I'll blame that one on Shirley.
Dr. Dobson: You got that right. Let's talk about some of the catch phrases that you use in this book and in this chapter of the book. You make a distinction between wants and needs. What is that distinction?
Dave Ramsey: Well, that comes along with one of the five steps you need to go through if you're going to make a major purchase, and one of those things is you need to check your motives. If you check your motives, then you back up and say, "Is this a want or a need?" And the bottom line is most people listening to this broadcast really don't have any needs. They're pretty well covered. Needs are food. And we have no issue with that by and large in America. I mean, yes, there's some hungry people. I'm not saying that, but I'm saying most people listening to this broadcast, food's not a problem except too much of it.
Clothing. Most of us have clothing. Wanting some more clothing is different than needing some more clothing. Shelter. Most of us have shelter. Now, do we want to own a home or rent a different home? That's a luxury. It changes. Transportation. I look down, my feet are attached to the end of my legs and we got great bus systems and you can buy a great car for 1000 bucks at a garage sale [crosstalk 00:05:03]. Absolutely. And before I have car payments, that's where I'll go.
So, you need to really pretty much say, "Whatever it is I'm buying, it's probably a want." And that's okay by the way, but don't rationalize it. I'm amazed when people call my show and they say things like, "I was forced to buy a car." You were forced? They had a gun? "I needed a dress." No, you wanted one. And that's okay to want one, but don't use that as a rationalization to make a rash and poor decision.
Always consider your motives. That's one of your steps, and this really kind of comes down to contentment. "Godliness with contentment is great gain," scripture says, and I think that contentment may be the most powerful financial principle there is. If you can receive Christ in such a way that you get peace in your spirit and it revolutionizes your spiritual walk, all of this flurry and all these things trying to impact me, I'm just calm and I don't have to have that to be happy. What happens when we don't have contentment is we get fun and happy confused. You can buy fun. You can't buy happy.
Dr. Dobson: What about delayed pleasure? You talked about that.
Dave Ramsey: Well, learning to delay pleasure, that's a sign of maturity. If you're going to be a grownup, whether you're 54 or whether you're 14, you have to learn to put off the good to get the best. We never are hardly having a problem with the bad. We're trading good for best, and I've even taught my teenage daughters about that and my son about that and we're talking about interaction sexually with the opposite sex. Don't trade the good for the best. Delay gratification. Do it right. It's the same thing when you're buying stuff. When you save up and pay for things, you own it. It doesn't own you. The borrower is slave to the lender. I'm not paying payments the rest of my life.
Dr. Dobson: You have two sets of lists in this section of the book that I'd like you to give us. The first one is five guidelines that you offer to help people when they're making a significant purchase, and I think you defined significant as $300 or more. It's probably changing with time, but-
Dave Ramsey: It is, and "significant's" different in each household, but generally speaking, if you're making 40 or $50,000 a year, you spend $300, you notice that.
Dr. Dobson: Okay, what are the guidelines?
Dave Ramsey: Number one is wait overnight. Wait overnight, if it's over $300 regardless. "Well, it'll be gone." It won't be gone. They got 17 of them in the back shrink-wrapped. It's not going to be gone. "We've only got one. The sale only lasts until 5:00 and then we won't honor it." Well, then I won't buy it. Okay. Wait overnight. The Bible says," He who is impulsive exalts folly." Folly is the verb for fool. Fool in action is folly. Been there, done that. I've got all the tee shirts. You don't need to do it. Wait overnight.
Number two, if you can't pay for it, don't buy it. Number three, consider your motives, what we just talked about. Is it a want? Is it a need? Is this a contentment thing? Number four, always take the counsel of your spouse. Always take the counsel of your spouse. Never buy a major item without discussing it and being in unity with your spouse. The preacher said, "And now you are one," and when you go making major decisions by yourself, you're operating on half your brain.
Dr. Dobson: There you go beatin' up on me for the Century Buick.
Dave Ramsey: You chose the metaphor.
Dr. Dobson: I will never tell it again.
Dave Ramsey: Seek the counsel of your spouse. Proverbs 31 says, "Who can find a virtuous wife, for her worth is far above rubies. The heart of her husband safely trusts her and he will have no lack of gain." Be in unity, and be in unity about your giving, too. If you're trying to decide, "Are we going to give to this para church organization? Are we going to give to this building program?" If you can't get in unity about it, that's God talking. That's the Holy Spirit talking. My wife's got these little antenna that fit on top of her head. I don't have them. It's not that mine don't work. I just don't even have them.
Dr. Dobson: It's kind of disgusting, isn't it?
Dave Ramsey: It is. It's awful.
Dr. Dobson: I have a PhD in something and I can spend an evening with some guy and Shirley's sitting there beside me and when we get home, she's got all kinds of information that I didn't pick up.
Dave Ramsey: Absolutely.
Dr. Dobson: And the trouble is I will know it in 30 days, but she got it the first night. That is amazing how God equipped women with that intuitive perspective.
Dave Ramsey: I'll know it in 30 days or I'll know at $20,000 later, which really scares me. I don't want to do that. The next one is, consider the opportunity cost. If you had $4,000, you could put it in a mutual fund and a Roth IRA or you could go on a cruise. Either one is a great thing to do. Cruises are great. They're fun. And a mutual fund Roth IRA is a phenomenal thing. In 20 years, what will the cruise be worth? It's a memory with some pictures and it was fun and you need to do some of that in your life. But if you're considering a cruise, consider, "Did I fund my Roth IRA? And in light of that, do I need to do a cruise?" Because what will $4,000 be worth? Oh, 40, 50, $60,000. Later. And even more later after that and even more later after that. And so we're either going to turn $4,000 into some pictures and a nice memory or we're going to turn it into an investment that could change our family tree where we leave a legacy. You have to think through those things.
Dr. Dobson: What do you have against fun? I think you have a campaign against fun.
Dave Ramsey: We just teach people if they'll live like no one else, later they get to live like no one else.
Dr. Dobson: Delayed pleasure.
Dave Ramsey: And if you do that Roth IRA and you got a couple of hundred thousand dollars laying there and then you go on the cruise, the cruise is more fun because you get to do stuff on the cruise. And lastly, never buy anything you don't understand, particularly financial things. Don't buy insurance you don't understand. Don't buy investments you don't understand. Yes, we need professionals to advise us, but they need to advise us with the heart of a teacher. "Oh, I put mine with Henry, but Henry had a good suit and Charlie's over at the church." Listen, there's dummies in church too, okay? And there's well-intentioned nincompoops there too, okay, that don't mean to rip people off, but they thought it was a good deal too.
Dr. Dobson: And there are some people in the church that do know they're ripping you off.
Dave Ramsey: That's sad. I didn't want to go there. I'll let you do that. But it is, it's true. Your job is to understand your deal and it's not, "Oh, so and so ripped me off." No, you didn't understand. You wouldn't have gotten ripped off if you'd have slowed down, waited overnight, your spouse's antennas were in play, you consider the opportunity costs and you understand it before you do it. It's about personal responsibility. Quit being a victim in everything financial. Quit being a victim in all your purchases. "I didn't understand the warranty. They didn't cover that." Well then why'd you buy the warranty? Don't buy it. You ever heard anybody coming into the emergency room, "I hope my health insurance covers this," with their arm dangling? This the wrong time to ask. You should have been asking for the 22 years you've been paying the premiums on the health insurance if this was going to be covered.
Dr. Dobson: We were talking about impulsivity and supermarkets the time before. Someone said that you should never go to the supermarket when you're very, very hungry because then you are vulnerable to all kinds of impulse buying.
Dave Ramsey: That's exactly right. Anything you're buying, you need to buy with a plan. How about going with a list and don't buy anything that's not on the list? You will avoid the marketing tactics then. "Oh, well, it was a really good deal." No, it probably wasn't. It really wasn't. It would have been on your list if you needed it, and, "Oh, I forgot." Maybe, maybe. But these are the way our minds play. And so go eat dinner, have a nice list, and then go shopping.
Roger Marsh: You're listening to financial expert Dave Ramsey on this Family Talk broadcast. And if you're a parent, you might be thinking about how to teach your kids about money. Some experts even say that we see 4 to 6,000 advertisements a day. How do you help your kids see past all that clutter and manage their own money well? Let's listen in now as Dave expertly takes on that issue.
Dave Ramsey: When you mix all of these things together, you get a culture of consumption. And regardless of whether we're believers or whether we're in the church or whether we're not, we're impacted by that culture of consumption. And so when found money hits culture of consumption, philosophy, we start thinking, "Oh, I can go get some happiness now."
Dave Ramsey: When my daughters were young teenagers, they always wanted to go to the mall, go to the mall, go hang out with my friends at the mall. And I was dropping them off one day with one of their little friends and all the little rules, covering the rules. And I said, "Oh, by the way, why y'all are in there, pick me up a box of fun. Pick me up a box of happiness." And she said, "Oh Dad." And I said, "Oh no, it's got to be for sale in there because you're in there looking for it all the time. It must be in there. The mall must be where happiness is. It's right between The Gap and The Limited. It's a franchise. Happiness is right there." And gosh, I don't know, but we have that tendency, and I teach this for a living and I have that tendency to think that, "Oh, found money. I get to buy me something." And that's self-centered and self-driven, which is really not Christ-like in my case.
Dr. Dobson: Dave, what do people say when you began teaching these concepts?
Dave Ramsey: I think their lights come on. They start to realize things that they already knew. They suspected that there was a lot of money spent on trying to direct to their behaviors. And when you kind of give it credence, you give it credibility, they slow down, they stop and they become very thoughtful. And I think it adds a level of wisdom to people when they hear these steps.
Dr. Dobson: And that is your motive.
Dave Ramsey: Absolutely. I'm not against you having some nice things. I'm not one of these financial guys says you need to live in a cave, collect lint and only come out on triple coupon Thursday. I want you to have a life. God wants you to have a life. You're a King's kid. You ought to have fun. We ought to take dominion over things. We ought to enjoy this stuff. We ought to be giving. And neither fun, giving… all those things can mix together. There's only really three things you can do with money. Have fun with it, invest it and save it, and give it, and you better be doing all three. But we got the fun one down. We need to work on the other two.
Dr. Dobson: We started the program last time talking about the fact that you were 26 years of age and you had made $4 million and within four years, you'd lost it all. How do you look back on that now and especially in the way you live your life now? Are you really making different decisions today than you did then? Have you made a dramatic change in the way you handle money and have you stayed with it?
Dave Ramsey: We've stayed with it and we've become more and more intense because we become more and more confident in the principles. I read them in the bible, so I knew they were the truth. I knew when he said the borrower's slave to the lender, God meant it. He wasn't kidding. I got it intellectually, but over a couple of decades of living without any debt, living on a budget, taking the counsel of my spouse, not being impulsive to exalt folly, and so on and so on and so on, I've just become so excited and more and more and more intense about it to where I really can't even get in an argument with somebody because I have to win, because this stuff works. God's ways of handling money, it just works.
Dr. Dobson: That's a wonderful experience not having to worry about financial ruin, isn't it? I mean, that's almost worth delayed pleasure.
Dave Ramsey: It really is, and I tell folks, kind of a little microcosm of that is if you can work for a few years and really watch what you're doing and even get your mortgage paid off, what if you took your shoes off and walked through the backyard? I bet the grass feels different when you own it. You know what I mean? There's a sense of release in the spiritual realm. There's a sense of release in your relationships, in your creativity when you're functioning in God's ways of doing these things because he gives you boundaries and he's growing you up in the process and it manifests itself in so many ways in your life. It's positive.
Dr. Dobson: Dave, I was thinking about this in preparation for this broadcast, and you may not want me to say this, but if everybody did what you're saying, if we all followed these principles which the Lord would have us do, would not our economy tank? Because it's based on spending and when a consumer gets nervous and quits spending, the stock market goes into the tank and everybody is sweating, their mouth goes dry because this economy is based on wild spending.
Dave Ramsey: It is to a degree, and to a degree, that's true. If we could throw a switch and everybody quit at one time, oh, we'd collapse the economy. If over time we started to undo and go back to the way grandma was living, we'd have a more stable and a more healthy economy, because Dr. Dobson, I haven't borrowed any money in 18 years since I went broke, but I didn't quit buying things. By the way, I got the big screen TV. I didn't quit buying things. I still like-
Dr. Dobson: That little boy is still in there?
Dave Ramsey: He's still in there, and he won that fight. But he really didn't win the fight because a man bought that TV, not a little boy, because I had saved up, I prayed about it and given the ratios of my financial situation, it was a small purchase and it made sense. My wife was okay with it. It fits. That was a manly purchase then. And so you can convert the little boy into a man in that process. And no, the economy would not collapse, because I still buy things. I might buy more now [crosstalk 00:18:14].
Dr. Dobson: That money is going to get spent. It's just not spent in advance and for foolish things.
Dave Ramsey: There might not be as many people sitting in cubicles answering credit card calls.
Dr. Dobson: Well, you've obviously found a niche, one that's based on scripture because your books have all been best sellers. Is that a shock to you that you can preach discipline, which is really what you're talking about? You're really talking about financial discipline. And people are typically not really excited about hearing those kinds of things, delayed pleasure and so on. And yet they must be, or they wouldn't be buying your books.
Dave Ramsey: Well, I think they're ready to hear it because they know their plan's not working. And the beautiful thing is that by bringing them a Christian way, God's way of doing these things, it's going to work, and we're a mainstream talk radio show giving scriptural financial advice.
Dr. Dobson: You have complete freedom to do that?
Dave Ramsey: Well, I own the show. They want Dave Ramsey's opinion. They're going to get Dave Ramsey's opinion. When you make those stations money and get them ratings, they put up with a lot of things off of me. But the good news is that whether somebody is in church or not, then I can get to them and give them a cool drink of water in the name of Christ whether they realize that at that moment or not. But it opens the door and it begins to move them towards hope and towards stability and a change in their relationships. And it's fun.
Dr. Dobson: This is powerful stuff. And again, anything that comes out of scripture and is repeated in so many ways within the bible has got to be right. God does not make mistakes. And so you approach it with a great deal of confidence, don't you?
Dave Ramsey: Yes, sir, more than when I started, but we've seen so many hundreds of thousands of lives affected and Sharon and I are walking testimonies as well that it just works, and it's extreme levels of confidence, but it's not confidence in me. It's confidence in God's word is the truth. It just works. It's not real spiritual almost. It's real practical. There's a cause effect scenario.
Dr. Dobson: What else besides this book, Financial Peace Revisited. This is a revised version. Is that right?
Dave Ramsey: Yes.
Dr. Dobson: All right. What else besides this book can people get of yours?
Dave Ramsey: We have a 13 week series called Financial Peace University that's taught in corporate America, that's taught in churches, taught on military bases across America. That stuff's available. Lots of books and DVDs and programs and processes, more than we could enumerate. They can just check the website at daveramsey.com if they want to know more.
Dr. Dobson: Are you writing now?
Dave Ramsey: Yes sir. Always.
Dr. Dobson: What's coming?
Dave Ramsey: I'm working on some stuff. We've been running our business. We've done it as best we can figure out scripturally and it works and we've got a fabulous team and a fabulous culture and I'm going to share some of the stuff that we've done there.
Dr. Dobson: Well, when you get it done, when that book is out, you come back and talk to us about it, will you?
Dave Ramsey: I would be honored, sir.
Dr. Dobson: It is a pleasure to interact with you. And I hear the sound judgment in your voice that I heard in Larry Burkett's, who's gone on to be with the Lord, and Ron Blue, who have been on this program many, many times and you're completely in harmony with these guys, aren't you?
Dave Ramsey: Well, to be put in the same sentence with them is quite an honor. Those men are icons in our world and we're just hugely respectful of them. They planted the seeds that caused us to be able to do what we do today.
Dr. Dobson: One last question. When did you give your heart to the Lord?
Dave Ramsey: I was 24 years old. I met the Lord as an adult, which may be why I do as much stuff in the mainstream. I want to get to the old Daves out there. And so that was 1984.
Dr. Dobson: Thanks for being our guest again, and we will invite you back.
Dave Ramsey: Thank you, sir. It was an honor to be with you.
Roger Marsh: Well, it's been a great day to feature Dave Ramsey on this two day broadcast of Family Talk with Dr. James Dobson. Not only does he have a clear message about managing money God's way, he delivers it with humor and candor and because of his early financial failures himself, he can easily identify with those who are struggling with money issues and feel like there's no way out. The solution is in the Bible.
Jesus had more to say about money than any other subject in scripture, and it was nearly all negative because he was warning about what poor money management can do to you. For example, many researchers say that one of the leading reasons for divorce today is conflict over finances. It's sad to think that the most important relationship we'll have with another person can be destroyed by inability to manage money, but sadly it's true.
That's why Family Talk is here to put tools in the hands of couples, both young and old, that will help keep relationships intact and that's why we devoted two days to this important subject of finances. And one of the main tools we can provide is a CD copy of these two days of broadcast with our compliments to anyone who gives us a call today. That's how important it is. That's the whole reason Family Talk is here on a very practical level. If we can help you get a handle on your finances, give us a call and the CD is yours. 877-732-6825.
Now obviously, there is a cost associated with us doing this. We are a listener-supported ministry and we cannot continue doing this without others of you coming alongside us, but we will continue distributing them complimentarily if some of you will help us financially. Thank you for helping us respond to some of the struggles facing families today. I'm Roger Marsh. Thank you for joining us. God bless and we'll see you next time for another edition of Dr. James Dobson's Family Talk.
Announcer: This has been a presentation of the Dr. James Dobson Family Institute.
Roger Marsh: Hey everyone. Roger Marsh here. When you think about your family and where they will be when you're no longer living, are you worried? Are you confident? Are you hopeful? What kind of legacy are you leaving for your children and their children? Here at Family Talk, we're committed to helping you understand the legacy that you're leaving for your family. Join us today at drjamesdobson.org for helpful insights, tips, and advice from Dr. James Dobson himself, and remember, your legacy matters.
Tim Clinton: This is Dr. Tim Clinton, executive director of the James Dobson Family Institute. Thanks for listening today. We hope you found this program helpful and encouraging. Please remember that our ministry is here to serve you and your family. For more information about our programs and resources or to learn how you can support us, go to drjamesdobson.org. That's drjamesdobson.org or call us toll free, 877-732-6825. I pray that God will bless you in 2020. We're so grateful for your partnership. We ask you to stand with us and to continue to defend the Christian values in an ever changing culture. Thanks again for joining us. We hope you join us again on the next edition of Dr. James Dobson's Family Talk.