You are the Hero.. do not let a politician tell become the hero in your story

One of the things I hate about the political cycle when it comes up a presidential year is you have people on all the news channels — people on the left and one the right, you have Republicans and you have Democrats — telling you how they’re going to fix your life. And the reason I hate that is, A. That’s a lie, that’s not true; B. It makes you think that you can sit around and wait on one of those morons to fix your life.

There’s nobody on the news channel that’s gonna fix your life. There’s no government program that’s gonna fix your life. There’s no Republican that if he gets elected is going to become Jesus. And there’s no Democrat that if they get elected is going to be Jesus of your life and give you everything you ever wanted. It’s an absolute lie and it’s been going on since man invented politics, I guess.

But you know what? I don’t care, I don’t care where it came from. What I care about is what it’s doing to this nation and what it’s doing to some of you that are watching.

You are not a victim. You’re not a victim of big corporations. You’re not a victim of Wall Street. You’re not a victim of capitalism. You’re not a victim of wealth inequality. You’re not a victim of racism. You’re not a victim.

Now, are all of those things real and do they sometimes oppress you and me? You bet. I had a big company step on my neck and kick my face in last week. Pissed me off, man. (They) just broke a contract and just got a way with it because they’ve got such power that all I can do is sue this multi-million-dollar company. And I’m not gonna waste my millions of dollars doing that. It made me mad. I was oppressed by a big company. But you know what? I’m not a victim. I’m not gonna adopt the thinking, “Well, you can’t get ahead in America because that one big company kicked Dave Ramsey’s face in.”

No, you get up off your butt. You’re the hero of this story. You’re not the victim in this story. And when people tell you you’re a victim and that they have the solution, that makes them the hero. Do not let a politician, do not let a news anchor become the “hero” in your story. You are they hero in your story. You are in charge of your destiny. You are the one who gets up off your couch and decides to live your life. You’re the one that get sick and tired of being sick and tired and decides to get out of debt; decides to change your body by going into an exercise program; decides to read some nonfiction books this year; decides to understand the Bible for the first time in your life; decides to start attending church and becoming that kind of dad that you’ve always wanted to be.

You’re not a victim. You’re not a victim of your parents and your upbringing, your dysfunctional family. Honey, we all came from dysfunctional families. Some families put the “fun” in “dysfunctional.” You’ve got to decide you’re the hero. You’re not the victim. You’re in charge of your life.

People spend more money with a credit card vs paying with cash

Question: I don’t understand why you don’t like it when people properly manage their credit cards and pay them off every month. By doing this, you pay no interest and in my case I even got a free trip to Europe from using my credit card. Please explain.


Dave says: I truly doubt that I can explain it to your satisfaction, but here goes. First, the credit card company did not give you a free trip to Europe. It’s not going to lose money on transaction after transaction, year after year. The fallacy is that you feel as though you’ve outsmarted a multi-billion-dollar company that studies human behavior at incredible levels. You maybe, possibly came out ahead against it during that particular calendar year, but even that’s debatable.

Over the course of your life, you’ll spend more when using credit cards as opposed to cash. There’s plenty of research proving this to be fact. If you use a credit card repeatedly with the idea that you’re getting a free trip to Europe because you’re building up your miles, you spend more. An example would be McDonald’s. When they started taking credit cards years ago, they found that the people using them spent 47 percent more.

In a good way, you are very unusual. You’re not playing over in the stupid zone like most people who use credit cards. But both I and the credit card companies have found that, on average, your behavior would put you in a class of less than one-half of 1 percent of their customers. Can 0.5 percent of people handling snakes manage not to get bitten? Sure. But that doesn’t mean I’m going to start recommending snakes.

Renting makes sense for young couples

Dear Dave: My fiance and I are getting married in May. He’s a youth pastor, and I’m in grad school. His mom and dad found a home they think we’ll like, and they want to gift us money for a down payment. I’m not sure how I feel about this under our present circumstances. Do you think we should go ahead and accept when I’ll still be in school and we’ll still have debt to pay off? — Emily


Dear Emily: You need to get to know each other before you buy a house together. I always recommend that young couples rent for a year and concentrate on each other, the new marriage, cleaning up any debts you have, and establishing an emergency fund. Then, after another year or so when you’ve had time to take control of your finances, the idea of looking for a home becomes much smarter.

It sounds like your future in-laws are really generous people. They’re trying to do something nice for you two, but they kind of got out ahead of things with this idea. And in the process, they violated some boundaries in your relationship with your fiance.

My advice is to have a conversation with your fiance about all this and get on the same page about what is the smart thing to do. Then the two of you need to have a loving discussion with his parents. Let him do most of the talking, and say thank you a lot, but let them know you both feel it would be best to start out by renting something for a year or so. Then after a little time has passed, tell them if they still want to help with a down payment you’d both be very grateful.

I think this approach would be good for the boundary issues and for your finances!

Can we afford a Home, Boat and Horses

Question: My husband and I are renting an apartment for $1,200 a month. Together, we bring home about $7,000 a month, and we’d really like to buy a house soon. Right now we have about $10,000 in debt on a boat along with ongoing stable bills, food and upkeep for our three horses. What price range of houses should we look at in our situation?

Dave: Homeownership is a great goal, but first you two need to clean up your debt and build an emergency fund of three to six months of expenses. After that, I want you to save up enough for a down payment of at least 10 to 20 percent. When buying a home on a mortgage, I always recommend the monthly payments be no more than 25 percent of your monthly take-home pay on a 15-year, fixed-rate loan.

Now, let’s get to the other issues. You have some things in your life that are pulling at you financially. At some point, you may have to take a long look at the situation and ask the hard question, “What is more important to me: horses and boats or homeownership?” Getting rid of that boat, or finding new homes for one, two or all of your horses, would bring in some cash to put toward your debt and cut down on at least some of the animal maintenance.

Anyway, that’s how I would look at it. My wife and I are big fans of boats and horses. But we like boats more. One reason is because they don’t eat as much! I can’t get mad at you about either one, but right now you have three things pulling at you as financial priorities — homeownership, a boat and three horses. They’re all pulling at you, and they’re pulling at each other and limiting each other.

Of course, you can always buy a lot less in a house. But what it really comes down to is what’s most important to you. That’s the big question, and it’s one that only you can answer.

Losing IT job and cash flow problems

Dear Dave: I work in IT, and I recently learned that I’ll be losing my $88,000 a year job at the end of February. We’re debt-free, except for our home, and we have a full emergency fund in place. The problem is we just cash-flowed one daughter’s wedding, and we’ll be paying for another daughter’s college soon. I’ll receive a severance package of around $30,000 to $40,000, but we’re wondering if I should stop contributing to my 401(k) and stockpile cash until another job comes along. — Steve


Dear Steve: You’ve done a great job handling your money, so going a couple of months without contributing to your 401(k) isn’t going to mean the difference between retiring with dignity and eating Alpo in your golden years.

In this case, I would temporarily stop funding the 401(k). You’re in a high-demand line of work, so I think you’ll probably land something soon and maybe even get a raise in the process. The main thing is to be intentional. Go ahead and start networking and lining up interviews now. Try to land something as soon as possible so that you can start at the end of February or the first of March. At that point, you could look at the severance package as a signing bonus.

There’s not much lost between now and then with what you’d actually gain from what you put into your 401(k). There would be going forward, for sure, but I think you’ll be able to make that up pretty quickly.

Moral differences between parents and young adults

Dear Dave: I haven't spoken to my mom and sister in more than six months. Over time, I realized we have a real clash of moral values that has led to arguments and hard feelings. Lately, with it being Christmas season and a new year just around the corner, I've found myself wanting to navigate things a little better and stop avoiding them. It's been mostly just between myself and them, so my wife and kids are pretty insulated from the ugliness. Do you have any advice for handling situations such as these? — Dave


Dear Dave: Well, the good news is it doesn't sound like you've had to spend a lot of time with them. So their influence over you and your household has been minimal. Still, things like this are painful. These are people you love, even if they are hard to get along with or understand.

I'm not a family counselor, but my initial advice would be don't try to change them. And don't take discussions too deep. If you get together, just keep things simple and on the surface. To the extent they try to invade your family, that's where you have to put up a good solid boundary. You have to protect your family and try your best to keep bad influences at a distance. But I don't think you're going to fix them. Probably the best thing you can do is model sanity and reason in front of them.

A friend of mine who has some crazy in-laws says he adopts the bobblehead deal. He just sits there like a bobblehead and smiles and nods, no matter what craziness is swirling around. And that's not a bad idea when you think about it. You don't want things getting ugly if yoau can help it, plus the chances of you changing a lifetime of toxic behaviors in one brief interaction are very small.

Pray for them, too, Dave. Then, if they ask for help, maybe you could insert some gentle wisdom. Don't tell them what they're doing is wrong or that they're bad people. Just describe things you and your family have done and how you've handled similar situations. But until they bring it up, I wouldn't go there.