Dave Ramsey, CEO of Ramsey Solutions, joined TheStreet to share some tips for finding financial balance.
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00:00So what is your biggest piece of advice for people who are buying cars? I mean,
00:04you have to have a car. Some people really do have to have a car.
00:08Oh, I didn't say you didn't have to have a car. I said you don't have to have a $30,000 car.
00:11A $5,000 car will get you to work. I mean, get you an old Camry, an old Accord and pay cash for it.
00:17Stinking $700 a month. How quick can you save $5,000 doing that? Real quick. And a $5,000 car
00:25is not a bad car in today's world. Now, I don't want to drive that the rest of my life. I'm paying
00:29a price to win here. I want to drive like no one else so later I can drive like no one else. I
00:34guarantee you I didn't drive to work in a $5,000 car, but I did for a while back in the day when
00:40I was getting started, you know. So yeah, you pay cash. And you don't go on vacation if you
00:45can't afford to pay for it. Hello. And, you know, quit spending money on Christmas that you don't
00:50have. Yes, we need to have Christmas. I'm not the Grinch. But the money people spend on their pets
00:58and then don't have money for their Roth IRA or money for a down payment on a house. It's
01:02unbelievable. Designer dogs. I mean, I love dogs. I've got a designer dog. But, oh, my gosh. You
01:08know, you go through our consumption patterns. Then you go, we got no room to whine about not
01:15having a down payment because you spent all the freaking money. It's that simple. So how do you
01:21find balance? Because people love their pets. They love their nice cars. They like their nice
01:26vacations. And they might feel like you're sucking the life out of them. So how do we find
01:33balance where they get to enjoy life, enjoy the money that they do make, but also be able to save
01:39and be able to eventually buy? Well, what my wife Sharon and I have done and what we've taught
01:44millions of other people to do is to live like no one else, pay a price so that later you can live
01:50and give like no one else. I'm not saying this is a forever decision. I'm saying it's a decision
01:57to where we get our act together financially so that we can save and invest. And guess what? You
02:02start saving and investing. Now you're going to get a home. Now your rent cost goes down
02:07because the rent's going to go up every year. But your home price doesn't or your home mortgage
02:11doesn't go up every year if you take a fixed mortgage. OK. And if you pay cash for your cars,
02:16then you got that car payment freed up to save up and pay cash for the next car.
02:21And if you pay cash for your vacation, then when you're on vacation, you actually relax.
02:26It doesn't follow you home, you know. And so then when you get back to work, you're more productive
02:32and maybe your career will go. So I'm all about prosperity. I'm not a dream killer. I'm a nightmare
02:37killer. And this thing of acting like we're rich when we're not, that's what's killing folk.
02:43So you you want us to rethink or become reacquainted with the idea of delayed gratification?
02:52There you go. It's one definition of maturity, the ability to delay pleasure. That's what a
02:57psychologist would tell you. That's emotional maturity. Stay away from the donut if you're
03:02overweight. That's me talking to me, by the way.