I'm Debt Free, When Can I Splurge?

Gregg is gonna start us off this hour in Tennessee welcome to the Dave Ramsey show Gregg thank you sir thanks for taking my call sure what's up my question is I have been you know a list of yours for decades and never took my naps of peace but I fall of it pretty much your rules 999 times out of a hundred my question is for those of us who have become debt-free and we have no debt and at what point in time do we realize hey I've busted my butt say for decades when do I determine when can I start splurging some with my finances you know by little not really know like a toy or a car or whatever yeah probably about five years ago for you you're probably late what happens to us is what happens to us is that we live like no one else so that later we can live and give like no one else and then we forget to do it okay so you've lived like no one else you've you know you've been on rice and beans and you got out of debt and you got used to living on the cheap and you've been piling up money and you've done a great job and you're probably debt free probably got a big pile of money and you know and now it's emotionally hard to loosen up a little bit because you're afraid exactly you're afraid you're gonna screw it up exactly so the rule I use is is that when I'm working with people who have built some wealth and struggling with that and sometimes honestly Sharon and I struggle with it because our money has grown more than our emotional grasp of it we feel it we still feel like we are worth a lot less than we're actually mathematically worth you know what I'm saying correct yeah and so we have to what we say is if we're gonna splurge if we're gonna buy something that's just a crazy what we used to would call a crazy luxury item like when we were broke people and we would say no one should ever spend that on that have you ever heard that you know and so yeah and you're getting ready to now you're getting ready to spend that on that which is very cool you should by that car you know so the rule of thumb I use is this what is the ratio of that to my net worth okay so let's pretend let's use an example let's pretend you had a million dollars in mutual funds in your 401k how much have you got just in 401k or all total all total about 1.7 million okay cool I was guessing outright okay so way to go congratulations you did it okay so let's say you bought a crazy but $100,000 car okay okay and you didn't even put insurance on it and you forgot to set the brake and it went off the cliff and burned now you're worth 1.6 million well whoop-dee-do pee now that's the kind of a bizarre example but I mean if you just completely set $100,000 on fire in your backyard and watched it burn you winner that wouldn't change your life at all okay so you can splurge like that and it you know but now if you start talking about you're gonna spend 800 grand on something crazy that's half your freaking world we got to stop and think about this one right you see what I'm doing now I've got a friend that's working I got a friend that's worth 200 million Wow so him buying a $200,000 car is like most people buying a biscuit mm-hmm right ratio wise it doesn't matter it doesn't affect his life and yet you know where I grew up in the way I grew up no one should ever spend that on a car well he makes he's got hundreds of millions of dollars it's irrelevant he gives more than that in charity in 20 minutes the ministries he supports with zero zero zeros on the end and he has a nice car and people gripe at him about his car of course you know but the guy's got you know it's a small percentage of his world so the way you know you're not screwing up is if you set fire to that much money would it screw up your life okay and so if you want to go on and you've always wanted to take a cruise around the world it's $28,000 or it's or it's a hundred and twenty eight thousand dollars you can do it and enjoy that vacation and it really will not affect your life you've earned the right mathematically if you want to give that much to somebody do you find the charity you a ministry and God says for you to you know let's let's build this thing a small house over here for 100 grand or something you can do that and it will not affect your life but that's how that's how we gauge it is if after this thing if it just was set fire to are we still okay are we still did we even notice and if the answer is no then we're not spending too much on that and so okay does that make sense yeah but you don't really have like a percentage that you know I would just say you know I mean it's kind of a common-sense thing though if it's approaching fifty percent it would be too much right this proves to me how cheap I am I'm just looking at splurge and maybe spending fifteen grand yeah you're too cheap you need to go buy that today this is why you did all this you've worked your butt off man you came from nothing and you have 1.7 million am i right correct no one gave you this money you didn't hit the lottery you've been working your butt off and being diligent you've earned the right to enjoy your money I used to work 60 hours a week yep I know you you don't get to have 1.7 million working 30 hours a week you know correct you're an every day millionaire you fit the typology exactly and all I'm doing is saying yes you you you not only have permission you almost have the emotional obligation to treat yourself to some things and you need to make sure you're doing some generosity things that match that to be there and I get more joy out of that than I do being the selfish person buying it for my personal cell absolutely so that's another thing we do is if we spend $15,000 on item we might go buy 3 used cars for single moms and spend 15,000 on them sometimes we match ourselves and maybe that's just because we're you know so we don't feel guilty or something but maybe it's also just keeping us in balance because if you got generosity of spending running about the same level and neither one of them are draining you down to where you're broke you're living a good life okay thank you very much for your hey I appreciate getting to talk to you thank you for letting me get up on my soapbox because here that's something wonderful because I don't get to take that call very often most of times you guys are on the other side you're trying to learn to be that guy you want to be him when you grow up but live like no one else so that later you can live and give like no one else no discipline seems Pleasant at the time but it yields a harvest of righteousness scripture says the diligent prosper scripture says not the lazy not the ones who run their mouth the diligent dream what do you say 60 hours a week I heard it great place to go when you're broke to work

Channel: The Ramsey Show Highlights

Views: 793,863

Keywords: the dave ramsey show, budget money debt cash, real estate, insurance, how to make money, dave ramsey, save, credit card, compound interest, buying house, buy, snowball, debt, budget, money, frugal, finance, saving, cash, spending, spend, debt free, debt freedom, wealth, splurging, live like no one else, give like no one else, net worth

Id: 9c64GGJKzxE

Length: 7min 41sec (461 seconds)

Published: Fri Feb 21 2020