Pay Off Debt Using the Debt Snowball

[Music] so as you know most of you that listen regularly we've been on the air now for a little over 25 years even before I was on the air I was teaching people about money when I first started this stuff I'm a math nerd I've got a degree in finance I had all the letters and licenses after my name and all the different things and you know I was real concerned about the math really concerned about the math and I would sit down with people and show them how to get out of debt and they would go home and promptly not do it it was really frustrating I and I started figuring out that hope has more to do with you winning with money than math does because hope gives you what's fuel on the fire it gives you a reason to make changes a reason to do something you've never done before and really what we're saying here is is that personal finance is about 80-percent behavior it's only about 20% head knowledge and math the problem with your money is not your math probably your money is a person in your mirror they're screwing up everything I can get the guy in my mirror to behave he'd be skinny and rich right that's what I figured out so I quit telling people to get out of debt paying off the highest interest rate first I start teaching people we started calling that we started calling we started calling the debt snowball and that's a real you know real tough metaphor to grasp you list your debts smallest to largest you pay minimum payments on everything but the little when you attack the little one with a vengeance scorched earth lifestyle sells so much stuff the kids think they're next take 16 extra jobs name the dog eBay and put him there put the cat on Craigslist we're getting out of debt we're getting out of debt and you pay everything you stopped all investing temporarily and completely focus all your emotional spiritual financial relational energy on that smallest debt everything goes on that when that one's gone you take the payment that used to be there and any other money we can squeeze out of our budget and we throw it at number two and when that one's gone then we take the payments from one and two the snowball rolls over again it picks up more snowing you attack number three the average person for the past 25 years that has done that with great focused intensity intention ality gone crazy to the point they're broke friends and relatives thought they needed counseling they shaved their head that drank the kool-aid they get out of debt in about 18 to 24 months everything but their house that's the average now some of you got a lot of debt it takes you five years some of you get out of debt in four months but the average is between 18 and 24 months it works millions tens of millions of people have gotten out of debt debt-free screams alone on the air here last year were forty nine point eight million dollars that's kind of like 50 million dollars and that was just the ones that screamed on the air other people just stood in their backyard and screamed and that work too you know you want to come on the air for it to count you're out of debt shut up Dave you oughta the wave Ramsey our Sargon's Witter Dave Ramsey doesn't teach the most optimum way to get out of debt the most optimum way to get out of that is to list you paid off highest interest rate first says the on Twitter I used to be that I tried that the problem is it doesn't work so let me explain to you what optimum means optimum is the one that works not the one that's mathematically correct honey if we were doing math we wouldn't have credit card debt to start with this is not a math problem this is a you problem it's personal finance it's more behavior it your success with your finance has more to do with you getting along with your spouse and being on the same page than it does mathematics you can be a freaking math genius and you and your spouse aren't on the same page and all of our data tells us you will not win with money you will not build wealth you could not build wealth in spite of a princess or in spite of a prince who spends money like they're in Congress I can't do it you can't make enough money to outspend stupidity or outturn stupidity I tried it not my wife I was the stupid one I always thought if I just made a little more it'd be okay no I had to learn to control what I had so we start teaching people class called Financial Peace University the class is about 25 years old start teaching it with an overhead projector in a bad suit was $569 to go through the class four people came the first night three of them bought $569 the class was 26 weeks long from everett 13 lessons come every other week for six freaking months got stopped by here the other day that was in that very first class good to see him I hadn't seen him in a long time we got to be friends he his wife and yeah hi and he's a multi-millionaire now by the way why because I gave him money I didn't give him any money I just showed him how to do it and he did it he followed the steps that we teach in Financial Peace University not only the baby steps not only the debt snowball but also started investing in good mutual funds over a long period of time that's 25 years he should be a multimillionaire you do this stuff it works that's what popped him um is morons you people that are calling me out and it's not optimum let just tell you optimum is what works that's what's optimum not what's mathematically correct I understand that that snowball is not mathematically correct and I don't really care my math nerd down the side of me cringes but I don't really care what matters is what works how it allows you to change your life Financial Peace University now includes every dollar plus a year where you connect to your bank it now includes you get a 1-year access to the online assets meaning you can watch the videos and audios and everything else all online for a year and of course now it includes free shipping it's only a hundred and twenty nine dollars it includes the kit you can join a class in your area by the way you're almost too late don't be too late it's January we have sixteen hundred classes starting this week next week so you need to get your kit like right now there's over 5,000 starting in the month of January alone next week there's sixteen hundred starting so you need to jump in there and get your Financial Peace University kit get in your local class in the area use the online stuff all the every dollar which is the world's best budgeting app it's all included this is the best deal we've ever done on Financial Peace University it does not get any better than this and here's the trick its optimum because it works check it out Dave Ramsey comm back with your calls right here on the Dave Ramsey show

Channel: The Ramsey Show - Highlights

Views: 1,028,352

Rating: 4.907341 out of 5

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Id: Q5jlY8_WmEE

Length: 7min 53sec (473 seconds)

Published: Tue Jan 09 2018