The best thing that has probably ever happened to me financially was that in college I interned at Dave Ramsey's company. If you don't know who he is, I'll tell you. Dave is a financial guru and founder of The Lampo Group, based here in Nashville. His radio show broadcasts to thousands nation-wide, and thousands more have read his books.
When I was applying for the internship, I didn't know much about Dave at all. I read his bestseller, "Total Money Makeover," and did some other research to learn more about his and his company. It totally changed my perspective on money, saving, and spending wisely!
Dave and his ideas can be somewhat controversial - he's very black-and-white about most financial decisions and can be oversimplifying when it comes to real life situations. Unfortunately, I think the average American has a seriously dysfunctional relationship with money and needs a financial slap in the face to set them straight.
I'm mostly grateful that Ben & I read this book and adopted some of its principles before we were even married. We decided that we wanted to try to go for the first year of our marriage without a credit card... four years later and we've still never had one! In fact, with the exception of our house and Ben's car (both of which we are paying off fast and furious), we don't owe anyone anything. Not a penny! It is thoroughly freeing!
Seth Godin (a marketing blogger I follow) had a great post last summer about finances, in which he said,
Only borrow money to pay for things that increase in value. It's a short list:your business, your house and your education, mostly... If you have credit card debt, you're in big trouble. Your bank account has a huge leak in it, and it's getting worse. Hence the urgency. If you have credit card debt, that means that every time you spend money (even cash), you're borrowing money to do so. And so, if you're going out to dinner or buying a new pair of shoes... you're spending borrowed money on stuff that is decreasing in value.
It's simplistic, but true. Dave often puts it even more bluntly... if you can't afford it, don't buy it! Or save up cash until you can. It's an antiquated idea in current times, but one that our grandparents and great-grandparents understood well. The very modern notion of instant gratification is alive and thriving in the way most of us spend money.
I don't mean this to sound condemning to anyone who does have credit cards or loans - I'm sure there are good reasons out there to have one and many responsible people who can use them wisely. I'm just sharing how we've been able to do without and what that looks like for us.
So what's the best financial advice you ever received? Who is the most financially sound person you know and how have you benefited from observing them? What about financial habits you need to nip in the bud? (I'll confess ours... we eat out WAY too much!) Now it is your turn... let me hear from you in the comments!
