Dave Ramsey Brilliantly Explains How to Build Wealth | KOSHER MONEY

I do anything I can to trick myself into being disciplined, automatically drafting out of my checking account and going into a mutual fund. I've got that set up today. Boom, just hit that checking account. You know why not? Because 100% of the time that you don't have a plan for your spending, you overspend 100%. Because you don't think about the kids' activity fees at school, you don't think about the book I got to buy, a gift for the bar mitzvah for next month. You don't think about stuff like that until you sit down and go, "Okay, where's our money going to go this month?" Turns to his wife and says, "Honey, I think I want to splurge. Maybe we'll tap into the home equity and, uh, spend a little bit more on the bar mitzvah." Borrow money for a party? You heard that? No, you don't borrow money for a party. That's not religious. That, that's prestige and childish. Hey Ellie, do you want to build wealth? Who doesn't? But what steps do you need to take to accumulate money, and what common mistakes do people make that cause them to fall behind financially? We visited the great Dave Ramsey in his studio in Franklin, Tennessee, to explore his famous baby steps and how millionaires are made. We hit him with some awesome questions. We had a very compelling 40-minute episode, and we saved the fun ones for the end. You're going to enjoy the advice he shares. Let's get to it.

Being a Jew, awesome. Managing personal finances, not so awesome. Welcome to Kosher Money. We're back with the one, the only, Dave Ramsey. Dave, how are you? Better than I deserve. How are you? I do actually want to get into that, because my brother said when he says, "Better than I deserve," ask him what he deserves. Really appreciate this. So, I, I want to start with the baby steps. There are many, many people, tens of millions of people, literally in America and beyond, that you've helped, um, get out of debt, become educated, more financially secure. Probably many of them you'll never see in your life, but the ripple effects are there, and the asked for generations, and it's already started, right? You know, I'm sure you've spoken to people that, you know, "Hey, my kids, you know, it's my grandkids now." For those unfamiliar with the baby steps, let's walk through them. Well, what happened was, when we first started teaching this stuff a million years ago, it feels like now, uh, with an overhead projector and a bad suit, I would sit down, you know, in a small group discussion with these folks, and they, we'd go, "Okay, I get it. I should get out of debt. I get it. I should have an emergency fund. I get it. I should have life insurance. I get it. I should have a retirement plan." But where do you start? And so we took really these common-sense principles and biblical principles of, live on less than you make, be out of debt, have a plan, invest. We've got to give some kind of forced ranking on it, a way to get started. How do you eat an elephant? A bite at a time, you know? And so we sat down and said, "Okay, basic financial planning says that you ought to have an emergency fund, really, before, before you start your long, big-time investing." Okay, that's good. That's standard financial planning lingo. That's not something I invented, of course. I, I figured out real quick and was had this penchant for getting people out of debt, because if they can be out of debt, they have money to invest and money to save and money to be generous with. I want to get them out of debt. So I thought, "Okay, first thing I did was, before the baby steps, I just said, 'Alright, everybody, just get out of debt. Just stop doing everything until you work the debt snowball and you get out of debt.'" Well, that didn't work, because they would have this little, uh, $400 event, and they had no money, and the alternator would go out on the car, the tire would blow on the car, and they can't get to work, and they're like, "Dave, I quit. You're crazy. I'm not doing this." So I, I kind of said, "Okay, well, let's start with $1,000. Let's have a little miniature, not even, not adequate, but a little bit of a buffer account, a little bit of a rainy day fund." So we started with $1,000. Then we said, "Alright, let's get out of debt. Everything but the house, 'cause the house is big, and let's push kind of to the back, and let's get some other stuff going before we knock it out." So we kind of just developed this pecking order. So the baby steps are, there are seven of them. I guess my point is, early days with actual hands-on, tactical work, we, we iterated them, we, we polished them to make them work, and they do work now, and they work beautifully. Uh, and I really don't deviate because they work. So, number one, first thing you do, quickly save $1,000, like in a month or less, or maybe you've already got $5,000, so earmark $1,000 of that and set it aside. Whatever, save $1,000 bucks. That's baby step one, a little starter emergency fund. It is not adequate. It's not designed to be adequate. You, you should just do that, just to get started. And let's then, let's tear into this debt hard. Debt snowball is too. Pay off all your debts except your home, using the debt snowball, listing your debts smallest to largest, paying minimum payments on everything but the little one. Attack the little one with an absolute vengeance. Go crazy. And when the little one's gone, you go after the next one, and the next one, and the next one. You take all your money that's not in a retirement account, you throw it at these debts in that order. Clean up all the debt, because when you don't have any payments but a house payment, in the average American family, you've got serious margin. Now you can actually get some traction. And when you get out of debt, everything but the house, then in the next three months or four months, you should take that thousand account in baby step three and raise it up to three to six months of expenses of a household income. Save for a rainy day. Grandma said that, "Be ready for emergencies." Uh, well, you know, Dave, you should be positive. I'm positive there's going to be emergencies, okay? You should be ready. So now you've got an emergency fund of $10 or $15 or $20,000, whatever that number is, is three to six months of expenses, and you don't have any payments but a house payment. Man, right there, people chill. You can exhale. That's a pretty good place to be. And then baby step four, five, and six, you do simultaneously with intentionality, not intensity. In the early ones, you do it with intensity, like you sell so much stuff the kids think they're next. I mean, we're going crazy in the early ones because we got to get the mess cleaned up and get that foundation laid of that emergency fund. Then baby step four is 15% of your household income, of your gross number. So if you make $100,000 household income, $15,000 should be going into retirement. Uh, not more, not less, not 10%, not 22%, because we've got some other stuff to do. Five is save for kids' college, and that's very dependent upon kids, how old they are, where you live, what your, what your goals are for the, all that. So it can be anything from $50 to, oh my gosh, they're seniors, you know, that's going to be a mess. So, so five is kids' college. Then six is any other money we can find in the budget while having a life, we throw at the house, and we pay off the home. We find that families working this, The Total Money Makeover book is the book that outlines these, have been typically paying off their home in seven or eight years from the time they start the whole process. You know, again, that's average. So some people take 10 or 12, but you don't have people staying in debt for 30 years. They knock out the house. And then baby step seven, all that's left there, you don't have any payments of any kind. All that's left now is build wealth and be ridiculously, outlandishly generous. That's baby step seven. And somewhere in four, five, six, and by the time they get to seven, folks generally hit a million-dollar net worth. And that's where the book, Baby Steps Millionaires, came from, the last book I did, because I kept seeing these people, as you said, generationally now showing up, and they're going, "I've been following your stuff for 12 years, and, you know, I've got $1.6 million net worth, and I have no payments, house or anything, and I'm 46, or I'm 37, or I'm whatever." Wow. Wow. They're everywhere. Look at this. That's cool. Thank you for laying all this out. Does your head ever hit the pillow and you're like, "Ah, eighth baby step?" Nope. So this is, this is tight. This is secure. This works. Yeah. The, the only thing that's happened is beyond the baby steps, we've done some other stuff. You know, when you really start building wealth, and we've met with, uh, families and how to, you know, people get concerned about if you, you know, if you have a $5 million or $10 million net worth, how do you not mess up your kids? Or, you know, we get, we get some stuff like that, or the spiritual, you know, "You're going to hell if all rich people are going to hell," and all this kind of stuff, and people that misread scripture and that, you know, decide they have a political agenda instead of common sense. And all this kind of stuff. So we've done a lot of stuff post-baby steps in terms of writings, and I did a book called The Legacy Journey and that kind of thing. But really, there's not a lot to do there. When we did the study of millionaires, we found that the first $1 to $10 million of net worth, people that have anywhere from a $1 million net worth to a $10 million net worth, it's mostly, I mean, it shows up like 80, 90% of the time, it's a, it's a big old retirement account, big old 401k, and a big old paid-for house. And so the house is worth $7, $800, you know, million, and it's paid for, and the retirement account's got $7, $800 in it, and so they've got a million six or a million nine net worth or whatever. And that, that's where we found, gosh, like thousands and thousands and thousands of those. They're everywhere. I noticed you didn't say they got rich off credit card points. No, no. None of them. None of them got rich leasing a car. None of them got rich borrowing money on their house to invest, playing Bitcoin. And I haven't found those people. I mean, occasionally I run into one who hit the lottery, but it's not, it's, uh, it's so statistically rare that it's not a proof text as a formula you want to follow to get there.

I want to get a little bit more of your guidance on some of these baby steps. So you mentioned putting money into retirement. What does that mean practically? Where, where are people going? What, what are they doing? Does that, are you referring to IRA, 401k? What, what does that mean for people listening? Well, mathematically, what we teach people is kind of a rock, paper, scissors thing. Only, only goes one direction. Uh, there's only one way to win, and that's matches first. Take all the match you can get. So if you got a match at your 401k or match at work, right? You take all the match you can get. And then second, you want to do Roth, which is tax-free. And there's 401ks, 403bs that are Roth, and of course, there's Trad, regular individual Roth IRAs as well. And then third, you would do traditional, which is not tax now, but it's tax when you take it out. Causes all kinds of problems if you build a lot of wealth inside a traditional and you, you know, get $10 million bucks in a traditional and you hit 72, you've got all kinds of other issues. It's a problem. So that's the order that we would go at. And then I use and I suggest and have for 30 years, four types of mutual funds inside of those accounts: growth, growth and income, aggressive growth, and international. And so practically, if you have got a good 401k that has decent options in it at work and they have a match, do that, especially if it's a Roth. So you got a Roth 401k with a matching good mutual funds, boom, load that puppy up, get to 15%. You're ready to go because you got your match and you got your Roth and you got access to good mutual funds and it's very simple. Then everybody gets into all these details, but what we find is is that it's not necessarily the people that pick the best mutual funds, it's the ones that actually go do something. There's a lot of people discuss things and never do it, and they have all these theories and they're broke. Uh, and so the doing of it, the actual, "Okay, get out of debt, get signed up, start putting 15% away," because if you make $70 or $80,000 bucks and you put 15% away, you know, from age 30 to 70, you're going to have like $5 million bucks in that one account. That's, that's if you never get a raise. It's crazy. So, yeah, just get after it.

Are you a big believer in automation? Meaning, we have the technology now to sit down one time and sort of just automate that if I receive X, Y is going towards a mutual fund. Yeah, I do anything I can to trick myself into being disciplined, automatically drafting out of my checking account and going into a mutual fund. I've got that set up today. Boom, just hit that checking account. You know why not? Used to be a house payment, now it just goes to mutual fund, right? That's, that's easy. So, yeah, anything I can do to trick myself into having instant discipline, or, you know, set up the account online and it has a draft feature to it or whatever it is, I mean, I don't care. But, and that's the 401k comes out your check before you see it, you know, so that's very easy. If you're going to set up a traditional IRA or a Roth IRA as an individual, set those up as an automatic draft so they come out. Don't wait. "I'm going to do it once a year." Oh, it's very hard to do. Just have it come out monthly and don't think about it again. Same thing with your kids' college.

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And now back to this week's episode. For someone that has a larger monthly expense line item, right? You mentioned, you know, $15,000 over three months. If let's say their monthly expenses are $10,000 a month, $15,000 a month, and we're talking necessities with higher costs of education, things like that. Is it still three to six months? Is that where maybe you're on the lower end of that range, where saving up is maybe three months, not six months? If it's more, there's a couple of things that would lead you towards three months. One is if you've got, uh, very stable incomes. If you know one's a teacher, one's a police officer, those are very stable incomes, okay? One's a real estate agent and it's the only income, six months. Okay? Self-employed, six months, right? Uh, so you, you know, you got to get over there because the different types of things that can come at you. It's not just job loss that comes at you. It's the transmission goes out in the car. It's, uh, a relative passes away and you need an airline ticket to fly to Seattle. I mean, I don't, these things that come at you that you, they're unexpected. And so by definition, we don't know what they are. And so I want to be ready for those. But what is weird is the, once you get the fully funded emergency fund in place, the number of times that statistically someone would actually use the whole thing, it's almost never. It's almost never. And all the little things, when you first get started and your life sucks, you know, and everything's going wrong, everything that can go wrong will. I mean, the dog got hit in the street, and the, the wife ran off, and it's like, I mean, everything going, it's like a country song, you know? And so every, uh, every little thing that can go wrong will. When you start budgeting and, okay, now we're planning for, you know, holidays, we're planning for a vacation, we're actually planning that the kids have activities at schools, we're planning for tuition, and these things really, you know, we're actually setting money aside to be ready to do car repairs because cars break, 100% of them break, you know? So this idea like it's a surprise, it's not a surprise. So my point is, is that you, by budgeting and getting the chaos out of your life, the number of actual emergencies, what we used to call an emergency, is no longer an emergency because now we've taken care of it. And so the number of times you actually use your emergency fund, I, I've never even touched mine in 30 years. I've never touched it. Isn't that weird? I mean, part of it is my wife won't let me, 'cause she's just had too many emergencies before with me. But the security that it gives you, you go, "I'm not, I'm not going to touch that." You know, "Okay, the roof's leaking." "All right, well, we will patch the roof for $400, and I'm going to save for three months and pay cash for it. I'm not going to use the emergency fund." You know, "I'm going to leave my emergency fund." You know, once you get it, you don't want to let it go. So, you know, the three to six months, it becomes irrelevant because you're not really using it. And that emergency fund is sitting in a high-yield savings. Just throw it high-yield savings. Yeah, it's not for investing. MH. It, it's an underperforming portion of your life. It's there just for comfort. It's more like insurance. Insurance costs you money to protect the things that make you money. And so you got homeowners insurance, house is going up in value, we're protecting the house that's, you know, but insurance costs you money. It's defense, it's not offense. And your emergency fund is defense, it's not offense. Got it.

Okay, so we have a few questions. I mean, you were probably about 300 that came in, but I, I got to be selective. Um, maybe we'll do a round three next year. But I, I'll start with this question. In my community, private Jewish school is a top priority and considered non-negotiable. Reports and anecdotal evidence suggest that some families may spend 20% of their gross income, 30 to 35% net, on education, especially in areas like ours with high tuition rates. So when you think about education, what percentage of income should one ideally allocate towards education if it's a priority? And really, how do you think about priorities when it comes to spending and budgeting? Well, a private Jewish education has a different, uh, context just in the open market. If someone says private school, it's generally for safety, or it's for increased academic performance, or it's for religious reasons because they, you know, Catholic school, Jewish private school, they want to be in a Christian school, they want to be in with values and teachings that are consistent with what they get, they're getting at home, and they don't want some of the filth, trash, and nastiness that's out in the open market invading their kids' brains. And completely understand that, and I completely agree with it. The problem with the last one is the only one that you can justify being irrational about. It's mathematically irrational. Safety, I guess you could. But academics, there's no data that backs that theory up. People that go to private kindergarten, the level of them that are successful versus the ones that went to public kindergarten, there's no data to back this up at all. None whatsoever. You go through the fancy-pancy private school that everybody thinks is a big deal academically, and it gets you into that other college and whatever, you can't find any study that shows those people make any more money in life. It's their character, their work ethic. Yes, you need basic knowledge and you need a good education, but this idea that, you know, we're going to pay twice as much because this school is really special academically, there's no research to back that theory up. There's just, just not. It's just absurd. But, but we all parents, we love to talk about it because little Junior is a, he's a smart kid, she's a smart girl, you know, that kind of stuff. I mean, my, my grandkids are brilliant, you know, I mean, come on. But if you say, "Okay, you know, I'm in the Jewish community, and so it's a non-negotiable that we're there." Well, then you just, it's non-negotiable. So you put, you know, you start talking about 20% or 25% of your household income going into that. Mathematically, you, it's ridiculous, but it's a non-negotiable. So you can't, you can't really debate about this. It's, it's what we're going to do. And because this matters to us more than almost anything else, and that, that's what we're saying. We're prioritizing that above a healthy retirement account, above a healthy college fund, above, um, getting out of debt faster or staying out of debt, you know, because you're putting yourself in a position that you're in a pinch all the time. And so you just need to say out loud that it means so much to us, and that's an okay thing. It's personal finance. It's a call. I, I took a call on my radio show last week from a guy, a Catholic family, and for him, it was the same exact thing. It had nothing to do with the safety, his kids are safe. Had nothing to do with he thought the academic performance was substantially better. It might be better, but it's not enough that it mattered for the money. But he's like, "It's not negotiable. We're Catholics. Our kids are going to Catholic school." Okay, then you're making that decision. Say, say that out loud. And really, we're putting that right after food. We buy food, then we're buying this, and then we figure it out on everything else after that. But you're just saying out loud, "It means so much that we're, we're willing to put a pinch on other things."

Which leads me to my next question. And we talk about celebrations in the community, right? Bar mitzvahs, weddings. And as much as they're a priority, I do want to preface with the fact that there's no biblical commandment to have the biggest bar mitzvah in the world, right? There's no biblical commandment to have a 20-piece band at a wedding. No. That that has nothing to do with religion. That has to do with, "I want to be a big dog and throw a big party." That's all that is, right? So, so, you know, the societal pressures, right? We all live in a, a very tight-knit community where someone down the block who's a surgeon, pulling in $2 million a year, is sitting at the same table at the synagogue with someone who might be earning, God bless him, and it's great, $85,000 a year. Yet they're each going to each other's bar mitzvahs, and they don't look the same. They shouldn't. And you need to get okay with that. I mean, because again, that, as you point out, that's not a religious thing. That's a prestige issue. They shouldn't drive the same car. They shouldn't live in the same house. They shouldn't go on the same vacations. It's okay. Okay, you make less. It's okay. No, there's no shame whatsoever in that. So, I mean, to, to try to measure up or to compare yourself to other people in that regard, that has nothing to do with religion. That's just the, the community where I'm intersecting with people that have, have different means than I have. And, oh, by the way, the surgeon shouldn't be a jerk about going to the bar mitzvah, uh, with the $85,000 guy's kid. I mean, we're going to go over there and go, "This is awesome, right? Celebrate with you, and we love you. We're going to dance just as hard here as we did at the other one." And we spend a little more on that band, but whatever. You know, I mean, it's okay. And, yeah, but this is the beauty of a community where it's not just $2 million people hanging together, or not just $85,000 people hanging together. You get this beautiful interaction, but one's not shaming the other one. The other one doesn't feel, "I'm doing what I can with what I have."

What would be your message to the person who is on the lower end of that economic scale, and he's, his house value has gone up, and he turns to his wife and says, "I think I want to splurge. Maybe we'll tap into the home equity and, uh, spend a little bit more on the bar mitzvah." Borrow money for a party? You heard that? No, you don't borrow money for a party. There's again, that's not religious. That, that's prestige and childish. It hasn't got anything to do, you can't blame that on, uh, Judaism. You can't blame that on Christianity. You can't blame that on, you can't. There's no, there is no basis. That's just, that's just being an American, you know? That's just, "I want to spend money I don't have to impress people I don't even really like." I mean, come on. No, we're not borrowing money for a party. I'm not borrowing money for your wedding, honey, baby doll. I love you, but no, we're not doing that. But Dave, you know, the party tonight is going to be drastically different than the party we saw last night. Dave, such is life, my child. You know, and, and teach your kids that, uh, that it doesn't matter how big a jet you have. Park it at Teterboro, and there'll be a bigger one from the Prince of Dubai roll up. Come on. You, there's no way you can keep up. There's even in that world, you know, you can't keep up. You've got to get the sense of contentment, contentment and comfort. And it's not lack of ambition, it's satisfaction. I'm just going to sit in what I have and go, "God has blessed me, and I'm going to smile, and I'm going to enjoy that, and I'm going to be a good manager of what He has blessed me with." And kids pick up on that, right? Oh, yeah. You're, because what you're ingraining in them is, "Okay, you use good wisdom, unless there's a party involved." What are we teaching them? It's like, we're going to be very wise and very frugal and good managers, unless, you know, and here's the one or two areas that you can lose your mind. No, that'll set you back a decade. So true.

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Someone writes in, "When it comes to home buying, you recommend putting down at least 20%, choosing a 15-year fixed-rate mortgage, and keeping monthly payments under 25% of take-home pay. We have expensive areas like Monsey, New York, where the average house costs around a million. How can someone manage these challenges without exceeding your recommended housing cost percentage?" I guess the question is, would you consider adjusting the guidelines, such as allowing for a 30-year mortgage? And I will preface to say, and I think this is important for people to hear, they don't have to live in Monsey, New York. They choose to. There are beautiful Jewish communities outside the tri-state area. But I think Dave needs to give them a little bit of rice and beans, obviously kosher rice and beans. Um, I think people, you know, sort of get into this mentality that, "No, I got to live where I grew up, and there's no other answer." Yeah, the guidelines are not there from me. What matters is not the actual guideline. What matters is why? Why would you tell somebody to not have a payment more than a fourth of their take-home pay? Because I talked to a guy yesterday on the air who had a payment that was 50% of his take-home pay, and he was losing his house. So every notch you go above 25%, then you don't have the room in your budget, what economists call disposable income. You don't have any margin in your budget to save to buy the next house, car, to save for your kids' college. So every other thing in your life, because you're house-poor because you pay, made your payment too high, every other thing in your life starts becoming a debt looking for a place to happen because you're squeezed. So how are we going to buy a car? Oh, we, when I ruined my car, so now we're growing in debt on the car, and now we, we've gone backwards on the whole thing. You know, that we had saved for the kids' college, so now we got student loans. We haven't saved for vacation, so we're going to pay, you know, we're going to put the vacation on credit card. Uh, we haven't saved for, because there's no room in the budget because we said, "Well, math doesn't count in New York." Math works everywhere, baby, and it works exactly the same everywhere. So it's not like, "Would Dave change his guidelines?" They're not my guidelines. It's just when you don't have any money left 'cause you spend it all on a house payment, you don't have any money, and you set yourself up to fail in all these other areas. You know, maybe you didn't keep the right insurance in place, and then you have a real problem, becomes a million-dollar issue, you know, that kind of stuff. And this is what I run into all because people said, "Well, you know, in this situation, I don't think that math matters." Of course, math matters. And so it's not Dave's guidelines. It's not like Dave needs to get a life, you know, he's out of touch. It's not, not out of touch. It's a math thing. It's a math thing. So you decide if you want to get squeezed or not. And the same thing's true with your car payment. I mean, you go get a car payment is $500, you don't got any room in your budget. And then the bar mitzvah becomes a home equity loan because there's no room to save for the party, you know, and do the party within our budget. That kind of thing. So all these things interplay. The only thing in there that, that I'd clarify is, um, we don't tell folks that are first-time home buyers that they necessarily have to put down 20%. The reason we bring up 20% is, okay, get on a conventional loan. The reason for 20% is, is that if you put down 20%, you avoid PMI, private mortgage insurance. The mortgage companies require, if you don't have an 80% loan-to-value ratio or less, that you buy them foreclosure insurance because they don't have, you didn't put down as big a down payment, you're a bigger risk. So you have to buy foreclosure insurance for the mortgage company that if they get for, if they have to foreclose on you and lose money, this pays them. So it does nothing for you. And that's PMI, private mortgage insurance. It's foreclosure insurance you buy for the mortgage company because you don't have much equity and they're more scared. And, uh, that costs about $75 per $100,000 per month. So we're talking $225 a month for a $300,000 mortgage if you don't put down 20, just to buy insurance that does you no good whatsoever, just because you didn't have that down payment. So that's why I recommend it. But I understand if people put down 5% and come back later, get the loan-to-value ratio paid down and drop the PMI, you can do that. That's okay. But all of these things enter into then, you know, are we going to put ourselves where we have a monthly pinch? What we call house-poor, where our house payment is so big, it's affecting all the other categories. The 15-year thing is very simple. And all the data that we have on people who build wealth, become millionaires, one of 10 million, like we discussed earlier, the data tells us, again, almost every single one of them we talked to was a paid-off home and a big, good, juicy retirement account. That's where their first $1 to $10 million of net worth comes from. And so if you keep a mortgage your whole life, you're supporting mortgage companies, not yourself. And so the idea being, take out a 15, and then work the steps like we said early in the podcast here, that, that get the house paid off in 10 years or seven years, and then when you don't have a house payment anymore, now you can move on. So if you do all of that, and you do it with a house that's a little bit cheaper than, than you, you know, than you dreamed about, and you buy a $600,000 instead of an $800,000, or you buy an $800,000 instead of a million, or whatever the number is, right? Uh, and you look up a few years later, you're going to be really glad that this whole thing's paid for, and it went way up, and you're going to feel like a genius because you are. But, you know, a one-eyed man in the land of the blind is the only guy seeing. So you're okay. You're way, it's, you're not a genius, but you just had common sense in a land that where there is none. You know, common sense is so rare, it's like having a superpower. So that's what this put you up as. The thing is, are you willing to delay pleasure to win? Are you willing to wait to win? Because almost all winning involves sacrifice and waiting. And one psychological definition of emotional maturity is the ability to delay pleasure.

Someone writes in, "And sticking to the housing questions, many people find that after a few years, their mortgage payments are similar to what they would pay in rent. How would you explain why you might still be opposed to taking on a mortgage in such a case?" A mortgage in what? So again, if someone was to possibly not be able to afford a home, right? And they're renting, and they say, "Hey, if I don't buy a home right now, my rent's just going to go up." Yep. So in two years, if someone was to buy a home, they're going to be paying their monthly mortgage, whatever I'm paying in rent. Oh, I see. So let me lean into the, let me lean into the home purchase even though I might not be ready for it just yet. Yeah. Well, you know, when you buy a home and you're not ready, it's not a blessing. Everything that can go wrong will. You know, that's why they call them brokers. You get broker and broker. I mean, it's a problem. And the people that, that I meet that, that wish they had never thought about real estate, the ones that bought a piece of real estate and they still had two car payments and student loan debt, and they had no money saved, and they barely got in, but they did it all in the name of, "Well, my payments must be the same as rent. Why wouldn't I do this?" Well, because you're broke, that's why. And owning a house is not a good idea when you're broke, 'cause owning on a monthly basis is more expensive than renting initially, because you've got maintenance. As soon as you move in, the hot water heater's going to go out. I mean, just, this is like, I'm not being negative, it's just how life works. And if the hot water heater goes out, and you're renting, you call the landlord. It's his hot water heater, right? This idea that, "Well, the payment's the same as rent." It's not. It's not the same. But it's still a good idea to buy a house when you're ready. So when you've got your emergency fund in place, and you don't have any payments, and you're living on a budget, do it on 25% of your take-home pay on a 15-year. I think you ought to buy.

Someone says, "I understand the importance of budgeting, financial planning piece. My wife doesn't understand that concept or the peace of mind it brings. What should I do?" What we tell folks to do on stuff like this is, um, try it for 90 days. Really try it. Not being passive-aggressive, but I mean, really try it. Really try it for 90 days. If you hate it, quit. But here's the thing. I have never met anyone in any area of their life, whether it's their career, their education, their spiritual walk, their, um, wealth building, that wins accidentally. Winning is a series of intentional acts over a period of time. If you're going to take care of your physical body, it's a series of intentional acts over a period of time, most of which are unpleasant at the time, but yield a greater pleasant. You know, they're worth the sacrifice, right? You pay a price to win. And so try it. Try it because no doing nothing is chaos, and God's not a god of chaos, He's a god of order. And so put your house in order. Your Bible, my Old Testament says, "The mind of man plans his ways, and the Lord directs his steps." And so it's very clear. God's a planner. "I know the plans I have for you," He says, right? And yet we're going, "Well, I don't need a plan." Well, of course you need a plan. Of course you need a plan. You need to lay out a plan. Will it work out the way you plan? No, but at least you had a plan, and you had something. You plan because 100% of the time that you don't have a plan for your spending, you overspend 100%. Because you don't think about the kids' activity fees at school, you don't think about the books, you don't think about the, "I got to buy a gift for the bar mitzvah for next month." I got to, you don't think about stuff like that until you sit down and go, "Okay, where's our money going to go this month?" And it increases the quality of communication. An old magazine called Redbook did a survey many years ago, and I think it's just hilarious, but it's still somewhat true, and they were, uh, surveying ladies, of course, in this magazine, and they found that 97%, that's all of them, of the women that they interviewed would like to have higher quality communication with her husband. Well, ladies, let me tell you something. Men speak budget. We speak budget. We get that. We might not be able to sit down and have all these things in our heads with unicorns and Skittles and rainbows, but we can sit down with a spreadsheet and go, "Okay, our children are important, so we're going to look at this education thing. Our food is important, so we're going to look at that." Men can talk to you about your life. You'll increase the quality and the amount of communication dramatically in your marriage, and therefore increase the quality of your marriage if you budget together. Isn't that weird? Because when we plan together, you know, we're really planning our dreams, our fears, we're talking about our values, we're talking about our future, we're talking about our past, we're talking about the, you know, frustrations we've got, we're talking about joys that we have. They all show up, right? They're on that page.

We'll be right back to this week's episode. But first, if you donate to the poor in Israel or anywhere else for that matter, do you know the first place they likely spend that money? It's at the grocery store. Since its inception in 1788, Cole Kedush's priority has been supporting nutrition security in the Jewish community. Many people in Israel face the prospect of going to bed hungry regularly, which is why the organization focuses on providing food and essential support to help people live with dignity and health. All households of its programs are screened and audited by local municipalities based on need. Local governments, they cover 20% of costs, while Cole Kedush makes up the remaining 80% through fundraising efforts and online donations from people like you. So reach into your pocket and donate a few dollars, a few shekels, whatever you can to our family and friends in Israel. They need us now more than ever. So visit colekedush.org/koshermoney. Make a one-time or recurring donation. The link is in the show notes, and on behalf of the people in Israel, thank you. Thank you so much. Now back to this week's episode.

What effect does that have on people? I, I, I see the Ramsey, the EveryDollar app, right? Mhm. What effect does someone's going through those 90 days? What's awakening in them when they're opening up that app on a daily basis? When you sit down together as a couple and you have a detailed plan before the month begins of what to do with your money, the first thing you will experience is this sense of, "Oh my goodness, I had no idea we're spending that on groceries." "Oh, look at what we spent eating out." I had this old country boy in from the hills of East Tennessee was in one of our groups. I was sitting in. He goes, "I'll figure out why we don't have no retirement. We've been eating it." You know, you have these realizations that come up, right? And, uh, you go, "Wow, look at that. Would you look at, oh, I see what's killing us right there. It's right that thing right there is killing us. That car. It's that. Look at what we spend there." It's like listening back to our podcast after we do them. There's nothing as no coach as brutal as tape.

When you listen back to it, you go, "Oh, I can't believe I said that. I can't believe how that sounded, right?" And the same thing's true with your budget. It's feedback. It's a feedback loop. So, and the couple is sitting there doing it together, so it's increasing the quality of their unity, the depth of their unity on their views of things. So the first thing that happens is you'll feel like you, you'll have this realization of what's going on. The second thing is you'll feel like you got a raise because you're going to go, "Where's all this money going?" I mean, we make what? And you start looking for all these holes in the bucket because there's a bunch of them, and then you start plugging those up, and you start getting this sense of, um, efficiency.

When I was a little kid, uh, my dad told me if I wanted money, I could cut the neighbor's yards. I took his lawnmower, and so I cut enough grass by the time I was 20 that God said, "I never have to cut any more grass." So I hate it. But, but there is this sense of, when you're cutting the lawn, or when you're pressure washing the mildew off the deck, there's a sense of satisfaction when you're done. The sufficiency. I completed the thing. And that's what happens. There's that, that same emotional feel when you go, "I'm like a grownup. I did this, and I'm not a child, and I'm not living by feelings. I'm actually living with a plan." And it feels really mature, and it feels really, uh, my soul feels good, you know? And you have that sense of that. So there's a pride, a dignity that comes with being an adult and being in control.

And the other piece we need to add with this, that's the downside, is it takes 90 days. You haven't been doing it for 10 years. Ever. You've never done it in your life. Your first 30 days, you're going to suck at this. You're going to be awful. And your next 30 days, you're going to be better because you don't even know where the money's going. You're trying to figure it out, and you leave stuff out, and then you have this stuff come in from left field, and it feels like you're not get knocked off and get knocked off the truck. You got to get back on and fell off the wagon, you know? And man, all these emergency budget committee meetings in the middle of the month to adjust, and because all this stuff comes in there. And, and the third month, it starts to click, and you, you will throw your shoulders back in the third month and go, "Yeah, I'm getting this. Dave was right."

Yeah, I want to end with a couple of fun ones. We'll, we'll put a link to in the show notes, um, to the app. Highly recommend, um, super, super useful. Um, Dave's been around the block once or twice. So, uh, give a listen. If you were talking to 25-year-old Dave Ramsey, two pieces of advice, you got about five minutes with him. What would you say?

Well, 25-year-old Dave Ramsey was pretty useless. Let's just, let's just put that in parenthesis here. He, I don't believe that. No, he really was. He was not a likable dude. Um, ah, number one is, um, quit looking for a hack, a silver bullet, a singular event that's going to be okay, make everything okay. It's not a singular event. It's a whole series of things. More of success. And the more of success in any area comes out of your personal character, who you are, who God is making you into, who you're growing to be, than some piece of intellectual knowledge or some academic course or something. I, I that was left out. High quality, high character human beings outperform highly intelligent people all the time in every area of our lives. Our marriage, our parenting, you know, our wealth building, all our careers, all these things. And, and I think that's a strong message for folks in my community, in the Christian community. Your, you folks, the people in your community rather, in the Jewish community, is, um, we, we do have the answer. We're people of the book, and, and that does matter. It's a bigger deal than the culture even has a grasp on. The culture is still looking for a silver bullet, and they're still looking if they could take one more class or find one more piece of intellectual knowledge, read the right book, the singular thing that if I had the right thing on my resume, it's going to be okay. No, be the right thing. Be the right kind of person. And don't look for a singular thing. And that's what I would tell him.

That's awesome. We have time for one more. And this, I actually love this next question. If you're with Dave, can you ask him what he would do if appointed as the Secretary of Finance in the United States?

Ah, well, I, it would not happen, uh, because I can't get along with those kind of people. So people like me don't need to be in situations like that because I'm, I'm always right and they're wrong, and so it just doesn't go well. Well, we're learning. You can operate behind the scenes. If, if you made me king today, what would I do? I would stop all the overspending, and there would be wailing and nashing of teeth in the land because we spend money up there like it's, it's out of, you know, completely out of control. And we all know that. I've never met anyone of any political persuasion of any kind that says, "Oh, no, we're all very wise with money in Washington D.C." Come on. I mean, we know that the thing is completely debaucherous. It's out of control. But, uh, no one's got the political willpower and is willing to put their career on the line to stop it. And so it just continues to bleed out. Where does it go from there? I have no idea. I'm not a guy who predicts the end of the world. But it's, uh, I thought, I mean, I, when I was a young guy, I thought it was going to blow up any minute. But now, now 40 years later, still hadn't blown up. So I don't know. I don't know. But it's, we all know that that math doesn't work. And, and we all know the answer is the ancient word that has been forgotten in America. And it's, it's a, it's a hard word to say. You press the tongue towards the top of your mouth and you release it and make a kissing motion with your lips, and it sounds like this. No. No. Yeah, we don't, we don't tell each other that. We don't tell our children that. We don't tell ourselves that. And, uh, and Congress never says the word ever. It's never uttered inside of D.C. No. It solves your budgeting problems.

Dave, cannot thank you enough. This was wisdom pearl after pearl. Thank you so much. Thank you. It's an honor to be with you again. Thank you, sir. Thank you.

Hey there listeners, before you head out, I want to share a story with you. But before that, if you enjoyed this episode, drop a comment on YouTube with either the word "helpful" or "empowering" or both. We're going to pick two winners at random and send them a Dave Ramsey book of their choice. And now, story time. I was last week at a local printing shop, Print on Point in Cedarhurst, New York, when a woman came over and said, "Hey, I recognize your voice. I need to tell you something." Said, "Go on." She says, "After listening to your podcast about managing Jewish finances, my husband and I were super motivated about budgeting and how we can get ahead." So they met with Stacy Living Smarter Jewish. They slowly got, got things in order from there. "We thank God," she said, "realize we can actually start a business together with their sister." So she said, "We brainstormed and created Slime Time." I put a link in the show notes. So she was saying the story, I said, "We're going to share your story with our audience, no cost, just because we're proud of you and the work you've put in together with your husband and your sister to not only get your finances in order, but to start an amazing business." She said that Slime Time is a business that goes to people's birthday parties, celebrations, where kids and adults get to play with slime and make awesome projects. They've done over 50 parties, they've ran three semesters of workshops, and get this, have doubled their profits in under a year. She says that the added income to their families has been a real blessing, thank God. So it's awesome to hear stories like that. We're going to put a link to her business in the show notes. And if you see me in the street, tell me about what you're up to.

Thank you to Dave Ramsey and our friends at Ramsey Solutions for making this episode possible. The team there is incredibly kind, and we're very, very, very thankful for the friendship. Check the show notes for links to all of Dave's recommended materials, books, and apps, including the EveryDollar budgeting app. Take a look at that. Thank you to the sponsors of this week's episode, The Donor Fund, Twillery, K Kabad. All the links in the show notes. And oh, if you would benefit from a financial advisor, I've told you about this. You want to get out of debt, you want a budget, you have some finance question, visit LivingSmarterJewish.org, or they've literally helped thousands of people just like you. And you can help LivingLamm by making a one-time or recurring donation at LivingLamm.com/donate. Yakov gives two thumbs up in advance. And if you want to help us out big time, big, big, big, big, big, big time, visit Apple Podcasts or Spotify, rate us five stars. That will magically tell the algorithm to show the Kosher Money podcast to others, and that helps us keep the lights on. So thank you for that. You're a terrific person. Did anyone tell you that?

On YouTube, we now have premium membership where you can get early access to episodes and more. If you're into that sort of thing and can afford it, duh. We also have other shows. Inspiration for the Nation has racked up thousands, literally hundreds of thousands of views over the past month. They've got incredible episodes. We've got other shows. We have a kids show called The Adventures of Avi and Zizi. Visit LivingLamm.com. There's too much for me to say in this outro. I've been rambling on and you're like, "I want to get to my next episode of Kosher Money. I've been missing out and I need a binge." So get to it. Until next time, keep your money kosher. Bye-bye. Living Lamm.

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