The Truth About Debt Reduction

from daveramsey.com on 01 Aug 2009

By Dave Ramsey

Myth: Only the rich can be debt free.
Truth: Anyone can become debt free. True debt reduction is plain common sense and hard work.

Many hard-working people get into debt because of mistakes. I work with those people every day. I'm talking about them—those who are willing to keep working hard—when I promise that there's hope to get out of debt and have a financially peaceful future.

Beware of Quick Fixes

But then there are lazy people who look for a quick fix, such as debt consolidation or debt management. Real debt help is not quick or easy. Laziness is a character flaw. You need to be willing to work and sacrifice in order to fix the situations that you created with your own irresponsibility. If you are not willing, then you cannot be helped.

Are you willing to get another job and work a few 80-hour weeks? If you are in financial stress because of something you've done, you need to get yourself out of the mess by working. If you think that it is too hard, you will never get out of the debt that you brought upon yourself.

Laziness is a sickness, and it will get you absolutely nowhere in life. We all make mistakes, but the question is whether you are willing to take responsibility for your mistakes! You need to learn from your mistakes or you and your children will be doomed to repeat the cycle. How badly do you want to be out of debt?

How to Get Out of Debt

We've developed a little process called the debt snowball to do one thing at a time and keep the debt reduction process simple. I have been broke. I know how scared I felt, and I know how fast I wanted to get out of debt. I know how you feel, and I have learned that what really works is unbelievably fierce, focused intensity.

Get focused about your debt reduction with The Total Money Makeover.

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Post a Comment

by Sophia at February 09 2010 7:43 AM

I see all of your information around debt management companies and I am up to over 100K in credit card debt after losing my job and having to take a 20% reduction in salary. I had to use credit cards to supplement my income. I was looking into one of these debt settlment companies but after listening to your show for the first time on yesterday and doing some research on your website. I appears this would be terrible mistake. I am upside down with income, credit payments and my mortgage. What do you recommend that I do. Please help!

by Phil at February 05 2010 2:27 PM

I have 53,000 in unsecured debt is bankruptcy my only option.

by Kady at February 02 2010 8:51 AM

My daughter had a nice scholarship and decided to work at a theme park for a semester while taking classes online from college. She "said" she was doing fine but after getting a letter from the collegeI found out she didn't complete 2 of the classes and was given an incomplete. She does what she wants(she is 1000 miles away) and won't open her mail or call anybody to get her act together. She has maxed out a credit card of $500 and she gets by paycheck to paycheck. She owes us a car payment,insurance and cell phone and has yet to pay. She extended her stay at the theme park and as far as I know no longer enrolled in school. Everytime I ask anything I get the "I will get to that Mom," or "I know Mom," so I just quit asking. I want to try and help but the only time she calls me is when she need some money for groceries or gas. What do I do? I need some guidance please!

by Wes at January 21 2010 4:31 PM

I'm paying more than I can afford on an old student loan. But at this rate, it'll take me another 16 years to pay it off. I'm looking for advice I can use and have not found anything of value to me yet.

by Larry at January 18 2010 4:43 PM

My wife and I find ourselves with $65,000 in credit card debt. One of the main reasons are due to 1 of our daughters was in an abusive marriage with an 18mo. old and had to move back in with us. I am on disability due to some major health issues but, have been developing a custom label bottling business as well as a private ecommerce franchise through Amway Global. My wife works full time and works about 60hrs. a week in a high stress job. I work 40-60hrs. from home and do as much as I can when I am healthy. Our daughter and grandson lived with us for 2yrs. and it cost us about $30,000 with attorney fees and living expenses for her to return to schoo and to raise her son. For either of us to get another job is not feasible for us, we have no extras, do not eat out and have not had a vacation for several years. What can we do?

by Audra at January 10 2010 12:26 PM

We're currently hold nearly $100,000 in credit card debt that has accumulated over the past 2 years. My husband thinks we should cash in my retirement and start over. I'm only 40. All the financial advise I've heard says to keep retirement funds "sacred". That said, I'd like to understand what the bible teaches about storing a harvest for the future when we're so indebted. Can you help me?

by Cynthia at January 10 2010 9:51 AM

I'm a widow. Should I have a bigger emergency fund or start on Baby step 6?

by Sara at January 08 2010 9:29 PM

We are planning on using our tax money to clear out some debt. We have 3 children and using that money will get us out of a 6,000 debt. We want to buy a house and want the best credit score we can get. If we have all the $ we need to pay off the debt, is it smart to pay it all off at once or make payments? We have never owned a credit card and really dont want to. But everyone is telling us to get one to increase our credit score. Whats your advise?

by Blair at December 02 2009 10:16 AM

Jane, you can't do anything. There is nothing more unwelcome than un-sought-for advice. All you can do is show how your financial house being in order gives you peace. When / if he is ready, he'll know whom to call. You can also pray, and pray fervently, for him to ask. Also, a little further advice, don't own problems that weren't given to you.

by Mrs Jane E. at November 25 2009 2:50 PM

"Laziness is a sickness, and it will get you absolutely nowhere in life". I agree, Dave, but in my 32-year-old son's case, it wasn't laziness. Itwas depression. He was living on his credit cards. When he finally got out of it, he had (and still has) a huge amount on debit cards, plus school loans to be paid back... He's an adult and we can't tell him what to do anymore. We're available (although we live in another country...), but he prefers to keep his distance. What can be done? What can we do? sincerely.

by Suellen at November 09 2009 10:17 AM

I contacted our utility company and started level billing. Since I had budgeted a higher amount than they needed each month I put the difference toward the smallest bill.