Highlights from the Dave Ramsey Show

QUESTION: Shana in Portland is in a support group for single moms. She wants to know what the tipping point is for success for single moms. Dave has some pointers for Shana on motivating them.

ANSWER: When I sit down with someone in those situations and they talk about their divorce from five years ago as if it happened 20 minutes ago, they've got some healing to do. That's my experience.

What I've got to teach them to do—and when they sit down and do their budget—I look at my debts, and I say, "I've got this much debt. I've got this much income. I don't see how I'm ever going to get out of this." I just get mad at the whole situation again. That's what you're talking about with the woes. The Eeyore kicks in and everything's bad. The spirit of Eeyore falls on them. That's called hopelessness.

The only way you can break out of hopelessness is to extend an actual practical game plan. There are two things I do. One is I extend an actual practical game plan far enough into the future that you see it working. That means that the likelihood of someone making the exact same income for five years is almost zero. They will likely make more or likely make less. In most of these ladies' cases, if they will get the emotional healing and the relational healing and spiritual healing and get out of the past and go on with the future, then their income is likely to go way up because it's probably the worst it's ever going to be right now. It's easy to say, "You're making $25,000 a year. That sucks. But I can see you making $40,000 in two years when you get on with your life and you become more valuable in the marketplace because of your attitude." You wouldn't say it exactly that way. I'm using very straight language with you. I'd be nicer than that.

Bottom line is we're not trying to project $25,000 into their finances as a mathematical formula five years out. I'm saying it's $25,000 now and then $30,000, then it's $35,000, and then it's $40,000 and $45,000. Based on that, we're going to see these things moving, so you're not always going to be fighting that.

I remind them that life is not a snapshot. If it were, your picture's so ugly you would just give up. But life is a filmstrip. Tomorrow is going to be different. Things are so bad right now in your situation, I think tomorrow's going to be better. It's a pretty easy guess. Let's just keep stepping in the right direction and healing and moving up the income charts knowing that we're not stuck in this situation. This is just where we are today. Life is a filmstrip. It is not a snapshot. Sometimes, you can get folks moving. But as you know, emotional healing is a spiritual experience. This is a God thing.

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Question: Ryan in Buffalo is 23 and struggling financially. He has a low income and comes from a family background under the poverty line. He's also attending community college and living with his grandmother and mother. Dave helps Ryan break through some mental barriers.

Answer: Part of what you're facing is just mindset. Not all of it, because you do have some legitimate things that you're facing, but part if it is mindset. When you say things like can't and stuck and impossible, and you're only 23 years old, remember that the whole world is waiting out there to give you stuff and waiting on you to win. Everything is possible, and you can do it. You are not stuck, so hear that loud and clear.

I started with nothing when I was 22 years old and by the time I was 26 years old I had $4 million in real estate. I lost it all because I was stupid and I borrowed too much money, but I did that from nothing. You know what the difference was between us at that age, with me at 22 and you at 23? I grew up with my parents teaching me that anyone can do anything if you want it bad enough and go do it. Some of it is mindset and that's what you're facing.

That mindset has caused you to take a $9-an-hour job in the middle of the night rather than getting a lawn mower to cut grass and making $25 or $30 an hour and starting your own small business, or saving up some money and getting a pressure washer and starting to clean and seal people's driveways or clean the mold off their decks.

Just believing you can and knowing there is something out there for you and you start looking for those things is important. I'm glad you're in class since education is part of that. I'm glad you're in the mix. We might look at switching you to night class and having you work all day, though. There is nothing wrong with night classes at community college. I really commend you for that.

The fact that you're asking the question of how you do this is huge for you. That says you have huge potential as well. Most leaders are readers and they read nonfiction books all the time, so I can send you some books that I have my team members read when they join our team.

You should also look for someone to mentor you, to teach you and help you with business and your career. A good place to do that is to find a local church to attend and find a successful businessman or businesswoman there. Ask them if they'll spend 15 minutes or 20 minutes a week with you. You listen to them and take notes and ask them questions. You use that to shift your mindset and redirect yourself.

I think you've got tremendous potential. I think you've got more potential than you think you've got.

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Question: Pam in Gainesville and her husband have an annuity due to winning part of a lottery. They receive $37,500 each year. Pam wants to pay off their debts now and pay off the house next year. Dave has some tough love for Pam after giving her his opinion about the debt.

Answer: Do it. But I want you to play this call back on the Internet and listen to yourself. I'll be transparent with you in a loving way. I'm listening to you and thinking, I'm not sure I can help this lady.

You gave me a whole list of stupid things you've done with money. You have no boundaries with your kids. They are grown people. They need to be on their own taking care of business. You bought a freaking lawnmower on 90-days-same-as-cash at Home Depot. Come on!

This money will not be a blessing to you if it causes you to not address those habits. Let's make a list of the stupid things you've done, and never do them again. That will make you more money than this lottery will have made you. But if you'll use this lottery money to get out of debt and you stay out of debt because you continue to do smart things with money and avoid these dumb things you've been doing with money, you could end up way ahead because of this. I sure hope that's what happens for you. But if all this money does is you get out of debt, and you continue to be lazy in your decision making and you do these things that you used to do, except worse or bigger or more of them, then this lottery basically enabled you to continue the insanity. You don't want to do that. I don't want that for you, and I'm not trying to be mean to you. You don't hear that in my voice. I'm not picking on you, but you've got to change the habits.

Personal finance is all about habits. It's not about income. Income will come when you change your habits, and you've got this nice little—and it's little, $37,000 is not life-changing—but if you handle it right and you use the fact that it paid off your debt to grow wealth, you'll have money to give and help people with. But if you don't keep healthy boundaries and you make bad decisions, you're going to struggle from now on. That's really what I want you to get out of this call more than the actual advice. But I like your plan. Pay off the debt, then turn around and pay off the house the next year. Boom, boom, you're done—just as long as you don't turn around and go back in. That's the big thing there.

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