In the last review we reviewed the Cash Flow Planning lesson, but this lesson is the lesson Dave Ramsey is most well-known. Ramsey is known for teaching millions of Americans how to cut up credit cards and eliminate debt from their financial picture.
In this lesson, Ramsey points out that many companies started with a debt free mentality. “Sears had a slogan that said, ‘Buying on credit is folly,” Ramsey said. He also mentioned that James Cash Penny or JC Penny’s hated debt as did Henry Ford. Ford didn’t over credit until 10 years after General Motors.
Ramsey utilizes many different reasons as to why people should not utilize debt including Biblical scripture, the damage it can cause relationships, and he spends his time “debunking several myths” regarding debt.
He also mentions the good that people can do with their income when they have no debt in addition to how people spend less when utilizing cash instead of credit.
“McDonald’s did a study and found that people spend 47% more when utilizing credit instead of cash,” Ramsey said.
Ramsey has also termed the phrase, “The FICO score is an I love debt score.” He explains that in order to have a good credit score one must have, use, and pay off a lot of debt.
“The Forbes 400 was asked, ‘What is the most important key to building wealth?’ 75% replied becoming and staying debt free.”
Ramsey lists the following five steps to get out of debt:
- Stop borrowing money
- Must save money
- Sell items to help pay extra towards debt
- Get a part-time job or work overtime
- Prayer works
Overall, this class was very similar to the “old” FPU. Ramsey is still entertaining and informing as he encourages and motivates the class.