Changing Money Behavior: That’s the Key to Living Debt Free!

Dave – Changing money behavior is the most important step, isn’t it?

You talk about lots of things on the Dave Ramsey Show, but the part that you always talk about as being most critical to getting out of debt is changing money behavior.

For people not familiar with your plan it is easy to think that the way to get out of debt is to lower an interest payment. I cannot tell you how many offers show up in my mailbox offering to lower an interest rate. And there are tons and tons of offers to consolidate debt.

Dave you are so right: It’s so easy to think you are doing something to get out of debt when you simply consolidate debt. But it never works.

Consolidating debt is not the same as changing money behavior. It’s really more like rearranging the deck chairs….on the Titanic.

In the very first letter I wrote you Dave I mentioned that I in the earliest years of our marriage my wife and I were not in debt and careful with money.  We had established great money behaviors.  There were two reasons for that.

When we first went to Africa as missionaries we made very little.  We had no choice but to keep track of every single penny.  Where it came from mattered (our first month on the field we literally had no income!).  Where it went mattered more.  We had to develop new money behaviors, ones we had only occasionally used in the first couple of years of marriage.

In those days we paid cash for everything, which was a money behavior that I know now matters a lot.  As you say in your book The Total Money Makeover, when we part with cash (as opposed to using a credit card) we trigger parts of the brain associated with pain rather than pleasure. In our first years of marriage when we would go on vacation, we didn’t have that much money available.

We would write down every penny we spent.  We had to.

Let me say that again:  We would write down every penny we spent.  We had a money behavior that was to our benefit (but we didn’t know it).  There wasn’t a lot to spend money on in Zimbabwe, and food was cheap, so we managed without really trying to live well below our means.  We even saved $100 a month.

We also started budgeting, which at that point meant we kept a paper budget.  It was not that hard to do.  (I’ll write another letter explaining our budgeting experience later).

When we moved on to a different country to continue our missionary career, we took on money behaviors that mirrored the people we lived among.  Taiwanese were and are prodigious savers, and it was not hard to live more or less as they did.

But the money behavior that mattered the most was the one we started in Africa:  we kept track of every penny we spent.  Oh…and we lived on cash.  In the 90s debit cards and credit cards weren’t widely accepted in Taiwan (that would change later).

Which leads me to what I hear you say repeatedly.

If someone wants to get out of debt, they have to change their behaviors – their money behavior.

You repeatedly tell your listeners “if you want to be skinny, you do what skinny people do” – you change your behaviors.

The first step (not the baby steps!) in living debt free is knowing where your money is going.  Then you can start telling your money what to do.

More later,


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