Dave Ramsey: The No. 1 Way You’re Robbing Yourself of Millions in Future Wealth
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Heather Taylor
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Molly Sullivan
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You have the power to build your future wealth, but making the wrong moves can rob you of more money than you may realize. Money expert Dave Ramsey tweeted you’re “literally robbing yourself of millions of dollars in future wealth” if every dollar of your income goes toward an endless stack of payments every month.
If you find this is happening to you, don’t feel discouraged. Certain foundational principles can help set you up on the road toward building wealth. Follow these five steps to build your wealth at any age.
1. Establish a Budget
Creating a budget is extremely beneficial for your money and financial health.
According to a Ramsey Solutions blog post, budgets are a written plan for your money. You can use this plan to reach your financial goals, control the money coming in and out every month and spend and save money just by sticking to a budget. It’s also a tool the wealthy use on a regular basis. Ninety-three percent of millionaires said they stick to their budgets, according to the Ramsey Solutions post.
2. Get Out of Debt
These monthly payments are eating up all of your future wealth. Those who have debt should prioritize paying it off in full as soon as possible. Once you’re out of debt, stay out. Do not accumulate more debt.
3. Live Below Your Means
If you receive a raise at work, don’t give into lifestyle creep and put it toward buying an expensive new car when your older model works perfectly fine.
Not giving into lifestyle creep is another strategy used by millionaires. According to Ramsey Solutions, 94% of the millionaires they studied live on less than what they make. “The typical millionaire has never carried a credit card balance in their entire lives, spends $200 or less on restaurants each month and still shops with coupons — even after reaching millionaire status!” the post reads.
4. Save Consistently for Retirement
Don’t put off saving for retirement. Start consistently saving, and investing, now and keep it going month after month and year after year to reap the benefits of compound interest.
How much should I invest? Ramsey Solutions recommends investing 15% of your gross income in accounts like a 401(k) and Roth IRA.
5. Be Generous With Your Money
What comes next after creating a budget, getting out of debt, living below your means and investing consistently? You can now be as generous as you like with your money.
The post on Ramsey Solutions said studies have shown those who are generous with their money are happier, content and lead a better quality of life. You feel good giving and your gift helps countless individuals who need it: a win-win.
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