Five Rules for Life According to Dave Ramsey

Lara DeHavenDave Ramsey, Homeowner Tips, Mike Goins Real Estate

Five Rules for Life

As we are weeks from the next year, I thought Dave Ramsey’s “Five Rules for Life” was an appropriate topic to explore. A well-known financial coach and guru, Dave Ramsey runs a highly successful company helping people get out of debt and invest wisely. If you are already familiar with Mr. Ramsey, then you might think you know what his five rules are. However, they were not all what I expected. His “Five Rules for Life” were better!

Dave Ramsey starts right out of the gate dispelling the myth that money makes you happy. Instead, he states that money does not solve your problems. He maintains that money “makes you more of what you are right now.” Therefore, make sure that you are a person who can handle the responsibility that comes with having money with the following advice.

Five Rules for Life

Get on a Budget-

Right out of the gate, Dave Ramsey encourages everyone to get on a budget. No surprise here. Doing this monthly as a single person or together with your spouse makes you intentional with money. It gives each dollar a purpose. A budget enables you to make wise financial decisions about how you spend your hard-earned money.

You have to reach a point in your life and decide that you are going to change, starting with a budget. You will no longer fall into the same traps and habits with money. This first rule for life will enable you to do the other four.

Get out of Debt-

Honestly, you had to know that this rule was coming. Dave Ramsey has built his entire career helping people become debt-free. He often says, “Your most powerful wealth-building tool is your income.” So reflect—who are you making rich instead of yourself? Another great question to ask yourself is—what could you do if you didn’t have payments? These two insightful questions can give you an incentive to pay off all your debts.

Foster High-Quality Relationships-

So you might not have seen this rule for life coming, but it does stem from a biblical principle. “Bad company ruins good morals” (1 Corinthians 15:33). Look to build close relationships with people who share your goals and morals. People who will encourage you, give wise counsel, model good financial behavior, and more are worth the investment of time. Notice that he said “close relationships”. He is in no way saying to cut everyone with issues, problems, and financial woes out of your life. You can have those relationships, but reserve your most time and value the advice and companionship with people that make you a better person.

You Need to Save and Invest-

Wise people save money. They know that some life event will happen that they could never foresee that will require funds. According to CNBC, 58% of Americans right now are living paycheck to paycheck. Only 40% of all Americans could cover a $400 emergency, according to Fortune. Therefore, saving an emergency fund is the first step in this rule. First, save $500. Then save $1000. Once you have that, begin saving three to six months of expenses. This should allow you to absorb calamity, illness, disaster, and loss.

Investing allows you to retire with dignity. You cannot count on the government. You must plan wisely for when you grow too old to work.

Be Generous-

Proverbs 11:24a says, “One gives freely, yet grows all the richer.” This is a perfect description of generosity. You give, yet receive the pleasure of having given. As Dave Ramsey says, “Generosity is a spirit.” It enriches your life and the lives of others. Yet it is impossible to give when you don’t have any money. You cannot be generous when you give all your money to debtors.

These “Five Rules for Life” according to Dave Ramsey can be transformative if you apply them to your finances. They can change your life as well as the next generation. They are definitely “food for thought” as we close out 2023 and look forward to 2024.