Dollars And Sense Advice Financial Advisor Has Been There, Done That

Regina from Russellville, Ky., sounds desperate.

She’s $10,000 in debt because of her husband’s strokes and the creditors are calling. She makes only $25,000 a year to support herself, her husband and two teen-agers. What is she going to do?

“You’re going to have to do some painful things to get out of this,” Dave Ramsey tells her over the phone and, at the same time, thousands of listeners tuned into his “The Money Game” financial advice radio talk show.

Regina must sell the car that costs her $287 a month, Ramsey says, and instead, drive the paid-for car her children are using.

“They’re gonna scream and yell, but you’ve got to do it,” he says.

Ramsey is well known to audiences in the Southeast and places like Spokane, for his tough approach to getting out of debt. Soon he’ll be heard and seen nationwide.

He’s going on a book tour promoting a new version of 1992’s “Financial Peace,” which is landing him on programs like The Today Show and he’ll be heard on an expanded radio market that includes Las Vegas, Nev., and Grand Rapids, Mich.

Audiences will hear Ramsey tell people like Regina to keep giving money to their churches, despite what creditors say. (He closes every show with the advice that the only way to “financial peace is to walk with the Prince of Peace.”) And to hold her head high and work with the creditors on a plan to pay them off and then do it.

He knows firsthand what they’re going through.

“I have been there. It is not easy. It is NOT easy. But you can do it,” he says.

Ramsey doesn’t hesitate to tell everybody who asks what happened and how he got out of debt.

In 1985, he was 26, driving a Jaguar and carrying a $4 million real estate portfolio. But he also had $1.2 million in 90-day notes from a bank. When the bank was sold, the new owners called all his notes.

That started a chain reaction in which he lost everything except his house and his wife. It took him three years to pay everything off.

Now, he’s working his way back to millionaire status, but he owes no money, drives old, paid-for vehicles and hasn’t loaded his life down with expensive things. That’s what he wants for everyone, advocating “what in 1950 was called common sense.”

That means living within your means, not spending more than you earn.

“There’s nothing original about what I do, except in the presentation. I’ve been there, done that. I’ve got the T-shirt with the zeros on it,” he said during an interview. “It makes me approachable. It makes me touchable. It’s not just the blathering of some guy’s ego.”

His advice to the debt-ridden includes:

A “plasectomy,” or cutting up all your credit cards;

Attacking the debt with a budget, “where you spend every dollar on paper before the month begins;”

Using a “debt snowball,” where you list debts from smallest to largest, pay the minimum on all the debts except the smallest. When it’s paid off, use the money you were spending on the next largest debt, and so on;

Either pay cash or don’t buy it.

But first, Ramsey says, you’ve got to want to change your life.

“It’s like waking up the adult inside each one of us, when the child has been managing the money,” he said.