CASH DIET | Making room for a debt-free life
LAS VEGAS (KSNV News3LV) —
"You got no cable. You don't eat out. You don't go on vacation. All you do is work, pay debt and sell everything you can sell," exclaims Dave Ramsey*. His financial advice often includes drastic measures to help people pay off debt.
For nearly 25 years, Ramsey has been counseling callers on his national radio program. Your income is your greatest wealth-building tool, says Ramsey.
"We did our taxes and were like wow. We made that much money?" Ben Packer told News 3 about the day he decided to give Ramsey’s tough talk a try. Ben and his wife Karlie, both of Las Vegas, needed to pay off over $30,000 in debt.
Their journey started with scissors.
“It was pink and had my initial on it," says Karlie, of her beloved Discover Card. "I was sad when I had to cut that one up. But it was worth it to me to just use cash."
Two years after following a strict written budget they paid off their credit cards, a car loan, and student loans. And it was work.
Becoming debt free meant two years of austerity. They didn't go on vacation and sold things they didn't need. Their budget was micromanaged to the penny. All spending was planned to avoid financial upset.
“You gotta have a game plan,” says Ramsey. He instructs people to stack debts smallest to largest, and start by paying the smallest balances first.
“When you knock that next one off you feel good. Every time you pay off one you got more money to attack the next one down, the snowball rolls over, it gets bigger," says Ramsey, during a financial seminar.
Ben and Karlie’s first big milestone was saying goodbye to an auto loan. To jumpstart their debt snowball they sold their second car after deciding they could get by with just one.
“We paid off his car, which was a big step. And getting the title in the mail was exciting,” says Karlie.
Today they are debt free, except for their house, and they are aggressively chipping away at that too.
Without the burden of debt, Ramsey says people can pay cash for the things they need and want, and he suggests they’ll think more about a potentially frivolous purchase.
“When I feel the cash leaving my hand it hurts a little bit more,” says Ben.
• Dave Ramsey is host of The Dave Ramsey Show, heard locally on KXNT-AM, weekdays 7 – 10 p.m. The program originates out of Nashville, T.N., and is syndicated to more than 500 radio affiliates nationwide.