How Dave Ramsey pulled himself out of bankruptcy

The Street

Dave Ramsey, CEO of Ramsey Solutions, joins TheStreet to discuss how he got himself out of bankruptcy.

Transcript

00:00So you mentioned you hit rock bottom and you had to file for bankruptcy.

00:06What was the first step? Because there's somebody watching who says,

00:09okay, I've hit rock bottom, but they don't know how to move

00:13from the bottom to get to where you are.

00:16So walk us through that process.

00:19Well, it hurts when you hit, because it is hard.

00:23It's not a soft landing. It's a splat.

00:26One guy said, how did you bounce back?

00:28I didn't bounce. I splatted.

00:31It hurt. It hurts bad.

00:33And so if somebody's at rock bottom and they're watching, I'm with you.

00:36I understand. It hurts.

00:38And what I had to do is just what Sharon and I did.

00:40We just took inventory.

00:42We said, okay, what about us personally and what about our behaviors

00:46and our habits and our decisions and our values was wrong

00:52that brought us to this moment?

00:54Because we weren't victims.

00:57We caused it.

00:59No one did anything to us.

01:02It was evil or nefarious.

01:04It was us doing it.

01:06So we had to say, all right, what does stupid look like?

01:09And let's stop doing stupid.

01:11And so we said, all right, we don't borrow money anymore.

01:15And I've never had a credit card since then.

01:17And I don't borrow money.

01:19And so we were driving an old beat-up car.

01:21It was awful. It was a lot worse than what we were talking about a while ago.

01:24It was horrible.

01:26But it was so bad that I was highly motivated to save money to get out of that car.

01:31So we saved a bunch of money really fast.

01:35I worked like an animal.

01:37And so, yeah, you start writing it down, write down where your money's going.

01:41You do anything you can to get your income up and keep your outgo down.

01:45And you get an agreement with your spouse and you lock arms and you say,

01:50the rearview mirror is smaller than the windshield for a reason.

01:55What happened in the past is in the past.

01:57I don't have to live like that anymore.

01:59I can make a decision to change and go.

02:01So we're going to do a budget.

02:02We're going to increase our income.

02:04We're going to stay away from the things and the decisions that brought us into this mess in the first place that caused the splat.

02:09And then when I started doing that, people started asking me, what are you doing?

02:13Because your life seems to be turning around after that horrible, stupid thing you all did.

02:18And I said, well, I'm staying out of debt.

02:20And I write it down.

02:21And my wife and I are in agreement.

02:23And we saved money.

02:24And they said, that's it?

02:25You ought to tell somebody that.

02:27And so we've spent the next 30 years telling people that.

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