Dave Ramsey says this is the main problem with debt

Young woman looking at her bills with worried facial expression.

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You might be surprised by Ramsey’s borrowing problems.


the main points

  • Dave Ramsey thinks you shouldn’t take on debt.
  • He hates debt because you end up paying off your previous purchases with future income.
  • He says it’s hard to move forward with financial goals when you do.

Dave Ramsey is a well-known financial expert who has given many useful tips. One of the topics he stresses over and over for his audience is the importance of avoiding debt. In almost all situations, Ramsey is against borrowing. In fact, he urges you to pay cash for a house if you can, instead of getting Mortgage. You may want to Avoid following This particular advice.

However, the big question is why Ramsay is an anti-debt. And he actually has a very good reason to suggest you stay away from borrowing.

Dave Ramsey thinks debt is a big problem for this main reason

So, what is Dave Ramsey’s big objection to borrowing. It’s about the impact of debt on your future.

“This is the main problem with debt,” Ramsay explained. “Your income is the greatest tool for building your wealth. But debt is about paying off the past — putting this month’s income into something you bought last month, last year, or even longer. You can’t move forward like that.”

As Ramsay points out, if you borrow something you need today, you commit yourself in the future to pay for it. If the payments are $100 per month, that leaves you $100 less than you can use to cover your bills in the future or you’re likely to set goals like saving for retirement or big purchases.

For all those months ahead when the payments are due, it’s going to be hard to live within your means because you’ve already set aside a portion of your money toward something you bought a long time ago. If you want to do other things, there won’t be a lot of money to do it.

And you can’t change your mind only if you end up regretting the fact that you tied up that money with which you might prefer to do other things later – you are obligated to pay it to your creditors whether you want to or not.

“Debt is holding your income hostage,” Ramsey warned. “It’s holding your future hostage.”

Is Ramsey right?

Ramsay is absolutely right that when you borrow, you are limiting your future options. You no longer have a choice to do whatever you want with the money you promised to pay. Skipping making payments can have serious financial consequences, including damage to your credit score and potential legal action if creditors try to collect it.

Now, this does not necessarily mean that you should absolutely avoid debt All Despite the circumstances. While you have to agree to invest future money toward a commitment you’ve made in the past, sometimes it can make sense to do so. For example, if you are borrowing to start a business you will a plus your future income, you may end up in a better position even if you have to make business loan payments.

The main thing to think about when deciding whether debt is bad or not is whether it is Deserves all the effort To deprive yourself of some future profits by committing to sending money to creditors. If the things you buy with money will not improve your situation in the long run and may not even last as long as your payments, then you should avoid debt. But if you end up in a better case to borrow it, in the future you might not mind making those payments at all.

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