The 7-Step Plan to Live Debt Free

- Well, it's a new year, it's a new you. And this episode is about taking control of his money with Baby Steps. (upbeat music) Can you guys believe it? It's 2019. We're a week into the new year and it's already fantastic. So, many of you will have some New Year's resolutions that you work on, and some of them will be financial resolutions. In fact, the second most popular resolution in the United States is to pay off

debt

. So if that's you, you've come to the right place. Because for 25 years, there is a proven

plan

that has helped millions of people get out of

debt

,

live

on a budget, fund retirement, fund college, pay off their houses, and be able to be incredibly generous.

I mean, all the things. And I'm dedicating this entire episode to this

plan

. The plan is called Baby Steps. And I'm very excited because I'm bringing two special guests to help me. You probably won't be too surprised to learn who they are. That's right, Dave Ramsey and Mr. Chris Hogan are coming. So, we will sit down together and discuss this plan. Now some of you have completed the plan. You are incredibly generous and you make all the money. You're doing great. Some of you are in the middle of this journey. Maybe you're paying off debt or funding your emergency fund.

And others of you haven't even started. But no matter where you are, you'll enjoy this episode. But I can't emphasize it enough: to win, you must have a plan. And the Baby Steps are seven

step

s that are very easy to understand, so you won't get confused in this episode. You're not going to say, what? No, very easy to understand. But here's the kicker: it's hard to do. (soft piano music) Alright, this is the moment in the show, Real Talk with Rachel, where it's usually me talking about how I decided to quit the marathon, quit training, because running is stupid to me.

It's true. Or maybe about buying a workout app that costs a hundred dollars that I've never used. You know, all the things I was wrong about that I'm great at sharing. But I decided that this Real Talk will be about you. Because you need to have a real conversation with yourself. That's how it is. If you're sitting there watching this and thinking: I'm miserable financially. I feel like we're living paycheck to paycheck, we're not making progress. I need something different. Well guess what? This is your year. But here's the deal: if you don't like where you've been and you don't like the results, you have to change.

That's the definition of insanity: doing the same thing over and over and expecting a different result. You have to do something different. But that will be very uncomfortable for you and it will be difficult. But is it worth it. None of us like change. When you get into the habit of something, changing it is very, very difficult. But again, to get better results for your money, you need to switch. So I want you to look in the mirror and say, okay, I'm doing this. I'm going to do something different. And here's the deal: If you're feeling overwhelmed, why not try this for the next six months?

In July, if you hate this plan and like your old life better, go back to your old life. Listen, I'm not mad about that. But I guarantee that 99% of you will say: this is the most

free

I've ever felt with my money because suddenly you learned to control your money, and your money doesn't control you. So that's the deal, guys. New year, new you. Let's change. (upbeat music) Well, you're still here, so we'll start the journey with Baby Step 1, which is saving a thousand dollars in the bank as your initial emergency fund. This is key because it will be your cushion between you and life before Baby Step 2.

Therefore, this is a very important

step

. But here's the thing: This is probably the easiest step in Baby Steps, but also the hardest. It's the easiest because it's a thousand dollars. You can do this in a few weeks or a few months. I want you to do this very, very quickly. You know, work extra if you have to, sell something, do what you can. Collect a thousand dollars and save it. That's all you have to do. But it's going to be the hardest step because that means you're now entering a journey you've never experienced before. And you're actually saying out loud, okay, I'm doing this.

I am going to commit to this change. But this thousand dollars will be like a pat on the back in the future because once you can achieve it, you will have more money saved than most Americans, and it will feel amazing. So how do you get a thousand dollars? Well, here are 10 quick ways to save a thousand dollars. Number one: get an extra job. Generate some extra income. Maybe you want to drive for Uber, wait tables, or maybe you have a skill like photography and can get paid for it. Whatever it is, find that extra income: work more.

Number two: work overtime at your current job. Make some money. Number three: sell something. Guys, we have so much junk in our

live

s and in our house that we don't need, that we don't use. Get rid of it! And then once you've gotten through the steps, maybe if you want to go back and buy something else, you can do that. But for now, get rid of it, sell it and make money. Number four: stop eating out for a couple of months. That's how it is. Restaurants: quick place to spend money. Number five: get rid of the cable.

Number six: Delete memberships and subscriptions you're not using, like Spotify or your gym membership. If you're not using these things, leave them. Don't pay for them every month. Number seven: Airbnb your home while you're out of town. Number eight: Compare your insurance rates. You can save a lot of money by doing this. Check out our ELP program by clicking the link below. Number nine: Reevaluate your cell phone plan. Look and say, okay, are we using all the data? Maybe we can change something, maybe we can get a cheaper plan and save a lot of money that way.

And number 10: buy generic brands. Medications, makeup, food, everything. Make sure you save money that way. And to help you keep track of the thousand dollars you're saving and reach your other financial goals while paying off debt, be sure to download my goal tracker. So click the link below for that. Alright, next up is the man who created Baby Steps, my dad, Dave Ramsey, to talk to us about Baby Step 2. (upbeat music) Well, welcome back to the show. - Wow, I'm here. - I know. You're back. Thanks, you couldn't walk away. I know I know. - Well, The Rachel Cruze Show is calling, come on. - It's true, people, it's true.

So, we're on Baby Step 2, and Baby Step 2 is paying off all of your debts except for his house. And this is done using the debt snowball, and that's where all of your debts are listed, from lowest to highest, regardless of the interest rate, minimum payments are paid on everything, and the smallest debt is paid off first. And so, we found that people get incredible traction and really win with this method. And, on average, people are paying off their debt, except for their home, in 18 to 24 months. So this whole idea is pretty powerful. So when you started this whole program.

I mean, you're like the Godfather of Baby Steps and all that stuff. So what made you, first and foremost, say, yes, you need to be debt-

free

? What is the point of being debt free? Those people who look at that say, huh? It is so important? What would you say? - Well, I mean, I saw in the Bible that it says that the borrower is a slave to the lender, and we went bankrupt and lost everything because of it. And so from a risk management standpoint, that's where it started, because it's like avoiding pain, because we've been through a lot of bad things, you know?

And then the next thing that happened was I started to realize that actually your most powerful tool for building wealth is your income. And when you don't give it to someone else, you can use it to become an everyday millionaire. You can use it to change your family tree. You can use it to be outrageously generous. But when you give it all to Countrywide, Citibank and Lexus in the form of payments, Mastercard, Visa, American Express, etc. You know, you don't have any money. And so it's kind of a mathematical thing that you're giving up your power, your mathematical power to generate wealth. - It's so good and there is so much freedom.

We've talked about it on the show. Not only mathematically and financially (when you have no debts or payments) but emotionally and spiritually. It changes your entire life, your entire being when you don't have payments. When you don't owe anyone anything, you have that sense of freedom that you can choose things in your life that you otherwise couldn't if you had to go to that job and earn that money just to pay for life. bills. - And, you know, I thought that the first time, my first understanding that the borrower is a slave to the lender was the mathematical question. -Yes.-That when you give all your money to another person, you are like his property, right?

I understood that part. But what I didn't realize is that slaves don't have options. Slaves: It is difficult to have relationships because people control you. You know, you're going to do a job you hate every day, creating a toxic environment just to pay damn bills. You know, slavery has social, relational, spiritual, not to mention mathematical, implications. And so Scripture really has many layers. You can keep removing them and then continue. - Yes absolutely. So when you look at the mathematical side of snowballing debt and paying it off from lowest to highest, I've heard the argument over and over again. (Dave complains) We should pay the highest interest rate first because mathematically, that's right.

And we laugh all the time saying, well, if you were doing math, you wouldn't be in credit card debt. So math doesn't always apply to the situation. But 25 years ago, when you started this and fought that, what did it make you do from least to greatest? What was that sort of “aha” moment? - Well, we realized that the problem is not mathematics. And if the problem isn't math, you can't solve it with math. The problem is the person in the mirror. And so what happened was that the first thing I did, you know, in terms of interacting with the public, trying to help people, was one-on-one coaching.

And we had people who were in foreclosure and were behind on their credit card bills, and I would organize everything into their budget so they could get caught. And then they would be fine and avoid bankruptcy. It was an individual training session, that's all we had. - Yes. - And then I would see them six months later and say: How are you doing? "Oh, we filed for bankruptcy." That? You know, I did all the calculations for you. And it wasn't a question of mathematics. - Yes. - It was a matter of behavior. The things that were happening in their lives were still happening in their lives, and if you don't change the person, the math doesn't change.

When people change, numbers change. That's what Hogan says. Not when numbers change, people change. It is not like this. So what we discovered was that personal finance, and we say this all the time, is 80% behavior, 20% intellectual knowledge. The problem is not the mathematics. The problem is me, I'm the geek, I'm the boy. When the problem is chocolate chip cookies, if I'm trying to lose weight, you know? Then we discovered that chocolate chip cookies aren't the problem. He's the guy who eats the cookies. It's 80% behavior, it's 20% mental knowledge. You know you really... can't get enough exercise to lose weight if you eat an elephant.

I mean, you just can't do it. And the same thing happens here with your monetary situation. You know, you can't make enough money to overcome your stupidity. I tried. I'm good at making money, but you have to control the person in your mirror. And once we understand that, then we say, well, if we're going to solve this, if it's a psychological behavioral problem, then we're going to solve it with a psychological behavioral response/solution. And that's why the debt snowball works. And all these other theories, and all these people who want to talk about this, are just people who don't want to do it.

They don't want to do the hard work of dealing with the person in your mirror. It's harder work than trying to find something mathematical to solve it. The math thing is not going to solve it. It's not going to fix it. What will solve it is when you fix yourself. That's all. - And yes, it is. It's so true. But the difficult thing is that nobody likes change, right? You've been doing the same thing over and over again and you get into this groove in life, and breaking out of that orbit and doing something different is difficult and intimidating.

So what would you say to someone who says: I know I need it, but I don't even know what to do, if I can even do this? What would you say to someone? - List from smallest to largest, when you go to the small one you will go, maybe I can. - Yes. - And then, when the second one leaves (gasps). Maybe I can (gasp). And your hope begins to increase because your level of success increases. - Yeah. - You know, the first time the kid rides a bike and you let go of the seat, (gasps) maybe he can.

That's all. And it's a behavioral thing because you're building trust and hope and you're saying this system will work. Maybe I can finally control my money. - Yes, it's so good. ANDI think when you get to the point in your life, and we say this over and over again, you say, I'm sick and tired of being sick and tired. Because I talk to some people like, yeah, I think I want to get out of debt, maybe, something like that. (laughs) I'm like, yeah, that probably won't happen because getting out of debt is hard, right? It takes sacrifice, it takes intentionality.

So what would you say to someone? Because a lot of people watching are about to get out of debt. So what encouragement would you give them? - It's hard. But is it worth it. It's difficult, but it's worth it. You know, putting up with your spouse is hard sometimes, but Sharon and I have been married for 37 years. It's worth it. I get to play with my grandkids, my babies, and you know, it's worth paying a price to win. It's worth it, but it's difficult. If it were easy, everyone would be rich. - (laughs) Very good, very good.

Okay guys, that's it! Baby Step 2. You heard it straight from the horse's mouth. (Dave laughs) Is that a saying? - It could be the mouth. - Is that a saying? (Dave and Rachel laugh) Okay, okay. Well, we'll bring you back to the show later in the episode to talk about another Baby Step, so thanks for being here. (upbeat music) Once you are completely debt-free, except for your house, the next step is Baby Step 3, and that is to save three to six months of expenses in the bank. A question I get asked a lot is: Well, should we have like three months of expenses or should we have more like six?

And I say, it doesn't really matter. Where you want to go. And I'll be honest, it's funny. Typically, many men arrive at about three months. Once they are three months old, they say, okay, let's move on, Baby Step 4. A lot of women say, I like to be around six months old. Women's biggest financial fear is lack of security. So naturally they will lean more towards six months. I know what I do. We actually have an emergency fund for our emergency fund because that way I just want to make sure we have a lot of savings. It just makes me feel better, which is why I personally lean more toward six.

Winston is probably like most guys. He'd probably lean more toward three. But whatever you want to do. Now, these expenses are your operating expenses. It's not about you, you know, making a budget, okay, if I want to go fashion shopping or if we go on vacation. No, no, no, your operating expenses. For example, what is the amount of money you need to keep the lights on, keep food on the table, and keep things running as they would otherwise? That's what the emergency fund is for. It's there in case of job loss, it's there in case of a medical emergency.

Anything that comes up that is unexpected and a major emergency, this fund is there to help you. It's like your main safety net between you and life. And you have to think of this as insurance, not an investment. Say it with me on your phone or computer: Insurance, not an investment. You're going to save a ton of money in the bank and some of you will say, oh my gosh, we could invest this and make a lot more money. It's sitting there, generating nothing. Listen, that's what it's for. You have to think of this as insurance.

Because you want to be able to keep it liquid, you want to be able to get to it quickly. So I would recommend having this in a money market account, or you could even have a traditional savings account. But it has to be there so you can access it quickly. I went on my Facebook community and found some people who are in Baby Step 3, and this is what they said: "I feel like my worries have gone away thanks to a debt-free life and the fact that I was able to achieve the Baby Step 2 on schedule. Losing extra time to spend with my kids doesn't bother me anymore.

That was the very surprising experience I had. I listen to the podcast every day, write in my journal, budget religiously, and am intentionally positive 98% of the time "Single mother of two children here and it can be done." Melrose, you're killing it. What a great job. Tiffany said, "We stayed motivated by sacrificing a lot so we could see great progress quickly. We reviewed our budget frequently and forecast when we would pay off the next $10,000 and when we would be completely debt-free. ... It feels great to know that we were now on track to generating wealth rather than simply paying for bad decisions.” Guys, baby step 3: it's possible.

It's possible, and could you just sit back and imagine being debt-free and having three to six months of expenses saved in the bank? Incredible. It put you in a completely different place mentally and financially. Is so big. You can do it. Alright, next up is the man with the voice of God, Chris Hogan. (upbeat music) Welcome back, Hogan. - Thank you, it's good to be with you. - Thank you! Seriously, the last time you were there, everyone raved about it. They loved you, so I thought, I have to get it back. - Oh, they're so cute.

You are nice. You are all very kind. - Okay, now we are in the process of the small steps where you are completely debt free and have a fully funded emergency fund. So, small steps 1, 2 and 3 you do individually. Now you do Baby Steps 4, 5 and 6 all together. - Rachel, thank you for pointing that out because a lot of people get confused there. That's why it's important: you're doing 4, 5, and 6 at the same time. - But in this order. So, Baby Step 4 is— - Yes, this is where you're investing 15% of your household income into retirement-type accounts. Rachel, they can be a 401(k), 403(b), IRA, or Roth IRA.

It is very important to set aside that money every month. So, you want to register where it is done automatically; It's not something you have to think about. You can do this at your human resources department when you enroll in your 401(k). But listen, make sure you have an investment professional to guide you. There are many options for things you can invest in, but you need to make sure you choose the right ones. But as you contribute that 15% of the household income, over time what will happen is that you will start to build wealth. This is not money for a down payment on a home.

This isn't money for a wedding, and Rachel, it's not money for a vacation. So let that money sit there and grow for you. I promise you, it will put you on the path to becoming an everyday millionaire. - Because if someone withdraws that money early, what happens? - Well, there are many sanctions. I mean, I tell people you could lose 40% or more of that money in taxes and fines. So you don't want to do that. You want to leave that money alone, and if there's something you want to save up for, get an extra job, work overtime, get some cash.

But this is a dream background. Many people don't understand that with 401(k) and 403(b), what you are trying to do is save enough money to replace your paycheck later. Then, the money you are contributing will become your paycheck later in life. But we have to leave it there. Rachel, money has two best friends. - Oh, best friends. - Time and compound interest. So when you put money in your 401(k) and let it sit, it will grow. - So good. That reminded me that you guys, if you're on Baby Steps 1, 2, or 3, that means you're not funding retirement.

You are stopping retirement. That's going to scare some people because, especially people who have been doing it for a while. - It is. - The fact that they have to stop, they're going to be fine, right? - Good. Oh, you're going to be fine. And what I have said to people, because many people have said it. Chris, I don't want to stop. I told him: Okay, don't think this is stopping. Let's take a break. We're going to pause the 401(k) so you can put all your effort and attention into attacking the debt. And that's why it helps them to be able to see it.

And someone said, "Well, Chris, I feel bad." I say, "Yes, I feel bad about the debt. So move faster so I can start investing again." - That's good then, baby step 4: you're taking care of yourself with retirement. And then you move on to Baby Step 5, which finances your children's college. So, there are a couple of ways to do this. You can do this through an ESA, which is an Educational Savings Account. And this is great because it grows tax-free. Now, there is a limit on how much you can contribute per year and an income limit. So if you make too much money, you may not qualify for an ESA.

But if you do, the nice thing is you look at it and say, OK, let's say you have a newborn baby and you start investing $2,000 every year. When they turn 18, they will have $120,000 to go to college. I mean, it's phenomenal. So start early. Now, some people think, okay, it would be great if I had a newborn, but I have a 10-year-old. So if you do the math that way, if you finance it for just 10 years, say, maybe eight years, it's going to be around $38,000, which is still a big plus for saving for college. But if you can't do the ESA (again because you want to put more money into your college account, your child's college account, or because you make too much money to qualify), then you can look into 529 plans.

And a 529 plan, I would say, like Your Retirement: You'll want to go and talk to someone who is a professional at this because there are some bad plans out there. - There is. I don't like state-run ones. State-directed means that they choose what can be invested in. I want people to have freedom and options to choose what works for them. - Yes, so talk to a SmartVestor Pro for all things retirement and when you start having fun at your kids' college. But the beautiful thing about college is also that if you're at that point and you say, wow, I have a junior or senior in high school and we're not even in Baby, you know, We're doing Baby Step 4 and we're just now starting Baby Step 5.

You can still help your children go to college debt-free because people can still go to college debt-free today. - Oh, they really can. - It's true. - And Rachel, guess what? I tell people this all the time. They say, well, my son, I don't want them to work while they go to school. Well, listen to me. If you can. They can work and go to school at night, or they can work at night and go to school during the day. - Or part-time! I mean, yeah, it's crazy, I know. And in fact, students who work 20 hours a week graduate with higher GPAs than students who don't work.

Isn't it fascinating? - Well, and Rachel, they learn time management, they learn life skills that they will have to apply when they graduate. Oh, and by the way, there are scholarships and grants too, Rachel. I've heard you tell people that for years. - Yes, that's free money. And then also to parents: the number one tip in all of this is, if you have a student who's going to school soon, it's school choice. Choose a school you can afford. Private universities cost an average of $26,000 a year in tuition, compared to a state school, which costs around $14,000. Community colleges are sometimes free, depending on the state, and even as little as $5,000.

So, look at those options. Don't just assume, okay, my kids have to go to a private college or this big college to be successful. That is a lie. That is not true. So, you're funding, again, retirement with Baby Step 4, and then the extra money that you have, you're putting toward your kids' college in an ESA or 529 plan. And then you're going to put any other extra money you have into the house, which is Baby Step 6. - Yes, Baby Step 6 is about attacking and paying off the house. You know, a lot of people say, Chris, that the American dream is buying a house.

No, the American dream is to have your own home. There is a difference between buying and owning. Buying is where you signed the paperwork, right? I'm a former banker, I know. But by possessing it is when you attack it and pay for it. So, I want to say a couple of things to people. While you're doing Baby Steps 4 and 5, you're saving for your future, you're saving for college, I want you to put the extra money toward the house. An extra $200 to $300 a month will make a big difference when it comes to affording the house. And a lot of people, Rachel, never imagined they would own their home, right?

And this is where you have it. They will mail you the deed and that means you no longer owe it. So how do you get there? You have to do it intentionally. So looking at it, be careful, and budget is absolutely crucial. So if you're there right now and you have a 30-year fixed rate mortgage, I want you to get a quote on refinancing to a 15-year fixed rate. - That's good. - The payment is going to increase between 400 and 500 dollars, but we are talking about a difference of 15 years, Raquel. This is a big problem. So for people who are intentional, attacking and paying off the house is a big step.

But imagine this. Let's say you're a little behind on saving for retirement. Imagine that your mortgage payment doesn't leave you, right? Imagine whatever you're paying right now for a mortgage payment that doesn't leave you, but you can save more for college and then invest more for your future. It would allow you to catch up exponentially. So attacking and paying off the house is a big step. Don't listen to people who say: keep the mortgage for the tax increase. - For himtax increase, okay? That's a big lie. So explain that. - Yes, it makes my hair grow.

It makes my hair grow. He irritates me because he is not truthful and I want people to know the facts. You want to pay off that house, own it and eliminate the risk from your life. If you own it, no one can ever seize it. No one can take it away from you. That's why I want to encourage people to stay on the path. It leads you to progress. - Yeah, and most people with the whole tax deduction thing, mathematically speaking, are going to pay more interest than they would if they didn't cancel it, so. - Oh, it is.

And you have to itemize completely to be able to deduct it. And you can only deduct it for a certain number of years. Anyway, it's an excuse to keep a mortgage. - Pay the house, people. Pay the house. - Pay for the house, free up your money and be able to save for university, be able to save for your future or be able to take a trip and enjoy it, right? I want people to keep more of their own money. - So good. So guys, if you could imagine being at the end of that step, meaning you're out of debt, including your house, you're funding your retirement and you're funding your kids' college, you have an emergency fund. as if all things were taken care of.

At that point, you may even be self-insured, meaning that if something were to happen to you, you'll have everything under control. So you may not even need life insurance. But many of you probably aren't there yet and that's okay. But while you're working on the Baby Steps, you should make sure you have life insurance. And with the right amount of coverage you need, right? - Oh, it is. Life insurance is absolutely important. It's part of making sure your family is protected. And I also want to encourage people to make sure you get some quotes. Look at this and understand: Find out if you can save money because that saved money creates margin in your budget and that allows you to do more in other areas.

Rachel, it all comes down to being more intentional with your money. - Yes, it's so good. And Winston and I use Zander Insurance because they make it so easy. And you use Zander too, right? - Of course. - Yes, they are great. They will do all the work for you to make sure you get the best rates possible. That's why we recommend you get 10 to 12 times your annual income. So be sure to go to zander.com or click the link below. Alright, next I'll bring my dad to join us and we'll finish with the Seventh Baby Step.

The last and final Baby Step. - It's going to be fun. - It's a good one. (upbeat music) So our big saying around here is: Live like no one else, so you can then live and give like no one else. So our goal for you is not just to win with money, but to be able to win with money so that you can become an incredibly generous person. So, you all are here to talk about probably the funniest Baby Step. - I think so. - So at this point people are completely debt free, including their house.

They don't even have a house payment. They're funding retirement, putting money away for the kids' college. And now all that remains is to generate wealth and be incredibly generous. So, that's a lot of fun, right? - It puts you in a position to have fun like that. - Yes, so let's talk about the fun you can have and the importance of giving and truly living with that open hand. - Well, the first thing that happens to Sharon and me when we finally get there is that something strange happens. You say, I'll be fine. And you can take your eyes off him.

And as soon as you do, do you know what you see? Other people. And you see this need. And so the first thing that happened to us was some random acts of giving. But then it's like, you know, I had a great time, like at Christmas the other day, right? You know, a month ago, our company donated $800,000 to our team. One thousand dollars each for Christmas for 800 people. But I mean, it was fun! I had fun! I didn't like going, oh, I hate doing this. It was fun because we had the money and everyone had a great time.

And, you know, you just don't find people upset about generosity. - It's so true. And Chris, I feel like we talk about the joy of giving because giving really gives you that amount of joy that you can't get anywhere else. - It really is. I mean, Rachel, when you put yourself in a position to be able to be conscious, when the Lord asks you to give or do something and you have that leeway, you are able to do it with joy. And giving has a two-way blessing. You bless the person who receives it, but you also feel a blessing. - Yes absolutely. -And I'll never forget one time I was at Waffle House with one of my kids and I met the waitress.

Turns out she was about five months pregnant. Her fiancé had broken up with her. I mean, she had been through some things in life. And I felt in that moment that I knew what she was going to do. I knew she was going to leave a big tip. Well, my son saw the amount of dollars I put in and I said, "Okay, buddy, let's go." He says, "No, dad, we have to wait for your change." And I say, "No, no." Now you all know I can't whisper, right? I have been banned from 48 public libraries in the United States.

But I'm trying to get it out before she comes back because has anyone ever tried to block your blessing? You know you're trying to do something good? - Yes, yes, yes, yes, totally, totally. - Well, it creates discomfort, doesn't it? Anyway, I tell him, little one, if you don't get up I'm going to electrocute you, you know? So I take him outside and we approach the side of the building. And she comes back and sees the dollar amount. And I will never forget that she picked it up and took it to her heart. And that expression, and I will never forget being there with my son where I told him that it is good to do good.

You need to do good. But Rachel did something that you talk about in your book, Smart Money Smart Kids. You learn more than you teach, right? And my son caught me doing something good. - You see, very well. - And I will never forget that moment. He stuck in my head. And that's why I want people to give. I want people to do it, but he lets your kids see you. Let them be a part of it and watch what happens. They also learn to give. - Totally, I think that's a great point. So for you working on this plan, you may not be on Baby Step 7, but the beautiful thing we teach, what we are unconditional about, is that you must give no matter where you are in the process.

So even if you're getting out of debt, giving is still at the top of your budget because it's a habit you create. And many people believe that if they made more money, they would give. And that is not the case. It's not, it's not a math... - You would give more, but you won't start giving. - So it is so. It's not a question of mathematics, it's a question of the heart. Something like what we talked about before, but it's true. So, make it a habit now, giving a little until you can give a lot here in Baby Step 7.

Well, I think it's really fun that you guys can talk about this because it's a point. for people to look at that Baby Step and work towards it, because what you can do in your life and the lives of others is just amazing. And just like you said, it's true that there was a study done that said you have momentary happiness when you receive a gift, but you have longer-term happiness when you're actually the giver. And what that does to change you and your family, and it's... it's just... I say it over and over again, but it's true.

It's the most fun. - Yes it is. - It's the most fun you can have with money. So if you had one last piece of encouragement for people throughout all of the Baby Steps, what would you say? - When you pay a price to win, it's worth it. We say it all the time, and the Baby Steps are a process that you're going through, and you're living like no one else, and then living and giving like no one else. What if you could do some of the things we're talking about here and it wouldn't affect your life because you've done a good job?

You can do it. - It's good. - Yes, I would tell people that regardless of where you are now, don't get distracted and believe in yourself. You know, it's a plan worth working on and I promise you, once you get there, you'll look back and be able to encourage other people. So stay connected. Keep understanding why you are doing this so you can be a blessing to others. - Very good very good. Well, guys, if that makes you not want to start this plan, I feel like you're not alive watching this. So I'm excited for you and the journey you're on and the fact that we can all sit here and help with that is a real honor on our part.

So thank you guys for being present. Seriously, I really appreciate it. - Thank you. - Very cool. (upbeat music) - Well, it's my favorite moment on the show. That's right, she celebrating them with She Works Hard Saving Money. Sarah said: "As soon as we finished Baby Step 3, we started an international adoption and now help others adopt. I started a group to help people come up with ideas to raise funds for adoption." That's great, Sara. I love that. Cassandra said: "We had used, mismatched furniture for 10 years. We agreed that when our mortgage was ¾ paid, we would celebrate, so we sold the old furniture and bought this.

It makes me very happy to have matching furniture and I know that "Nothing will compare to that mortgage canceled in 2019." How wonderful, Kassandra. Kelsey said: "Three years ago, my dad graciously gifted my husband and I our honeymoon hotel in Maui. My dad travels all the time for business, so he has saved quite a few hotel rewards from his business trips , and has also been through FPU with my mom. I guess you could say that they are living and giving like no one else. Even today we feel honored and grateful for such a generous gift." I love that, guys.

You guys are killing it. So remember, if you want to post on social media what you're saving for or how you're working to save money, post a photo and put "she works hard saving money" as the hashtag. Well, this was a very fun episode. I hope you feel encouraged and have the tools you need to start earning with your money. Now, if you want to take it a step further, you must go through Financial Peace University. And Chris Hogan, Dave Ramsey and I, we're all in this. It's the proven program that will help you never worry about money again.

The average person who goes through Financial Peace University pays off $5,300 in debt and saves $2,700 in the first 90 days. Guys, that's crazy. Alright, well, for everyone watching, thanks for tuning in to this episode and thanks to Dave Ramsey and Chris Hogan for coming on and sharing their wisdom. And you guys, always remember to take control of your money and create the life you love.