Here are 10 things we say that keep us broke:
- I’m too ______ (old, young, in-a-middle-age-crisis, broke) to save money.
- I deserve ________.
- I did it to improve my credit score.
- My student loan/mortgage is “Good debt”.
- He told me I would _______.
- The “Little Man” can’t get ahead.
- I can write off the interest on my taxes.
- How much a month?
- I have retirement covered, Social Security _________.
- When I _______, then I’ll be able to ________.
If we stop saying phrases like these and start paying attention to our money, we can stop paying interest and begin building wealth.
UPDATE: Dave Ramsey read this post on his nationally syndicated radio show on July 23, 2010. For more, check out this post: http://www.moneyplansos.com/dave-ramsey-says-10-broke-things/
Lara says
I’m too old to save money, and am already set for retirement.
I deserve to retire comfortably.
I DO it (use credit cards faithfully)to improve my credit score in order to get lower cost insurance.
My student loan is “Good debt”, as it put me in a position to make a huge salary.
He told me I would make over a half million a year, and he was right.
The “Little Man” can’t get ahead, so don’t be a “Little Man”.
I can write off the interest on my taxes until I pay off my mortgage.
How much a month was that house that I now have paid off?
I have retirement covered, Social Security will probably not exist when I retire.
When I retire, then I’ll be able to do pretty much whatever I like.
MoneyPlanSOS says
Thanks Lara! I was going to write another post called “10 ways to say that will keep you from being broke” as a rebuttal to this Top 10 post but you did most of it for me! I will still post it and we can compare answers (sounds like my kind of fun)!
BTW – WAY TO GO on paying off your house and having money in retirement.
Richard says
Lara- So, what do you do for a living? I’m suddenly open to a career change!
😀
Jody says
When you make 500k a year, you can save money, don’t have to worry about Social Security, etc. But most of us don’t make that kind of money and these types of attitudes do keep people in debt and unprepared for the future. I probably am considered the little man, but I am doing everything I can to get ahead. We live on my salary (42k a year – insurance, taxes, retirement, college planning) and my wife gets to stay at home – her choice and only owe on our mortage which we are making extra payments on and will pay off early. By the way, I do have a masters degree, well educated and love the job I have and wouldn’t trade it in for a 500k job if I had the opportunity and didnt have a penny in student loans through undergrad or masters, so you can still get a great education for a well paying job and still come out debt free.
MoneyPlanSOS says
Great job guys, it sounds like you are doing really well (by the truly “average” millionaire’s standards, not the standards most American’s believe in). Lara was the first reader to comment on the blogpost that Dave read on the air, and it showed up on the link Blake put up on the FaceBook post.
Thanks so much for posting on my blog. I really appreciate it.
Yazmin says
You just got a shout out on the Dave Ramsey show for this post! How awesome is that?
MoneyPlanSOS says
Thanks Yazmin! It was a real surprise to me (I was working and couldn’t listen to it until I downloaded the PodCast).
I really appreciate you taking the time to post a comment.
the Dad, Climbing Out says
GREAT STUFF. So true. I am totally guilty of “I can write the interest off on my taxes”!
The funny thing is I was just repeating crap I’d been told by others… ugh!
Cheers,
the Dad
MoneyPlanSOS says
Yeah, I did too.
By the way, your website looks really great. I’m going to spend time reading yours, thanks for reading mine.
Financial bondage says
Very good list. We all have used these more than once if we are honest about it.
DeAnna Troupe says
Here’s a fill in the blank (that my husband likes to use) for the last one…
When the kids are grown we’ll be able to save more money. (eyes rolling)
nadege says
i feel like my parents use this as well. the youngest is 5, oldest 23 so the gap is huge. but I really worry about their retirement plans…they have not saved anything, aside from the cars and house…any words of wisdom to get them to start saving?
helen says
Plan on saving a little extra yourself, so you can help them, if needed.
Kimberly says
Lara,
I think this post was meant to help people figure out what they are doing wrong. n Good for you that you are so good with your money, but I don’t think this was meant to be a vehicle for you to show how totally amazing you are. Humility really does goes a long way.
Psalms 138:6
Though the LORD is on high, he looks upon the lowly, but the proud he knows from afar.
Proverbs 11:2
When pride comes, then comes disgrace, but with humility comes wisdom.
By the way, fantastic topic. It really got me to thinking about what I can do to improve my financial situation.
MoneyPlanSOS says
Kimberly, thanks for taking the time to comment on my blogpost! I hope Lara (she was the first person to comment on my post and it showed up on the link Dave Ramsey’s team posted on FaceBook) reads all the encouraging comments others have left here.
Thanks again. Keep working the plan!
Danaye Taylor says
Lara was only filling in the blanks, you can’t be upset at her for the good choices she made or the poor choices you have made. I don’t see it as being proud, I see it as giving the opposite statements that can bring sucess instead of failure. Thanks Lara for taking the time to post.
Tami says
Thank you Lara for your post! Specifically, I appreciate your comment about 1) using credit cards – some credit use DOES help your credit score and allow you discounts on other things; the key word here is ‘some’ as too many people, and I use to be one, have too many credit cards; AND 2) a student loan IS good debt! I’ve believed this for years and keep telling my kids that it’s nearly the cheapest debt out there and is also an investment for your future!
MoneyPlanSOS says
Thanks, but I believe you are talking about the comment by a reader named “Lara”. She uses credit cards and believes student loans is good debt. I don’t.
helen says
Student loans are “good debt” to the extent that they are used for necessary school expenses. Between I truly need and I “gottahave” there is a deep chasm filled with a lot of trouble.
You wouldn’t believe the stuff kids abandon at the end of term because it’s too much trouble to take home. [Or it would be real trouble, if “home” found out what they spent money on at school?]
Textbooks and tuition “good”… large flat screen TV’s and wild weekends on the credit card “not so good”.
Brad Shimomura says
Great post, I haveto disagree with the readers about student loans being “good debt”. No debt is good. College is an amazing experience that is beneficial to everyone. However the best way to do that is to pay cash. That means either the students work really hard on scholarships, at a job, or parents think far enough ahead to save/ invest money properly for education.
MoneyPlanSOS says
You got it Brad, you are right on! I really appreciate you taking the time to read it and posting a comment.
travis says
Sure paying cash is great in a perfect world, but im going to grad school for.a year to make more than a years worth of tuition more than i was before. So ill be making 3x what i was and have it paid for in a year after i get to work
Lima says
Don’t forget that people can also join the military and have their college paid 100% while on active duty. And also the GI Bill pays $80,000 for school after you separate from the service.
shane says
I don’t believe there is such a thing as GOOD debt. A mortgage may be an acceptable debt because it generally what you are paying for goes up in value over time, and unless you have a bad mortgage, you have a tangible asset you can sell and pay off that debt. You can’t do that with a student loan. It is an intangible asset, that’s why it is BAD debt.
Some insurance companies may charge more at first if you have no credit score. But after you have been with them for a while and established that you do pay, they could lower them. If not, go with a different company. The one I have does not do a credit check. Personally, I would pay a little bit more in insurance and never have to mess with credit.
MoneyPlanSOS says
Way to go Shane, I agree with you. Lara was the first to comment on the post (and for some reason that showed up in the FaceBook link). From what I gather from her post it seems she has already reached retirement and is comfortable with her way of life. It isn’t my place to try and change her, and I applaud her accomplishments from paying off her house and saving for retirement – she’s ahead of many Americans.
Thanks for commenting on my blogpost. This is the most fun I’ve had with the blog in a while.
BryanW says
“I deserve…” is the most dangerous phrase in the English language. It fosters greed, encourages dishonesty, suppresses integrity, leads people into debt, and destroys families. True success starts with the understanding that we don’t truly deserve anything. That is the foundation for the gratitude and stewardship people need to become all that they were made to be.
MoneyPlanSOS says
Right on Bryan. Godliness with contentment is great gain – 1 Timothy 6:6
Nicole Bateman says
Just heard your blog address on Dave Ramsey…good list! We’ve been especially guilty of #8 but changing that as we speak!
MoneyPlanSOS says
Yeah, #8 is common here in America. And if you saw Lara’s comment (it showed up on the link Dave Ramsey’s producer put on FaceBook) it appears she was content with her ways and not willing to change.
Thanks for taking the time to read my little blog, I really appreciate it.
Lori Christenson says
Most students carry student loan debt for a decade and do not make a half a million. Many college students are financing vacations with student loans and other unnecessary expenses. Most americans do not use credit cards responsibly or home mortgage loans. Lara, you are an exception. I am a person who needs to avoid credit and loans as a result of past abuse of debt. Dave’s steps to debt free work.
MoneyPlanSOS says
Way to go Lori, sounds like you will have a bright future ahead of you. Most people have read the link Dave Ramsey’s team put on FaceBook which also showed a comment from a reader. My beliefs are a lot like yours, and Dave’s comments when he read my blogpost were right on the money! Debt is not a tool, people need to have personal responsibity, and those who plan their money win with money.
Keep working the plan!
oneminute2midnight says
There is such truth in this, we live in a world where we “need” or “must have”. A world where we start to, for lack of a better example, “worship” our stuff and it starts to own us.
Anna says
No debt is good. It just puts you in bondage to a bank master. Good post.
Clair says
I have succumbed to the lure of .. “for only a few dollars more you get…” too many times
Cody says
Laura, you are absolutely right about some things, but I think you miss the broader point. It sounds you have worked hard and been able to have a high income. You are applying these statements to your reality now that you have “made it” when they are really meant to help people who haven’t made it get to where you are.
Your point about being too old (since you already have saved a good retirement) doesn’t really help those that aren’t in your shoes. This post is saying that instead of having the typical I’m-too-old mentality, older people should still start saving to at least mitigate the damage from not saving earlier.
You do deserve to retire comfortably because it sounds like you worked your way there. The “I deserve _____” on this post is addressing those of us that need to focus on saving and working hard like you did instead of always thinking we “deserve” some toy now that will be worthless later. If you’re still clawing your way out of debt with a tight budget, saying you “deserve” a Harley with payments won’t help you get there. That’s the problem we’re talking about here.
As for credit cards, you may have the control to do well with them, but statistics show that most of us just don’t. Like an alcoholic with a drink, if you can’t handle the temptation, better to just stay away from it. Besides, studies have also shown that most credit card users spend roughly 10-15% than people using cash. That’s more than enough to wipe out any savings from points or “cash back.”
Student loan debt for the right degree can be a good deal, but many people borrow blindly without thinking about their future earning capacity. $150000 in student debt to get private school degree for a future public school teacher isn’t a great idea when the same teacher could get a solid degree from a public school with little debt.
If you write your mortgage interest off on your taxes just long enough to pay off your house, that’s awesome. The problem is when people could pay off their house more quickly but decide to keep a mortgage longer because “I’ll lose my deduction.” The math on that one just doesn’t work out. That’s not just from common sense math.
These suggestions can help alot of people modify their behavior so that they can “make it” like you did. Please don’t discourage people from taking this advice by mischaracterizing these this helpful advice.
MoneyPlanSOS says
Thanks Cody. I hope Lara, the first reader to post a comment to my blogpost, reads your comments and can learn from people like you and I.
Thanks for taking the time to read and post your thoughts on my blog. Keep working the plan!
Paul says
The gap between the haves and have not’s are increasing. Education can help achieve a potentially good income but that’s not enough. After having the rug pulled out from under you when all you’ve worked very hard for in the past is now gone, it can make a person really stop and think about material possession and the extreme values attached to them. If and when this economy turns around again I think I will look differently at what material possessions offer in the long run. For all of us who have lacked the accountability when running up the credit card debt, I think this is the best reset/reboot the economy has taken in a long time.
MoneyPlanSOS says
Amen Brother. I have received a lot of comments after Dave read my blogpost, and so many of the FaceBook fans saw the comment from a reader named Lara who seemed to disagree with a few of the beliefs that myself and so many other Dave Ramsey listeners have about money. Your comments are well thought out, and I appreciate you taking the time to comment.
Keep working the plan!
Amy says
I am not sure we will ever get out of debt. We are struggling right now and our $1,000 emergency fund is gone… who knows when we will have the funds to get it back… I am content with what we have. I only wish that we had a little more to pay our minimum payments…
Peggy says
10 things we say that KEEP US ON TASK:
.
1.I’m too old NOT to save money. I WILL start where I am and have SOMETHING for retirement.
2.I deserve to be debt free, have an emergency fund and some money for retirement.
3.I did it to improve my credit score or so I thought, but what I did was raise my debt score
4.My student loan/mortgage is “Good debt”. NOT!!! My student loan is going down!
5.He told me I would be able to double up on payments to pay it off faster. HE LIED!
6.The “Little Man” can’t get ahead, if he accepts where he is and does not try. Besides, who needs another head?
7.I can write off the interest on my taxes, but I can make more if I invest wisely.
8.How much a month is a phrase that has been deleted from my vocabulary.
9.I WILL have retirement covered, Social Security will not be enough.
10.When I am debt free, have a fully funded emergency fund, have money invested for retirement, have a solid sinking fund in place, , have all the insurance I need in place (including long-term-care insurance), have some money put aside to help my great nieces and nephews with college, then I will be able to give up my part-time jobs and have FINANCIAL PEACE!
Jolyn@Budgets are the New Black says
Just listening to Dave’s podcast! What a great list –I’m going to share it with my facebook fans today. I think you need to remind Dave who you are! It was obvious that someone (“Blake”?) just handed him the list, and he had no idea you are one of his ELPs and had posed for a picture with you! (Although how many of those does he do in a given week, eh?)
Congrats on the shout-out!
James says
While I agree with most of this post, I will say that I disagree somewhat about school debt. I am in medical school, and unless you make a huge salary, or from a wealthy family, you’re not going to be able to pay the 40,000+/year tuition fees plus books and equipment. At that point, if you can afford 40,000/year extra, you’re most likely working a full time job, thus preventing you from going to medical school anyway. So, you get loans. Some scholarships are available (military, national health service corps…) but they don’t accept all applicants. Plus, if you have a family like mine, the health insurance costs are high as well. I don’t like debt, but to reach my dream of becoming a doctor, I feel that student debt is acceptable, with the goal of eliminating it quickly after you become gainfully employed (avoiding doctoritis…).
the Dad, Climbing Out says
Thanks, Steve!
Tammy says
Here are a couple of lies I was told:
1) Don’t sell your high earning stock to pay off your student loan. That is a low-interest loan and this stock has earned 15% year over year. (That is a statistical impossibility for it to continue.) The market crashed directly after that statement. I had pulled my money out, but as I had worked 80- to 100-hour weeks for several years on a project, I “deserved” a vacation and used the money on that rather than paying off the debt as God told my heart to do. (I do have lovely memories and pictures… How much more could I have done in time had that debt been paid for then, though?)
2) It’s a sure thing… Never put yourself in debt on a “sure thing” or take away from your savings for retirement or children’s education on one. I was starting a business that was “sure” to get off in a hurry – clients lined up and such. Just needed signatures. The budget was suddenly cut for two big customers and I owed on the debt I took out to try to get ramped up quickly. (Others I have known lost retirement and/or education funds on other types of “sure things.”)
While these are not “fill-in-the-blank” per se, they are still lies that we are told or we tell ourselves when our gluttony and pride get ahead of our senses. I thought I had learned before I made those mistakes, but sometimes Temptation comes in guises that are unique to us and blinds us to the truth.
The fill-in-the-blank approach is a good way to be mindful of those traps that we can put ourselves in or be led into. Thanks for the reminder.
ihab says
it’s only a hundred dollars, what’s a hundred dollars
april says
@travis- that is if you get a job or your job lasts a year…there are MANY people out here with college degrees (undergrad and grad level) and can’t find a decent job! I am still paying on loans from college, but if I could go back 20 years or so and live again, I would follow the plan of the total money makeover (which I just learned about a month ago). I just began the plan, and already notice a difference in my attitude toward not only my finances, but life in general…Thanks Dave Ramsey!!!!!!!!
BibleDebt says
Great post! Congratulations on receiving a section on the Dave Ramsey show!
MoneyPlanSOS says
Thank you. It’s been a great weekend. BTW – did you see the post Dave’s team posted that expanded on the topic? “20 Things Broke People Say” http://bit.ly/aOyhSc
Lima says
I personally don’t understand school debt. You pay $50k on an education to get a job making $30k? It’s almost as if a degree has replaced good old fashioned hard work in our society. I try to observe the spending habits of poor people versus rich people and it seems like student debt tells a majority of people that having debt is ok. After the student debt comes the computer loan, car loan, clothing store credit card, and it never ends. Most young people are so far in debt before they even have a mortgage. Just some food for thought.
Don says
This is what I call the “Just Factor”, It’s just 10 bucks or just $50 a month, just a little something, Just do it, you know you will be happy you did! The Just Factor breaks the budget everything
Steve Stewart says
Oooo, that’s a good one Don!
Melissa says
When I feel down or sad, I go out and buy things for myself, makes me feel better, EVERY TIME, especially when I get jewelry. 🙂
Janine says
I am very happy to say that I’ve been on the road to recovery for 3 years now. Went through a divorce that left me selling my house and renting and incurring alot of debt when the sale fell through and I was actually paying rent and mortgage at the same time. I joined a credit counseling agency that pays my debt in full but negotiated down the interest rate, and only have 6 more months of payments. Then I will be DEBT FREE! and able to save to buy a home again. I have no more credit cards, destroyed them and only use my debit. If I can’t afford to buy it, then I don’t get it. It is amazingly freeing knowing that what I spend every month is money I have to spend.
But.. I do have to put money in savings and am very behind in that department. And I do carry a car loan.
Steve Stewart says
Thanks for continuing the conversation!
Michael Ervin says
NO one in my family is Good with money lol.
Well this is almost true . Working on becoming debt free. one last bill to go.
JenMcDonough says
MoneyPlanSOS classic blog post on common phrases that keep people poor. GREAT language to avoid for those looking to Live Beyond Rich. Another one is “If only I had…then my life would be perfect”.
Live Beyond Awesome!
Jen
Sarah says
Well, – unless we learn to think for ourselves, look after ourselves and become accountable – nothing is going to change. My ex husband was that way – inactive, childish and demanding, now he’s sitting on his butt all-day making puns about masturbation. If you don’t strive, you lose it. Great post. xOxOx Sarah
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