Personal finance might seem boring at first – all those numbers, all those bills – but it’s when you start to examine the reasons why you do the budgeting and planning that can bring excitement to otherwise mundane, repetitive tasks.
Dave Ramsey is well-known in the finance world for his simple 7-step process of getting out of debt and building wealth. He’s written multiple best-selling books and hosts a daily radio show with the simple mission of helping people with personal finance. (And I’m the Ramsey-endorsed CPA in the central Illinois area!)
Ramsey’s 2014 book The Legacy Journey takes a much more in-depth turn toward the “why?” behind Ramsey’s process. Like his other material, this book covers a Biblical perspective to money, but focuses on the important reasons we should be eliminating debt, building wealth and giving money away – and not simply how to do so.
As Ramsey said, this goes from learning about money to learning about wealth.
There is a key “problem” in personal finance, Ramsey points out: “If you are diligent and wise with your income, you will become wealthy over time.” So, then what? What do we do with our accumulated wealth? Is it wrong to be wealthy?
Ramsey covers the framework that works alongside his seven “Baby Steps” to getting out of debt and building wealth which he lays out as “Now-Then-Us-Them.”
Taking control of your finances is Now, getting the future taken care of is Then, creating a family legacy is Us, and finally, the focus is Them: leaving a legacy for others, which means meeting the needs in your community and around the world.
In order to cultivate a healthy money attitude, we should consider ourselves the managers of our money, Ramsey says. Owners often become prideful and greedy, whereas managers focus on being good stewards of what they have been entrusted with. When we feel that we’re the owners instead of the managers, that’s usually the underlying source of discontentment, which sparks dangerous behaviors like trying to live beyond our means.
Once we have our finances in order and have eliminated debt – the Now and Then pieces of Ramsey’s framework – we can begin Us, which is your legacy for yourself, your marriage, your children, and extended family and friends.
Building wealth takes time, patience and wisdom, Ramsey reminds us, but people overlook the fact that our relationships have as much or more impact on our wealth and legacy than our investment strategy does. Anyone can retire a millionaire, he says, but a large part of positive financial habits and attitudes is, first, surrounding ourselves with other people who also have positive financial habits and attitudes, and second, teaching those positive habits and attitudes to our children.
Finally, you reach the “THEM” stage. Ramsey declares: there’s not a set amount of wealth in the world; there is enough for everyone, and “if we all work together, we can combine our efforts and light up the whole world.”
“When we know our family is taken care of and we’ve set a fantastic legacy in motion, we look around and start to see the whole world through God’s eyes,” he writes. “We see needs we never saw before. We see ways we can help people next door and around the world. And our response is ‘I can help!’”
Our real legacy, Ramsey sums up at the end of The Legacy Journey, is not what we do with our lives but what happens in the lives of our children and grandchildren – and the key to having an enduring legacy is to practice generous giving throughout every stage of your life.
“Your legacy might be setting your kids up to be the first generation to be debt-free, or to be free of whatever you think has gotten in your way,” he closes his book with encouragement. “You can choose today to put an end to wrong views and wrong behaviors that might have derailed past generations in your family. You can choose to do things differently and safeguard future generations to do things ever better.”