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💫 Summary
The video discusses the importance of having financial goals and a budget to achieve financial success, emphasizing the five foundations of saving, getting out of debt, paying cash for major purchases, building wealth, and giving. It highlights the significance of having an emergency fund, avoiding debt, and changing priorities to prioritize saving for a secure financial future. The speaker also addresses common misconceptions about money and emphasizes the importance of personal responsibility in managing finances.
✨ Highlights📊 Transcript
Having a budget is crucial to winning with money, and the five foundations of controlling your money include saving $500 in an emergency fund.
00:43
Without a budget, you won't win with money.
The budget is a written plan that tells every dollar where it's going.
The five foundations of controlling your money include emergency funds.
The first foundation is saving $500 in an emergency fund.
The video discusses the five foundations of financial success, including paying cash for a car and college, and building wealth through wise investments and giving.
02:52
Debt, including car loans and student loans, can hinder your future opportunities.
The first foundation is to save a $500 emergency fund.
The second foundation is to get out of debt.
The third foundation is to pay cash for your car.
The fourth foundation is to pay cash for college.
The fifth foundation is to build wealth and give generously.
Emergencies are inevitable, so it's important to have an emergency fund to avoid going into debt.
05:49
Emergencies will happen, so it's important to expect them and have money set aside.
Not having an emergency fund can lead to relying on credit cards and accumulating debt.
Start by saving $500 in a separate bank account for emergencies only.
Keep the emergency fund far enough out of reach to avoid spending it impulsively, but close enough to access it when needed.
It is important to keep track of your savings for different purposes and have separate accounts for emergency funds.
08:45
Keep a ledger to track the amount saved for different goals.
Separate the savings for different purposes to avoid spending money on the wrong things.
Emergency funds should be kept in a completely separate account.
Prioritize savings by considering important scenarios like saving for the life-saving vaccine for your child.
Savings is important for various reasons, but many people have a disconnect in understanding its significance.
11:40
According to the Employee Benefit Research Institute, 58% of American workers have never calculated what they need for retirement.
59% of workers hope to have a standard of living equal or better to their working years, despite not calculating their retirement needs.
Money is amoral and its impact depends on how individuals handle and use it.
00:43my good friend the late great Zig Ziglar
00:46used to say if you aim at nothing you'll
00:49hit it every time that means no matter
00:52what you're doing you need a target you
00:54need to focus on something it's like
00:56running a race with no finish line how
00:58do you know who won you don't and that's
01:01so true and your money too we talked to
01:03people all the time students and adults
01:05who say that they're winning with money
01:07but when we start to drill down a little
01:09bit and ask them to explain how they're
01:11winning they have no idea they have no
01:14goals in mind to really let them know if
01:16they're winning or not they're clueless
01:17you guys if you don't have a plan with
01:20your money you're lost and that plan
01:22starts with a budget you're going to
01:25hear us say this a lot throughout this
01:26class and seriously I don't care if
01:28you're 15 or 55 if you're not doing a
01:31budget you're not going to win with
01:33money period the budget is your written
01:36plan it tells every dollar where it's
01:39going trying to manage money without
01:41doing a budget is like driving a car
01:43blindfolded sure you'll go somewhere but
01:46you have no idea where you'll end up or
01:48how much damage you'll do along the way
01:50getting there so the budget is just
01:52going to be a given we'll teach you how
01:54to do a budget even on a students income
01:57and with everything else we're doing in
01:58this class we're just going to assume
02:00you're doing a budget every single month
02:03like we teach but beyond that we're
02:06going to walk you through what we call
02:08the five foundations these are five
02:11specific steps that you'll take as you
02:14get control of your money and look
02:16toward the future the first foundation
02:18is all about emergencies you're going to
02:21save five hundred dollars in an
02:23emergency fund that means you're going
02:26to put five hundred dollars in the bank
02:28and you're not going to touch it for
02:30anything even purchases it's there to be
02:33your little buffer between you and life
02:35we're gonna talk a lot more about this
02:38foundation later in the chapter the
02:40second foundation is just as important
02:42get out of debt our culture gets pretty
02:45confused about debt these days so let me
02:48clear it up for you
02:49debt is owing anything to anyone for any
02:52reason a car loan debt credit cards
02:57yet throwing 50 bucks for mom and dad
02:59for concert tickets debt student loans
03:02for college big debt huge debt debt robs
03:06you of your future and kills your
03:08opportunities we're going to talk a lot
03:10about that later okay
03:12the first two foundations clear away the
03:15clutter and get you on solid ground now
03:18it's time to crank it up a notch
03:20the third foundation is pay cash for
03:23your car that's right we don't do that
03:26remember that means you're never ever
03:28going to take out a car loan you're
03:31going to work and save money to pay cash
03:34for a car now the fourth foundation pay
03:38cash for college we're going to talk a
03:40lot about how to pay cash for college
03:42later in this class but for now I want
03:45you to understand that student loans are
03:46not your friends there will be an anchor
03:48around your neck for decades if you play
03:51this game the fifth foundation is my
03:54favorite and it's definitely the most
03:55fun build wealth and give a lot of it
03:58away
03:59we'll talk about investments later in
04:01the course and trust me anyone can
04:03become a millionaire in this country
04:04don't let the talking heads on the news
04:07or your whiny broke neighbor convince
04:09you otherwise if you do the stuff we
04:11teach you you will build wealth and you
04:15know what the most fun you can have with
04:16money is its giving it away to help
04:19someone and I'm not talking about the
04:21government coming in and taking your
04:23money and giving it to other people I'm
04:25talking about you making your own
04:27decisions about how you can help other
04:30people if your generation actually took
04:33control of their money and built wealth
04:35and understood how amazing it is to
04:38really help people through giving wisely
04:40then the world will become a much better
04:42place so that's the five foundations
04:45number one safe for a five hundred
04:47dollar emergency fund number to get out
04:50of debt number three pay cash for your
04:52car number four pick cash for college
04:55and number five build wealth and give
04:58that's the framework of your financial
05:00journey and will keep coming back to
05:02these five things throughout this class
05:04these foundations will become your
05:06measuring stick to see whether or not
05:08you're really
05:09winning with money
05:27let's talk about the first foundation
05:30remember the first foundation is to say
05:32500 dollars in an emergency fund okay
05:37so what's that mean what is an emergency
05:40well when you're in high school you
05:42aren't going to have the same kind of
05:44emergencies as your parents you're
05:46probably not going to have to worry
05:47about replacing the roof on your house
05:49or paying medical bills but you may have
05:52to deal with a flat tire sometime or you
05:54could drop your cell phone in the toilet
05:55what well people do it when that happens
05:58you need to have money on hand to cover
06:00the unexpected emergencies but here's
06:04the truth there's really no such thing
06:06as an unexpected emergency emergencies
06:10are going to happen expect it now I
06:12don't care how old you are you're gonna
06:13face some urgent surprise emergency
06:16expenses and if you don't have the money
06:19to pay for it then debt will start
06:21looking like your answer like an easy
06:23answer and that's how a lot of people
06:25end up buried under a mountain of debt
06:27they just never plan to have an
06:30emergency and when something happens
06:32they reach for a credit card and trust
06:34me a real emergency is the last time you
06:36need to go into debt debt never solves a
06:39problem at best it delays one problem
06:43while creating another one it's a trap
06:45and it can ruin your life so for now
06:48you're going to put $500 in the bank now
06:53when you're a little older and out of
06:54school will grow that emergency fund
06:56into a full three to six months worth of
06:59expenses but we don't have to worry
07:02about that today today we're just
07:04focused on the $500 and since this is
07:07for emergencies only you put your
07:09emergency fund in the bank
07:12literally you really do that and it
07:14needs to be far enough out of your reach
07:16that you can't run and grab it when the
07:17pizza guy rings the doorbell but it
07:20needs to be close enough for you to get
07:21your money whenever you really need it
07:24now don't mix this with other money if
07:27you've already got a bank account that
07:28you used for regular expenses then I
07:31want you to open a separate account to
07:33keep your emergency money in if you keep
07:36your emergency money in the same place
07:38your iTunes and your Amazon money and
07:40and when you're gonna have to eat then
07:42your emergency funds going to disappear
07:43because everything looks like an
07:44emergency like I said it needs to be far
07:48enough out of reach that you can't spend
07:51it by accident or by impulse but close
07:54enough for you to get to it when you
07:56really need it
07:57it's financial talk or than attitude
07:59you're listening to the Dave Ramsey show
08:02up next is Dallas Texas Riley is calling
08:05hi Riley what's up hey Dave should I
08:08have two savings accounts one for a car
08:10and another for emergencies
08:12I think that's a great idea I wouldn't
08:15have 10 savings accounts but I would
08:17have two I recommend for adults that are
08:21out there
08:21that they keep an emergency fund that is
08:24completely separate from their other
08:26savings and that way you don't
08:28accidentally think buying a car buying a
08:30car or buying a couch is an emergency
08:32because we all know in our brains that
08:33it's not an emergency but boy when you
08:35get in the heat of the moment you need
08:36that money oh it's real easy to use it
08:38so yeah I would keep I always tell
08:41people to keep their emergency funds
08:43separate from their other savings now in
08:45your other savings you're saving for a
08:47car but if you also were saving up for
08:49spring break or you're saving up for the
08:52purchase of something else you'd want to
08:55just keep yourself a little ledger as to
08:57what that money in the savings is in
08:59other words if I got $5,000 in there
09:01towards my car and and I've got $300
09:04saved towards summer vacation then we
09:07need to keep it broken down like that so
09:08you don't spend your summer vacation
09:10money on the car or your car money on
09:12the summer vacation so just kind of keep
09:14yourself a little ledger with it broken
09:16down but definitely keep the emergency
09:18fund as a completely separate account
09:20good question Riley thanks for calling
09:22in
09:23you've got to make it a priority let's
09:25kind of talk about this way how many of
09:27you in here have children raise your
09:28hand once I get your hand up keep it up
09:30now if you have children how and how
09:31many of you keep your hand up if you
09:33don't have children how many of you hope
09:34to someday or there's a child anywhere
09:36on the planet you kind of like okay now
09:39that's just about everybody right so
09:41stay with me here now you can put your
09:42hands down but let's pretend for a
09:44second that a disease had broken out
09:46that would be awful and there was a
09:48vaccine that was needed to save the life
09:50of your child and that vaccine was gonna
09:53cost $5,000 cash and you had to save
09:58$5,000 cash by the end of the year you
10:01had to save $5,000 cash by six or eight
10:05months from now and you couldn't go get
10:07it you had to get a change your
10:09behaviors and save money if it meant the
10:12life of your child how many of us could
10:13find and save $5,000 one ladies like
10:17which kid but we could do it all that
10:21means is this now obviously that we
10:24didn't give you a raise we didn't give
10:25you a budgeting technique we didn't give
10:27you some magic pill to make you rich you
10:29changed your priorities in that horrible
10:32macabre example you'd looked at it you
10:35said if I had to I could do it if it
10:39became important enough to me I could do
10:43it you would reprioritize your life let
10:46me tell you what that's when people
10:48start saving money when it becomes
10:50important and it's important saving
10:54money as a way of life is an exercise of
10:58character it's an exercise of emotion
11:02it's absolutely vital
11:14saving money is about emotion and it's
11:17about contentment when we use that
11:19example of the vaccine with a child your
11:21emotion gets you and you say okay I
11:24could do this it's also about
11:26contentment it's about you know I don't
11:28have to impress you I don't have to buy
11:30something to feel good about myself it's
11:33okay to get me some stuff but I'm just
11:35gonna be okay where I am because it's
11:38more important for me to be able to have
11:40some savings to go to college send my
11:42kids to college to retire with dignity
11:44to change my family tree to have some
11:46stability for the first time ever in our
11:48household that's more important than
11:49buying that thingy and I'm not against
11:52thingies but there's a process here that
11:54you've got to engage in it has to become
11:56very very important and our parents
11:59never talked about savings much but for
12:01that matter a lot of households parents
12:02then talk about money did they our
12:04parents to talk about money they didn't
12:05talk about sex we figured they hadn't
12:07either turns out they had both and so we
12:12got to talk about this out loud because
12:13a savings matters you know according to
12:15the Employee Benefit Research Institute
12:1758% of American workers have never even
12:20calculated what it'll take for them to
12:21retire with dignity and 59% said they
12:25hope to have a standard of living equal
12:27or better to their working years now
12:29listen this 58% of never run a
12:31calculator look at it but 59% have hope
12:33of being better what kind of stupidity
12:36is that that's total disconnect in the
12:39way we're looking at money and the way
12:40we're handling money doesn't work well
12:43if I save money and I do the stuff you
12:44teach I'm going to become rich and evil
12:46and if I have money I'll be an evil rich
12:48person yeah
12:54there's a planet but haven't we gotten
12:58this disconnect going there seriously
13:00where we think that everybody that's got
13:01money is evil or something sometimes we
13:02watch too much TV I think you know the
13:04truth about money is is that money is
13:06amoral that means it doesn't have morals
13:09it's not good and it's not bad it
13:12doesn't make decisions it functions
13:13based on what you or I do with it when
13:15we touch it we put it in the hands of a
13:17human is when we see it change now it's
13:20kind of this brick this brick is a moral
13:22I can take this brick and throw it
13:23through a plate-glass window or I can
13:25take this brick and build a hospital or
13:27a home for unwed mothers I can take this
13:30brick and build a clinic in a
13:32neighborhood that doesn't have one the
13:33brick doesn't care it's just a brick but
13:36when you put it in the hands of a human
13:37it starts taking on life and then we say
13:40oh that guy's got a bunch of bricks he
13:42must be evil
13:45or that one has no bricks he must be
13:47good and we start making these judgments
13:49it's just a brick let me tell you let me
13:52tell you I have met rich people who are
13:55total greedy jerks have you say yes I
13:58have met poor people that are total
14:02greedy jerks have you I've met poor
14:06people there's some of the most godly
14:07people on the planet haven't you I've
14:10met some rich people that are absolutely
14:12incredible human beings and do all kinds
14:14of cool things for their wealth and are
14:17some of the most godly people on the
14:18planet haven't you you see it's not the
14:21money is it if you're a jerk and you've
14:23got bricks or you're a jerk and you
14:25haven't got bricks you're still a jerk
14:28money is amoral you're not bad because
14:32you've got some you're not good because
14:33you're don't it doesn't work that way
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FAQs about This YouTube Video

1. Why is having financial goals and a budget important for achieving financial success?

Having financial goals and a budget is important for achieving financial success because it provides a clear roadmap for managing money, saving, and investing. It helps individuals prioritize their spending, avoid debt, and focus on long-term financial security.

2. What are the five foundations emphasized for financial success in the video?

The five foundations emphasized for financial success in the video are saving, getting out of debt, paying cash for major purchases, building wealth, and giving. These foundations serve as pillars for establishing a strong financial base and achieving overall financial stability.

3. Why is it significant to have an emergency fund, according to the video?

According to the video, it is significant to have an emergency fund to handle unexpected expenses and financial hardships. An emergency fund acts as a safety net, providing peace of mind and financial security during challenging times.

4. What are the common misconceptions about money addressed in the video?

The video addresses common misconceptions about money, such as the belief that debt is a normal part of life, or that investing is only for the wealthy. It emphasizes the importance of dispelling these misconceptions to make informed financial decisions.

5. How does the video emphasize personal responsibility in managing finances?

The video emphasizes personal responsibility in managing finances by highlighting the need to change priorities, avoid impulsive spending, and take ownership of financial decisions. It underscores the role of individual accountability in achieving financial stability.

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