Watch CBSN Live

Financial Security: Attitude Matters

You may be your own worst enemy when it comes to achieving financial security. Much of it may be in your head, according to money maven and radio host Dave Ramsey.

After years of working with people in debt, Ramsey says it's become clear it isn't a simple lack of money that keeps people from achieving what he calls "financial peace." Instead, it's their attitude about money.

Ramsey has identified three common attitudes that act as barriers to financial peace: denial, keeping up with the Joneses, and ignorance.

Ramsey spoke about it on The Early Show Tuesday.

"Financial peace isn't the acquisition of stuff," Ramsey explained. "It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this."

Financial peace, he continued, is going to be different for everyone. For some people, achieving it will mean living like a millionaire. For others, it will simply mean being able to pay all the bills and put a little away for retirement each month.

So, Ramsey says, while financial peace sounds like a good thing, many of us are in debt as a result of our attitudes and approaches to money.


You can't fix a problem you won't admit you have, Ramsey says. You have to be willing to admit that your behavior is a problem before you can begin to alter that behavior, just as a chronic overeater or an alcoholic has to.

You know you're in denial if:

  • Your spouse is unaware of debts: This one is pretty clear cut, Ramsey says. If you discover a leaky sink in the house, or that your underage son is drinking at a party, you're going to tell your spouse immediately, so you can figure out a solution together. If you haven't told your spouse about debt, you're either scared of the consequences or don't think it's enough of a problem to address. Either way, your family can't achieve financial peace until you spill the beans.
  • Your desk drawer growls: Specifically, we're talking about the drawer where you stuff all your unopened bills. According to Ramsey, a desk drawer growls when it hasn't been opened in a long time. Not totaling the various amounts you owe creditors is the clearest sign that you're in denial about your financial situation.
  • You defend your stupid behavior: When you begin justifying your overspending, you know you're in trouble. Ramsey likes to say defending your mess is like a baby sitting in a dirty diaper. It may not be comfortable, "but it's warm, and it's mine." In other words, the familiar situation seems better than the alternative.KEEPING UP WITH THE JONESES

    Everybody is familiar with this phrase, but not everybody realizes they might actually be competing to keep up. Remember, this attitude can manifest itself in different ways: You may drive a car from 1990 and still be wearing shoes from the same year, but if your kids are wearing $200 jeans, you're keeping up with the Jones families of the world.

    You know you're keeping up with the Joneses if you're:

  • Buying stuff you don't need: "When you're spending money you don't have to buy things you don't need to impress people you don't like, you're keeping up with the Jones'," Ramsey said.
  • Still paying off last year's summer trip: It's time to plan your next family vacation, but you're still paying off the one you took last summer: Clearly, you're spending money you don't have. The same holds true for holidays: If it's time to buy gifts again and you're still paying off purchases from last season, you have a problem.
  • Three cars and a boat sit by your trailer: This may not sound politically correct, but it's a favorite phrase of Ramsey's, and it does paint a vivid picture.


    Let's be clear: This barrier is not from a lack of intelligence, but from a lack of know-how. "I'm smart, but I don't know how to perform brain surgery," Ramsey said. Plenty of people out there don't have the financial education they need to make smart financial decisions. The key is figuring out that you're ignorant, then getting help.

    You're ignorant about financial matters if:

  • 401(K) = Eenie, Meenie, Minie, Moe: If you blindly choose your 401(k) investment options, you're not alone, but that doesn't make it OK. This is your retirement money. You need to have a basic understanding of where it's going and how it's working for you.
  • Had a V-8 at Tax Time: You sit down to do your taxes and realize you actually made quite a bit of money and you think, "Gosh, I could have had a V-8! (As in a new car!)" Tax time is often an "ah-ha" moment for people. They realize they're burning through cash, but have no idea where it's going. Clearly, if this is you, it means you have no written budget, a sure sign of financial ignorance.
  • Don't know your credit card interest rate: Again, this is pretty clear cut. How high or low your interest rate is affects your monthly cash flow, and if you carry a balance, it can make a $100 item much more expensive in the long run.
  • View CBS News In
    CBS News App Open
    Chrome Safari Continue
    Be the first to know
    Get browser notifications for breaking news, live events, and exclusive reporting.