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Personal finance expert Dave Ramsey says you should completely get rid of credit cards and encourage your family to avoid using them if you want to get out of debt and build long-term wealth.
Discussing the importance of sticking to the basics on “The Ramsey Show,” he said the shortest path to building wealth is to avoid debt and get into the habit of paying with cash or a debit card. Ramsey said fixing financial problems comes down to common sense, but requires major sacrifices.
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“Get those credit cards out, light some candles and have a plasectomy ceremony,” he said. “Let the children help you cut them up so the children won’t ask to use them because they know they’re gone, let them experience the death of plastic in your house.”
Ramsey said getting out of debt and building wealth means giving up a “normal” lifestyle, working more, selling what you don’t need, and cutting unnecessary spending. He said you should be prepared to face criticism and even be made fun of for this “newfound” way of life.
“If your broke friends are making fun of your financial plan, you are right on track, sweetheart,” he said. “If you find out that some of your Facebook friends aren’t real friends, then you’re right on track because they weren’t. And not everybody that likes something on social media really likes it.”
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Ramsey said small financial habit changes like using debit instead of credit and saving consistently can lead to a retirement with “dignity.” He said that while many see the wealthy as “evil,” they often feed hungry children and give billions to charity.