Dave Ramsey Reveals The 4 Things He Keeps In His Wallet

Dave Ramsey's approach to money management is largely built on a string of personal setbacks experienced early in his career. The longtime financial pundit built much of his wealth through real estate investing, and with that came an overreliance on lending products to scale his portfolio at a rapid pace. Eventually, Ramsey's complex financial situation came to a screeching halt, and he declared bankruptcy (a process that can help people get a fresh financial start but is often misunderstood) as he worked through an exit strategy from that debt and complexity. He's outspoken about this part of his life, and that experience has led to a much sleeker financial existence in the present day. This can be seen in the simplified wallet he carries around in his pocket. In addition to cash, Ramsey carries just four essentials in his wallet: two debit cards (one personal and one for his business account), his driver's license, and a firearm permit.

The minimalist setup makes it easier for Ramsey to decide how to pay for something, but it also lacks an item that's common in many other wallets. According to Experian, Americans average 3.7 credit cards that are regularly used. Ramsey carries none because he believes it's easy to get burned by relying too heavily on borrowed money. In fact, one of the central goals of his financial 'Baby Steps' program is eliminating debt to build a stronger financial foundation.

Dave Ramsey avoids credit cards because he believes even responsible use can lead to overspending (via Ramsey Solutions). It's far too easy to dig yourself into debt with borrowed money and then have to limit other parts of your life while paying it back. Similarly, once a balance has been established, lenders are eager to let you pay back a small monthly amount rather than the full debt. Paying only the tiny monthly payment obligation can balloon your total repayment figure by orders of magnitude over a short space of time.

While some of Dave Ramsey's financial advice has drawn criticism over the years, he often says that "the borrower is slave to the lender" (via Dave Ramsey). Fortunately, you don't have to be debt free to take credit cards out of circulation in your wallet. Cutting up a card creates a physical barrier that may help reduce the temptation to use it. Setting credit cards aside, as Ramsey recommends, can encourage some people to live more closely within their means. If you don't have the cash to pay for something, you don't buy it. Therefore, paying down credit balances won't be offset by new spending and you'll steadily make progress toward firmer financial footing while building stronger budgeting habits all at once.