Dave Ramsey Says This Is Your No. 1 Wealth-Building Tool: Here's How To Use It
Financial expert Dave Ramsey was recently a guest on his daughter Rachel Cruze’s YouTube channel to talk about the things every person should do differently with their finances this year.
Cruze, a financial expert in her own right, asked Ramsey what people should change about their money habits to build wealth and take better control of their finances. Here’s what he said — and how you can apply it to your own money strategy.
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Find Out: Start Growing Your Net Worth With Smarter Tracking
What Did Ramsey Say Was the No. 1 Wealth-Building Tool?
Within the first minute of the video, Cruze talked about how getting out of debt should be a financial goal for 2026 if it’s not already. Ramsey responded, saying, “Your number one wealth-building tool is your income ... It’s crazy how much of our strength — our mathematical strength — we willingly give away by signing up for a car payment, Mastercard for a vacation, on and on.”
How Does Cruze Recommend Paying Off Debt?
To wield the strength of your income, Ramsey referred to, he said, it’s crucial to pay off debt. Cruze recommended that a good place to start is to pay off your smallest debt first, citing her father as the person who came up with this strategy 30 years ago.
Cruze said this strategy is more efficient than trying to tackle debt by the highest interest rate. Ramsey agreed, saying paying off the smallest debt first helps establish good financial behavior that can be applied to larger debts as needed.
“Paying off some debt gives you some hope, gives you some confidence,” Ramsey said. “It’s like going to the gym. You lose two pounds [in] the first week. You’re like, ‘Hey, I might actually do this!’”
What Is the Importance of a Budget?
If you don’t already have a budget, you can’t have full control of your income because you don’t know where it’s going.
Cruze said, “Being able to know exactly where every single dollar is going of your income — it gives you power. It gives you control. And it allows you to make changes. If you want to get out of debt, if you want to do something differently, you actually know where you’re starting.”
The best step you can take to start managing your top wealth-building tool is to track your money through a budget.
Where Should You Invest Your Money?
Once you’ve tracked your income and paid off debt, it’s time to start investing. Ramsey recommended at that you put your money in mutual funds, a Roth IRA and a 401(k) plan if it’s offered to you. This will help your wealth grow with relatively little effort on your part.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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