Why Should I Drain My Savings To Pay Off Debt? | Sorry We Missed Your Call

Summary

Podcast Summary: The Ramsey Show Highlights Episode: Why Should I Drain My Savings To Pay Off Debt? | Sorry We Missed Your Call
Release Date: May 1, 2025
Host: Ramsey Network
Duration: Approximately 7 minutes and 36 seconds

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Introduction

In this episode of The Ramsey Show Highlights, host Dave Ramsey and co-host Rachel Cruze delve into listener voicemails addressing common financial dilemmas. The primary focus revolves around the delicate balance between maintaining savings and aggressively paying down debt, as well as the proper application of tithing within Christian financial practices.

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Listener Voicemail #1: Balancing Savings and Debt

Timestamp: [00:38] – [02:31]

Listener: Jared
Query: Jared expresses his confusion over whether to retain his $16,000 in savings while simultaneously managing debt. Despite understanding that the debt accrues more interest than his savings, he feels a sense of security maintaining his savings.

Key Points Discussed:

1. Illusion of Security:

   • Dave Ramsey explains, "It does feel better to have the 16,000 and have the debt because you have the illusion of security... over a 20-year period of time you're not safe because you're broke and in debt." [01:20]
   • The sense of immediate security from savings masks the long-term instability caused by ongoing debt.

2. Emotional vs. Logical Decisions:

   • As Dave puts it, "You have the illusion that you're safe... But what you also don't realize is that because you're carrying all this debt, you're not safe." [01:20]
   • Rachel Cruze adds, "Being free from all of that by being out of debt and then building back the emergency fund actually gives you a level of deeper security." [02:31]

3. Ramsey’s Baby Steps Advice:

   • Dave outlines the Baby Steps, emphasizing paying down debt to $1,000 before focusing on building an emergency fund: "Baby step one is $1,000. Anything above that, that's not retirement goes at your debts." [01:58]

Notable Quotes:

• "You have the illusion that you're safe and it's an illusion because over a 20-year period of time you're not safe because you're broke and in debt." — Dave Ramsey [01:20]
• "Being free from all of that by being out of debt and then building back the emergency fund actually gives you a level of deeper security." — Rachel Cruze [02:31]

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Listener Voicemail #2: The Purpose and Allocation of Tithing

Timestamp: [03:59] – [07:36]

Listener: James
Query: James seeks clarity on whether tithing should be exclusively directed to the local church, especially if his church is experiencing a decline. He inquires if it's acceptable to allocate his tithe to other Christian organizations, such as pro-life groups.

Key Points Discussed:

1. Biblical Basis for Tithing:

   • Dave explains the traditional evangelical perspective, stating, "The tithe goes to the local church, a tenth of your income... it's a baseline instruction from your heavenly father that teaches us to give to our faith community." [04:30]
   • Emphasizes that tithes support the church's operational needs, including paying ministers and maintaining facilities.

2. Distinction Between Tithes and Offerings:

   • According to Dave, "Anything other than that tenth is an offering and it can go anywhere." [04:30]
   • This delineation allows flexibility for donors to direct additional funds beyond the required tithe.

3. Trust and Church Stability:

   • Dave raises concerns about directing tithes to declining churches: "If you're uncomfortable trusting the spiritual welfare of my family more. I'm more worried about that if you're more than." [06:12]
   • Rachel adds her perspective on the importance of giving to a stable church that can effectively utilize donations: "Churches that do well don't have a shortage of givers." [07:14]

4. Debate on Church Decline and Giving:

   • A brief exchange between Dave and Rachel highlights differing views on whether declining churches should continue to receive tithe contributions.

Notable Quotes:

• "The tithe is not a salvation issue. You're not going to... God doesn't love tithers more than non tithers." — Dave Ramsey [04:30]
• "Churches that do well don't have a shortage of givers." — Dave Ramsey [07:14]

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Insights and Conclusions

1. Prioritizing Debt Over Savings:

   • The episode underscores the importance of eliminating debt to achieve long-term financial security. The psychological comfort of having savings is outweighed by the security that comes from being debt-free.

2. Clear Distinction in Giving:

   • Understanding the difference between tithes and offerings allows individuals to fulfill their obligations to their faith communities while also supporting other charitable causes.

3. Church Stability as a Factor in Giving:

   • Donors are encouraged to assess the financial health of their church before directing tithes, ensuring that their contributions support a sustainable and effective faith community.

4. Emotional vs. Logical Financial Decisions:

   • The discussion highlights the need to balance emotional feelings of security with logical financial planning to avoid long-term instability.

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Final Thoughts

This episode of The Ramsey Show Highlights provides valuable guidance on navigating financial decisions that balance immediate emotional comfort with long-term stability. By addressing real-life listener concerns, Dave Ramsey and Rachel Cruze offer actionable advice grounded in biblical principles and proven financial strategies. Whether grappling with debt management or the nuances of tithing, listeners gain clarity on making informed choices that align with both their financial goals and personal values.

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Note: The transcript provided covers the initial portion of the episode. For a comprehensive understanding, listening to the full episode is recommended.

Transcript

[Rachel]

Brought to you by chm, a biblically based alternative to health insurance. Learn [e-mail] budget we're going to try.

[Dave]

Something new that we've not done well anytime in the recent memory. We may never have done it before. It's possible. So you guys call.

[Rachel]

I don't know if you've done it well.

[Dave]

It's possible. I've done a lot of things.

[Rachel]

Personalities. Have you did it? This is your first?

[Dave]

Yes, I've not done it.

[Rachel]

Welcome to the, welcome to the segment, Dave.

[Dave]

Oh, okay. So this is something that's happened while I wasn't working. Okay. So anyway, people call and leave voicemails and so let's play one of them.

[Jared]

My name is Jared. I have been looking into the baby steps and I know one of the things is to sell everything quickly as you can get yourself out of debt, which I do totally understand. I have about 16,000 saved up and I also do have debt. And I was wondering why does it feel better to have that safety net of the 16 than pay off the amount of debt? Even though I totally understand numbers wise that the debt is costing me more than the savings is keeping me in savings. Thank you. Appreciate your time.

[Dave]

Yeah, that's a good question. It does feel better to have the 16,000 and have the debt because you have the illusion of security. You have the illusion that you're safe and it's an illusion because over a 20 year period of time you're not safe because you're broke and in debt. But you've got this sense that in the moment, if something happened because it's true, if you had a $5,000 car engine blow up and you've only got $1,000, you're not safe. But what you also don't realize is that because you're carrying all this debt, you're not safe.

[Rachel]

That's right. Yeah.

[Dave]

But your emotions, because you're a saver, Jared, tell you that as a saver I'm safer if I have savings. But if you were looking at it the other way and said, oh, the debt scares me more than the illusion of the savings, then you're going to pay it off. Until then you're going to sit there in that. So yeah, we always teach to just pay down to $1,000 and start your baby steps. Baby step one is $1,000. Anything above that, that's not retirement goes at your debts. And baby step two, listing them smallest, largest and attacking them in that order.

[Rachel]

Yeah. And what's interesting is usually with especially savers So I get this Jared, on this end that again, you don't feel the risk of the debt, but if something were to happen, there's other people coming to knock on your door and that doesn't feel safe either, right? So like if you're not able to pay these things, it's scarier to have your, you know, your financial peace, if you will, in other people's hands and in other people's situations. And so being free from all of that by being out of debt and then building back the emergency fund actually gives you a level of deeper security. But I don't think people think about that as much that, you know, the.

[Dave]

Difference is you haven't experienced the risk. So like with me, it's a no brainer because I have been foreclosed on, I have been sued, I have had people take money out of my account that sued me and won before we went broke, before we filed bankruptcy, when in the process of two and a half years of fighting that we were foreclosed on multiple times, we were scared several times that they were going to repo our car that night, walk out in the driveway and it's anybody's guess if it's going to be there. Then you start to go, oh, wait a minute, I don't feel safe forever for the rest of my life. I don't feel safe with that. And so that's what I mean by it's an illusion. I've got that benefit of that experience because whatever sense I had that that was okay was completely stripped away by the extreme experience we went through. Okay, play the next one.

[James]

James, we had a question about tithing. Is tithing specifically supposed to be used for the church or if we are in a church that is currently declining, is it okay for our tithe to be donated to Christian organizations such as a pro life organization or something of that sort? I just wanted to kind of find out what you believe is a biblically sound answer to that question. Thank you.

[Dave]

Good question. Well, I studied the Bible through the lens of an evangelical Christian, which means someone who believes the Bible on instructional things like this. Literally. Evangelicals for the last 500 years have taught and backed it up biblically that the tithe goes to the local church, a tenth of your income. Tithe, the word in Hebrew means tenth. Doesn't mean 5%. If you want to give 5%, that's fine. The tithe is not a salvation issue. You're not going to. God doesn't love tithers more than non tithers. Tithers don't automatically get into heaven. That's not what this is. It's a baseline instruction from your heavenly father that teaches us to give to our faith community title 10% of our income first. And the model is the Old Testament storehouse. And the Old Testament storehouse took care of the widows and the orphans and the Levites. The Levites were the pastors. And so the preachers get paid well, not overly paid. The minister of music, the children's minister gets paid well, but not overly paid. They never get overly paid. And the bills get paid. And we keep the lights on in the house of worship with the first tenth of our income. Anything other than that tenth is an offering and it can go anywhere. So it's tithes and offerings. Then I would just say that if you're uncomfortable giving your money to the church because it's in decline, I'm uncomfortable trusting the spiritual welfare of my family more. I'm more worried about that if you're more than.

[Rachel]

Yeah, but if it's just a sweet church that there's not a lot of givers and they're like, well, we're not going to be able to keep it open. But they're. But they're great Bible teachers. Do you know what I mean? Like, there is. I don't know, there's a part of me that I'm like, what if it is a great church? And they're just.

[Dave]

It's not in decline.

[Rachel]

But what if the. All the people who. And we don't know where Seth lives. Right.

[Dave]

I do not. I do not know the church, but.

[Rachel]

And they. So all that to say we've worked.

[Dave]

With 50,000 churches in America. We love churches. We love pastors. That's not the question. It could be, but the question. Usually if there's a decline, you say your church is too much in decline to give to. I worry that it's too much in decline to trust your spiritual health of your family, too. That would bother me. That's the answer. I mean, I. If I can't trust them with my money, I don't need to trust them with my family.

[Rachel]

No. So it's not a. It's not that they're doing anything immoral, but.

[Dave]

I wasn't talking about immoral.

[Rachel]

But you say I can't trust them with my money.

[Dave]

I'm just saying they're not doing well.

[Rachel]

Because maybe they don't have a lot of givers. I don't know. I always hate making that statement.

[Dave]

Listen, churches, churches. Here's the thing. Churches that do well don't have a shortage of givers.

[Rachel]

Oh, that's a strong statement.

[Dave]

No, they don't. It's an accurate.

[Rachel]

I don't know. I'm not. I'm not.

[Dave]

Okay, we'll argue about it. That's fine.

[Rachel]

I don't know. I don't know.

[Dave]

You'll be wrong.

[Rachel]

I think you. And then I'll find the stat and bring it on next time. This is the fatherless.

[Dave]

Good luck with that. Good luck with that.

[Rachel]

CHM isn't health insurance. It's a health cost sharing ministry. Check it out for [e-mail] budget.