My thoughts about Dave Ramsey.

[arizonahd]

I have never been a fan of DR. Before I knew about his ‘cult’, I bought one of his audio books thinking it would be a good source of sound financial advice since it had raving reviews. I quickly learned from his book that he was one of those “self help” guys that focus more on behavior than nuts and bolts economics. Basically like AA but for finance. I know it works for some folks, and I have nothing against DR, I just feel like it's same line of BS you see from people like Joel Osteen. His advice becomes a cult, then his cult flocks to all his products and "trusted vendors". Nothing new.

I have to say though, I get a kick out of it! People saying it's smarter to pay off a 3k balance with 12% APR before a 5k balance at 30%! Kind of reminds me of the whole science vs religion debate, which is obviously not allowed here (cool by me). But you know exactly what I mean! And I don't trust anyone that tells me that my 3k in CC rewards I earn every year is a "bad idea". 

[Anonymous]

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So, 4160 or so in actual revolving minimum payments. Most of our cards were from the height of the recession and had interest rates in the high 20's and low 30's. We no longer had the ability to balance transfer around. It was around $75,000 in credit card debt with a substantial chunk of it at the punitive rates from 2008-2009.End quote:

I disagree with David Ramsey’s premise that credit is evil, but as a country we need to learn that we may not to be able to balance transfer indefinitely.

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[Anonymous]

I think we often forget who Dave Ramsey's audience is. The average American has thousands of dollars worth of debt and it seems that we're teaching people that’s perfectly fine and normal. You'll never get ahead thinking like that. For the average person, I think Ramsey offers excellent advice. 

I grew up with multi-millionaire parents who are exactly as Dave Ramsey describes “the millionaire next door” to be.  They use credit cards but have no other consumer debt, everything is paid off, and they live so far below their means it’s staggering. I truly believe that the mindset Ramsey tries to ingrain in his audience is more important than any technical financial advice he could offer.

[Cleaningitup2016]

Come to think of it, the amount some spend on tobacco products each month is 200 dollars or more, and yet the have no money.

[xaximus]

It's hard to know how much money people spend per month without knowing their finances. What may seem wasteful or unncessary to us, may be necessary to someone else. 

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@Cleaningitup2016 wrote:

Come to think of it, the amount some spend on tobacco products each month is 200 dollars or more, and yet the have no money.

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In your example - someone spending 200 a month on tobacco products - that may seem wasteful to you and I, but to that person, it may be an addiction. My parents have always said to me and it's one of the best pieces of advice ever. Never go over or under, always try to stay level in whatever you do. Do everything you can, but do it with in a limit. I think that's the situation with debt and consumers today. Many don't know how to keep it level and minimal and it snowballs. Plus, CCs can be an evil since it's a peice of plastic, not something physical in your hands. IMHO - if those people didn't know how to manage CCs, they should stick with cash or lower limit cards until they learn to manage that, and that should be part of education (high school/college - should be mandatory!). Learning how to manage your finances and understanding credit and it's impact, learning to budget, etc. should be a life course that everybody should take.

[iced]

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Being addicted to a wasteful and unnecessary item doesn't make it not wasteful or unnecessary. Tons of Americans are addicted to television, but that doesn't mean paying hundreds per month on Netflix/Hulu/Amazon/etc subscriptions suddenly isn't wasteful or unnecessary. Alcohol, soft drinks, TV, gym memberships, dining out, triple-shot mochalatteccino with organic soy-free 2% free-trade almond milk (or any coffee), and even a car in some areas...all unnecessary.

These things (and many others of a similar nature) are discretionary spending, period. If someone has the budget to afford these things without going into debt or neglecting essential needs and savings, then buy them to their heart's content. It's when people have to deplete savings and/or go into debt to obtain these types of things that they have ceased living within their means. No excuses.

Removing conveniences to obtain discretionary items, such as credit cards, may trouble someone just enough to stop getting them with the same frequency they might have otherwise, but that's a (usually temporary) workaround at best. That is to say, the problem isn't credit cards or lack of financial education to manage debt and credit, it's that person's inability/unwillingness to delay/deny gratification. They see something they want, they realize they can trade something (cash/credit) in their possession for it, and then do so without stopping to think of the consequences for making that trade.

This is the same reason so many fail at dieting. The premise of taking in fewer calories than one burns isn't flawed, and yet so few can do it. It's not that dieting doesn't work, it's just that it involves delaying and denying gratification (food feels good, exercise feels bad) and only a few are willing to do that. Some diet fads attempt to find an easier/simpler shortcut so that it's "easy", but in reality all these are doing is trying to find a way to consume less than one burns that's the least delaying/denying of gratification ("eat what you want and lose weight!" or "lose weight without exercise!").

Dave Ramsey is trying to do something similar with financial management by distracting people from their inability to delay gratification by giving them something that sounds realistically achievable (snowball, cut up cards, etc) to focus on instead.

At the end of the day though, the failure to live within one's means or lose weight alike are solely and wholly the fault of the individual who simply could not or would not make the personal sacrifices.

[Save-n-Invest]

Godiva is my drug of choice.

[Anonymous]

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@iced wrote:

... the failure to live within one's means or lose weight alike are solely and wholly the fault of the individual who simply could not or would not make the personal sacrifices.

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Yet there is considerable evidence to the contrary. 

[Archangels]

I would like thoughts and opinions on the Dave Ramsey's financial method to live, "Debt Free". He also calls the FICO score the, "I Love Debt Score" Because you need to remain in debt to get a score etc. 

Also,  He says credit cards are a bad financial move, because if you can't pay cash for it then you should not be borrowing etc.

I tend to take from his, "not carry any debt"  but I also still maintian a FICO score, I like the idea of playing both games.

My Hybird financial philosophy is to, 1) Remain debt free by not carrying any large Credit card balances (10% or less) 2) If you can't afford it with cash don't buy it, with a few exceptions like (Home Mortgage etc.) 3) The only reason I carry a FICO score is if I need to, "borrow" but if I need to borrow that means I can't really afford it.

Anyways, thought's opinions, etc. 

[Save-n-Invest]

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@Cleaningitup2016 wrote:

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@Save-n-Invest wrote:

Does anyone learn about basic money use at home anymore? It's quite simple. You spend less than you take in. Positive cash flow.

Pay yourself first. That's a savings or investment account not more cash to burn. 

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There are people who believe a nigerian prince is going to wire them $1,000,000 if they give them a thousand bucks. It still goes on to this day and people still fall for it.

There are people who know better when it comes to money and people who are not mentally agile who get taken advantage of schemes.

There needs to be more of a stop put to it, because not only do you have mentally handicapped people who can't really help themselves, you also have a growing crowd of elderly people who might have dementia falling for things like reverse mortgages.

I don't think everyone's hand should be held, but some people need help to not do that stuff. I do auctions for a living, and you won't believe how many people's grandma or aunt spent thousands on jewelry from those TV shopping channels. 

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 Grandma or Aunti is lonely. The show host is the new best friend. Purchases are made that are not needed or useful. Some people die with a room from floor to ceiling of unopened boxes from the shopping channels.

Social isolation of the older population will never be addressed by some ranting self anointed financial guru. 

I have not seen any of Ramsey's follow up studies on people who started on his financial program and continued to thrive at various time periods after their financial crisis. I didn't search for them. The only reason I ever heard of Ramsey was his vids started to show up on the You Tube sidebar when I was viewing SNL, Scotty Kilmer etc.

Ramsey was entertainig at first. When I heard him rant and make fun of his callers I was turned off. The comment section under his vids are frequently people berating the caller. Lots of folks breaking their arms patting themselves on the back because they feel better than.

If there are any DR follow up studies I am very open to reviewing them.

Ramsey's extreme philosophy reminds me of the crash diets. When the person goes off liquid protein and on to solids the weight frequently returns with a bonus.