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My thoughts about Dave Ramsey.

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Regular Contributor

Re: My thoughts about Dave Ramsey.

One of the things that is the most bizarre to me is a 42-year-old single mother (2 middle/junior high kids) who makes $60K/year. She has no retirement or emergency savings, she never has the funds to pay her children's school fees, her credit cards are maxed out and she barely has gas money to get back to an from work - but she buys her son $200 basketball shoes, her daughter a $600 prom dress to go the Junior prom with her girlfriend, and always has hair highlights done for her self. She lives well beyond her means. And for Dave Ramsay, that $5 million dollar house, for which he paid cash, is well within his means. It is all relative. Years ago, I lived beyond my means...do you realize the constant, everyday stress that this brings about? Today, I find great joy from living within my means. I can sleep at night. I think that Dave Ramsey is doing a great service for those who need to be JOLTED back into a healthy financial life. He has helped a lot of people. But his stance on credit cards is, at least for me, over the top. You can't even rent a motel/hotel without a credit card, unless you go to one of those "pay by the week" places. No way can you rent an automobile without a credit card. I happened to turn on Dave Ramsey the other day - and I immediately turned him off - he was RANTING. Sometimes there are people who speak so loudly that I can't hear a word that they say...

Message 31 of 74
Regular Contributor

Re: My thoughts about Dave Ramsey.

Absolutely "iced"! Living within your means includes mandatory savings, on a regular basis - no matter how small the amount!

Message 32 of 74
Contributor

Re: My thoughts about Dave Ramsey.

He also teaches people to "snowball debt" paying the smallest to lowest balance off.

Problem with that theory, is while it might make people "feel good", paying a $1100 tradeline at 30% APR would be better than paying a $1000 tradeline with an APR of 10% (personal loan) first. People should snowball by the interest rate.

 

 

Credit Card companies have a name for those who pay their bill in full each month: Deadbeats
Message 33 of 74
Moderator Emeritus

Re: My thoughts about Dave Ramsey.

Mathematically you are correct but look at the number of people who pontificate snowballing debt based on smallest balance even on this exact board.

Out of all of the silly things Dave Ramsay pontificates this is one of the least offensive.

Ultimately if snowball is what you need to keep score when it comes to paying off debt, that is better than falling off that bus.



        
Message 34 of 74
Frequent Contributor

Re: My thoughts about Dave Ramsey.

I have not exhaustively read each post in this thread but I too am not fond of Dave Ramsey.
Auto loan interest rates are still very low.
Borrowing responsibly to buy reliable transportation is in my opinion a better choice than buying a beater for cash.
Unsecured credit at 20% may crush you but BT it to Navy Federal and agressively pay on it before promo rate expires.
If you travel at Hiltons, Amex Aspire can be a great deal.
If you travel on a particular airline frequently, an airline cobranded card can be a money saver.
I think getting a portfolio loan mortgage is harder than Ramsey makes it sound.
Message 35 of 74
Contributor

Re: My thoughts about Dave Ramsey.


@CGeorge wrote:

One of the things that is the most bizarre to me is a 42-year-old single mother (2 middle/junior high kids) who makes $60K/year. She has no retirement or emergency savings, she never has the funds to pay her children's school fees, her credit cards are maxed out and she barely has gas money to get back to an from work - but she buys her son $200 basketball shoes, her daughter a $600 prom dress to go the Junior prom with her girlfriend, and always has hair highlights done for her self. She lives well beyond her means. And for Dave Ramsay, that $5 million dollar house, for which he paid cash, is well within his means. It is all relative. Years ago, I lived beyond my means...do you realize the constant, everyday stress that this brings about? Today, I find great joy from living within my means. I can sleep at night. I think that Dave Ramsey is doing a great service for those who need to be JOLTED back into a healthy financial life. He has helped a lot of people. But his stance on credit cards is, at least for me, over the top. You can't even rent a motel/hotel without a credit card, unless you go to one of those "pay by the week" places. No way can you rent an automobile without a credit card. I happened to turn on Dave Ramsey the other day - and I immediately turned him off - he was RANTING. Sometimes there are people who speak so loudly that I can't hear a word that they say...


Dave actually has an entire youtube subcategory dedicated to his rants on his channel.

 

I sort of blame consumerism on why there is so much failure when it comes to finances. Advertising is constantly being shoved in our faces. Buy this, buy that. There is a whole segment of psychology dedicated to manipulating people into buying things, often things they don't need.

You can buy just about anything you want without the means to do so. Even if your credit is terrible, rent a center will happily rent to you a washer and dryer, which you will end up spending north of $3,600 on, when you can buy the same set from home depot for $1400.

It is obvious our government needs to step in and get rid of the people that prey on the poor or the poor credit. A lot has been done, but a lot still need to be done. Pawn shops and payday loan companies still charge 200 to even 500 percent interest.

Financial planning was never taught to me in school, outside of the most basic of things, like reconciling a checkbook. Credit cards, student loans, etc were never taught. I graduated 8 years ago.

We are also transitioning to a "throw away" society. We waste so much it's not funny. My dad used to repair lawnmowers, and he saw so many in the trash, that literally needed about $15 in parts to run like new. People will then go out and spend $200-$300 on one.

TV's don't really get repaired anymore. Ever try to get one fixed? It almost always costs as much as the TV itself to have done. So in the trash it goes and another $400 spent on an new one.

Like I said earlier, I am happy the goverment has cracked down on some things. You don't see credit card companies handing out credit cards like candy on college campus. I still wish they would stop forcing employees of some stores (looking at YOU Best Buy) to stop asking you every time you purchase something if you would like one.

Credit Card companies have a name for those who pay their bill in full each month: Deadbeats
Message 36 of 74
Valued Contributor

Re: My thoughts about Dave Ramsey.

Personally, I think every high school/college student should take some sort of college offered/mandatory course that teaches about finances. Not your macro/micro stuff. Like proper day-to-day finances and how to properly manage them. The mindset of the "throw away" and buy even if you don't need it - needs to get reformed. I won't sit here and say I'm not guilty of being a consumer at times too. But there's always a limit. I purchase just like anyone else but most of the time, it's out of necessity. With the way society is currently, when do you not see some brand being shoved down your throat? The constant fashion and products being advertised. It's never ending. It's become a constant one-up each other. The up-and-coming generation would really learn from the mistakes of prior generations and the current gen. If schools taught how to be financial sound and be smart with your money - if even one person followed, that to me is a success.


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Message 37 of 74
Regular Contributor

Re: My thoughts about Dave Ramsey.

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. 

Message 38 of 74
Senior Contributor

Re: My thoughts about Dave Ramsey.


@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. 


When I was 18 my mother "made" me get a credit card. Visa. She took me to the bank to apply.  I was an AU on several of her gas cards. 

Message 39 of 74
Contributor

Re: My thoughts about Dave Ramsey.


@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. 


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. 

Credit Card companies have a name for those who pay their bill in full each month: Deadbeats
Message 40 of 74
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