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What's wrong with Dave Ramsey?


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I've seen a lot of dislike for him and his debt free program on this board and on TWOP and I'm curious where it comes from. My mainstream Protestant church uses his stuff to teach some sort of "get your financial act together" class. I've never taken it, so I can't say for sure, but 99% of the people who attend this church would never swallow fundie/patriarchal crap, so I've always assumed he can't be that much of a loony toon. I get that living completely without debt is not realistic for many people, but I don't see anything wrong with it as a goal to aspire to. So if there is some sort of dark side to Dave Ramsey, please enlighten me, because from what I know, he seems rather harmless.

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He is religious, no doubt. In his books he quotes scripture, but IMO it's not overdone. I'm athiest and have used his books to get my own financial act together (I just skim over the bible stuff). I've found them to be tremendously helpful. The only thing that bugs me is his sign off on his radio show, "the only way to achieve true financial peace is through the prince of peace, Jesus Christ." I feel that I've achieved financial peace without Jesus. It's somewhat offensive to me that he assumes that only religious could achieve financial peace but I try not to read to much into it. He means well.

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I get nervous when churches start putting out financial advice that sounds like "pay off your debt and get rich so you can give more money to us!!!" It just seems self-serving to me.

That said, Dave Ramsey seems harmless enough, and if people are helped by him, that's great.

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I don't have a problem with Dave Ramsey, although I've never used his stuff.

I did got to a church once that showed a video promoting his seminar, and one of the actors said in the video "You'll learn God's plan for managing money!"

I thought to myself, no, you'll learn Dave Ramsey's plan.

Other than that though it just seems to be harmless enough.

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I think most people are just turned off by the whole religious tone to it all or by the fees for the course, books, "envelope system" etc. and the idea of "buy this to get out of debt".

Some of the hardcore frugal types don't like his "debt snowball" plan because he advises paying off the smallest debts first, rather than those with the highest interest rates. You save more money if you go with the high interest rates first, but Ramsey's thoughts are that paying off the small debt first help keep a person motivated to pay even more off.

There are some things about the whole Dave Ramsey thing I kind of roll my eyes at, namely some of his more zealous fans, but his system did help me out in the past (and probably would much more if I'd stuck to it), so I'm not going to knock it. He's helped a lot of people make some pretty big changes, so I see the other stuff as more quibbles compared to the amount of good he's done overall.

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His stuff seems interesting, and I might be willing to try it.....but......with so many fundies swearing by it, it's automatically suspect. Plus all the religious garbage.

I also got the sense from the one friend I know who's done it that he's against all educational debt, which I think is ridiculous. Yes, I could have graduated from college debt free by living at home with my parents, going to a 2 year school then transferring to a 4 year program, but being debt free wouldn't have been worth missing out on the thousands of amazing experiences I had (and life lessons I learned) from attending the 4 year private college away from home that I ended up attending. It's just money, folks. Life is for living. Buying used and saving the difference is great for clothes, but not for education.

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Dave Ramsey is a pure black and white thinker. A lot of his stuff is good, common sense advice, and extremely helpful to many people. If you listen to his show for any length of time at all, you will realize that many (not all) of his callers need to be instructed in how to tie their shoes in the morning. However, he is rigidly fanatical on the idea of no debt ever for anything except a house if you must. I agree with him that it makes no sense to take out $100K in student loans to get a BA in philosophy from a private college. But to insist that you should not borrow money under any circumstances to go to medical school is nonsensical.

I have read his books, and I listen to his show--except when he starts ranting about politics, then I turn it off--it's like anything else in the media. Take what applies to you and leave the rest.

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Another atheist here who has no real problem with Dave Ramsey. As VVV said, take what you find helpful, and leave the rest.

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I agree that he is a black & white thinker. DH and I took the class and definitely learned a few things, but the idea that all debt is always bad is very simplistic if you ask me.

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He has some helpful advice, but I agree with the poster who talked about how some of his listeners need help typing their shoes in the morning.

I did hear him take one of his callers to task, and I was glad he did. The guy called in to complain about his wife buying clothes for their young children. The guy wanted to take her off the checking account so she could not spend any money without coming to him first. Dave called him a tyrant and told him to knock it off. You could tell the guy was shocked that Dave did not agree with him.

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Most people that I've seem express dislike of him have a problem with his whole "no debt EVER for ANY reason except possibly a 15-year mortgage" philosophy (this being mainly on financial-oriented sites). It's just any unnecessarily extreme position to take, especially considering how often your credit score is used and how, if you followed his ideas to the letter, you pretty much wouldn't have one. Debt/credit is a tool and can be used to your advantage in some instances... for instance I charge all my purchases on a credit card that gives me rewards points, and then pay it off entirely at the end of the month, with the end result being that the credit card company essentially pays me to use their card. But according to Ramsey this would be unequivocally bad simply because it involves a credit card.

I can see his advice being useful for people who simply can't manage to get their heads around the concept of responsible credit use, though... kind of like recommending people prone to alcoholism to just simply never drink. I don't know if it's because he himself is this way and he thinks everyone else is also, or if he thinks owing money is morally wrong, or what. Also it seems a lot of his advice (for instance he recommends only buying a house if you can do a 15-year mortgage that's less than 25% of your pay each month) is geared towards people in low or moderate cost of living areas, which makes it totally impractical for someone like me. I'd like to own a house before I'm 70!

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I like Dave Ramsey. As with anything, take good advice and apply it. Get rid of the rest. Like Raine, if we stuck with it we'd likely be in a better financial position. That said, we'd be even worse off if we didn't use some of his principles because we're both terrible money managers.

I've never purchased his book, but I did do the free trial on the website. I gleaned enough from that for us to put our nose to the grindstone and trim some much needed budget fat. The biggest thing that was helpful for use was to set aside a set amount for our spending money. For example, there was a time where we each had an 'allowance'. I'd get $50/two weeks to spend on anything I wanted and so did DH. Since I have a latte addiction and he has a dvd buying addiction, this solved a lot of problems for us.

We have been able to pay off some big bills. Although we still have some credit card debt we are working on, we don't have car loans anymore. Likely we will have car loans again at some point, but we we have better systems in place to pay things off sooner, and to manage our debt load better.

I don't think there is anything wrong with student loan debt. Would I love *NOT* to have student loans? Of course! However, having used student loans, I was able to get a degree that allows me to make over $30/hour. I didn't take out 'the max' and used common sense with that too.

The biggest thing we got out of DR was the overall awareness of our finances, and ways to stay on top of things better.

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I'm a Dave Ramsey person myself. I listen to him on AM on the way home from work just about every day. The people who call in in horrible messes make me feel better about the amt of debt I have and the people who call in to yell "We're Debt Free" keep me motivated to keep on paying stuff down. We did a Financial Freedom small group at my church almost 2 years ago. Not the full on Financial Peace University, we just read the FF book. But I've paid off a bunch of stuff and hubby and I plan to be debt free except the house this time next year.

Dave is definitely black and white. He has a system that he sells so if you muddy it up with grey areas those people who need help tying their shoes would just get completely lost in the grey areas I think.

--The thing about paying the smallest debt first vs largest interest rate is good to keep people motivated who are buried so deep they feel like they'll never get out. Sure it will save them on interest to pay off the huge $10K credit card at 20% vs the $3K loan at 6%. But if they start with the big one and it's going to take a year or two to pay it off they might be pretty likely to lose steam, feel like they are getting nowhere and give up.

--On putting stuff on credit cards and paying it off every month...that does seem to work for some people but I think expecting everyone to be able to do that is overestimating the mental capacity of the general population. Seriously. It's so easy to think you are caught up on that system and then realize, wait a minute...I'm a month behind and in June I just paid for May's bill with my entire June paycheck so I still have a bunch left on the credit card and no money left in the bank! And since he is marketing to the lowest common denominator and making a plan that should fit anyone, chop chop goes the grey area again.

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The problem I have with Ramsey is that he really hasn't told me anything I didn't already know. Besides, if I was curtailing spending, the LAST thing I would do is plop down shekels for his color coded money folders...

Amy Daczyczyn, (oh, heck, I probably spelled it wrong) had it right back in the early 90's. Check out her books from the library for the genesis of the Ramsey seminars. (My feelng is he read those too.)

My other huge problem with what I've read on Ramsey, I think NDSL/GSL student loans are necessary, and a good way to establish credit, while increasing your earning potential. He balks at education loans. Again, read Daczyczyn...and how this relates to Duggars: I wonder what the heck SHE would think of them.

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Ramsey's great for people who are in a deep financial hole, and they have usually dabbled in credit enough for a lifetime. I've known people who turned things around with the whole debt snowball thing, and his basic ideas are sound - have an emergency fund, list your debts and start paying extra on one of them, get together a serious emergency fund, save for retirement. It's not that complex but a lot of people just need a guru to get moving on stuff - people call up Suze Ormond and Marketplace Money to get told what to do, too, even when the advice is as obvious as "you're in a hole so stop shoveling."

There's no percentage in it for churches, because he advises against charitable giving until you're out of debt (which is way contrary to the Prosperity Gospel types who think you have to tithe from your first dollar or God will never bless you.) He's not aligned with the fundies except to tap the market, really - he didn't start marketing through the fundie churches til he'd saturated the radio market.

That said, he is annoying as fuck and I hate his voice, and it peeves me that he sells stupid "Peace U" certification instead of encouraging people who need one-on-one help to go to a debt counselor or a certified fee-only financial advisor. The only advice-giver whose voice is as bad as his is Suze Ormond and at least she's only hawking books.

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I went to a Financial Peace University (FPU) seminar and I think that Dave Ramsey is perfect for people that have a decent amount of debt and need emotional support to get rid of that debt. He's also really good for helping get a husband/wife together to budget out finances so that people know where there money is going. That said, I think that others have a better view of investing. (His 15% of income is good but I disagree on how to split that up into different types of investments).

So if you're in debt and looking for support to get out of debt, Dave's your guy. If you're a serious investor looking for ways to make money I'd keep moving along.

If you're interested in his FPU classes his website has a search to find out where classes are in your area. They tend to be held at churches but I didn't find that religion was overboard in the topics. Most of the chapters in the book had a bible quote that pertained to that week's lesson and there are a few favorite Dave bible quotes ("the borrower is slave to the lender") that he does mention pretty often. Other than that there's not a lot of religion in his classes. Good luck with getting out of debt!

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for instance I charge all my purchases on a credit card that gives me rewards points, and then pay it off entirely at the end of the month, with the end result being that the credit card company essentially pays me to use their card.

Sing it! I do the same thing and, thus far, I've gotten $850 back (over about 4 years) from a credit card company that I've never paid a penny to in interest (actually, I've never paid any credit card interest period)

Also, at 20 years old, I had a better credit rating than my almost-50 year old mother.

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A lot of Ramsey's stuff seems really basic to me but then I don't think I'm his target audience, I've never had credit card or consumer debt or had to pay interest. Woot! My credit score rocks. Anyway, right now they only debt I have are those evil school loans.

I wonder if the Ramsey stuff would be good for my mother in law, she makes a pretty good income but just doesn't have good financial habits at all.

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I have read about some of Dave's methods and teachings online about finances and they seem pretty good. But I have never read his books. I think some people probably get turned off because of the religious references.

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Guest Anonymous

I do not like the blanket statements some people use though, like "a credit score means you love debt". Uhh, no. I get irritated when people go around parroting their "celebrities" and spouting off about how they believe in paying for everything with cash including their house, of course.

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I have totally heard Ramsey call a credit score a debt score, it's not just his followers.

Caxpax, if you want a similar program but not the religious content, you would like the book Your Money Or Your Life. It was written when interest rates were a lot higher, so some of the investment advice is out of date, but the way of thinking about time and money and aligning what you do with your personal values is awesome, and the practical steps are nearly identical (Have a cash emergency fund, allocate savings first, etc.)

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He has some helpful advice, but I agree with the poster who talked about how some of his listeners need help typing their shoes in the morning.

I did hear him take one of his callers to task, and I was glad he did. The guy called in to complain about his wife buying clothes for their young children. The guy wanted to take her off the checking account so she could not spend any money without coming to him first. Dave called him a tyrant and told him to knock it off. You could tell the guy was shocked that Dave did not agree with him.

You know, my friend, if the truly ignorant never ask, when will they begin to learn? :think: Just a thought! :)

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I have totally heard Ramsey call a credit score a debt score, it's not just his followers.

Caxpax, if you want a similar program but not the religious content, you would like the book Your Money Or Your Life. It was written when interest rates were a lot higher, so some of the investment advice is out of date, but the way of thinking about time and money and aligning what you do with your personal values is awesome, and the practical steps are nearly identical (Have a cash emergency fund, allocate savings first, etc.)

Kind of inaccurate given that you get a better credit score if you pay card off every month

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Only if you actually use it, if you just don't incur the debt they'll cut you off eventually - that happened to me with one card and then I had a hell of time getting another, because of the lack of credit history. I ended up getting a store card with a $200 limit and then credit card offers started pouring in.

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I never understand this obsession with needing a good credit score and building credit. If you follow the Ramsey plan, well you don't need credit!

And yes, I think debt is bad and dangerous.

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