Millions of people follow his biblically inspired advice.
November 1, 2013 8:36 AM   Subscribe

The Prophet: Meet Dave Ramsey, the most important personal finance guru in America. There's probably no better way to learn about the financial lives of individual Americans than to spend a few hours listening to The Dave Ramsey Show, which airs in every major media market in the United States...Listen long enough and you realize you are hearing the raw, unfiltered tragedy of the economic plagues facing 21st-century America. [via]
posted by mediareport (84 comments total) 38 users marked this as a favorite
 
If you talk to personal finance and bankruptcy experts, you’ll discover they believe many people wait too long to declare bankruptcy, and cause themselves unnecessary financial harm in the process. “What happens is they take money that would be protected [in a bankruptcy filing], like home equity or retirement accounts, and keep throwing it at unpayable bills,” personal finance columnist Liz Weston told me.

“Bankruptcy, despite what you hear in the popular press, is still very stigmatized,” says Pamela Foohey, a visiting professor at the University of Illinois’ College of Law. “You don’t want to believe you are a financial failure.” People are looking for ways to avoid declaring it, even if it’s clearly the best course.

Ramsey did not agree to sit for an interview for this article. However, he told the crowd in Houston that he considered his bankruptcy an emotional scar and a painful experience he’d like to help them avoid. “It is not because I filed for bankruptcy that I succeeded. It is because of what I learned when I failed. That’s why I succeeded.”

But contra Ramsey, many people who declare bankruptcy find it a huge relief—including scores of his own followers.

posted by mediareport at 8:41 AM on November 1, 2013 [4 favorites]


Theory: Dave Ramsey's popularity is in part because a large portion of Americans feel uncomfortable taking financial advice from Suze Orman because she's a lesbian.
posted by Apropos of Something at 8:46 AM on November 1, 2013 [28 favorites]


I'm about halfway through her book, and I really recommend it.
posted by jeather at 8:54 AM on November 1, 2013 [1 favorite]


Debt has never been extricable from religion. Confucianism is about human debts and obligation. "Forgive us our debts as we forgive our debtors". The Islamic prohibition on interest.
posted by curuinor at 8:57 AM on November 1, 2013 [13 favorites]


For personal finance and budgeting, I don't have any problems with Ramsey's approach. Get out of debt, live within your means, save for retirement. That's basically it. It's completely unobjectionable, and most people would be better off doing it. The problems are:

1) His "no exceptions" approach. Life happens, and sometimes bankruptcy is the only option. Sometimes you have to take on debt to stay afloat. His advice is good most of the time for most people, but exceptions happen.

2) He completely misses the societal forces making it harder and harder to get ahead. "Work harder" is shallow advice when you are 21 and the only jobs you can get are Subway sandwich artist or an unpaid internship. No matter how fast you make those sandwiches, you're getting minimum wage. I would respect Ramsey a lot more if he were calling out companies for not paying a better wage to the employees who are consistently increasing their profit.

3) Claiming this stuff is "biblically inspired" is ridiculous. The Proverbs do talk about hard work, sure, but the full picture of Biblical finance also includes: bans on charging interest; returning needed collateral to the poor (you can't keep a poor person's cloak overnight); complete debt forgiveness and return of land to the original owners every 50 years; not to mention this:

All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had. With great power the apostles continued to testify to the resurrection of the Lord Jesus. And God’s grace was so powerfully at work in them all that there were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need. (Acts 4:32-36)

In other words, there is almost nothing in the Bible about person finance, but a ton about the systemic view, including numerous prophetic injunctions about not taking advantage of the poor. In Ramsey-world, you are poor because you were dumb or lazy, exclusively. In the Biblical picture, you are poor because powerful societal forces are arrayed to keep you poor. Breaking through that and creating an alternative society was the project of Jesus and the prophets. Ramsey doesn't want to break the stranglehold of the evil powers of the corporate world. He just wants to tell you how to be the escape them. He's making smarter prey, but isn't addressing the predators.
posted by Pater Aletheias at 9:01 AM on November 1, 2013 [176 favorites]


My problem with Ramsey can be summed up in one excerpt from this article:

Ramsey calls the college loan crisis at least in part a “parenting problem” caused by moms and dads who can’t say no, and he is forever telling people to look at state schools. That the cost of attending public universities has itself increased by more than 25 percent over the past five years, rendering them increasingly unaffordable as well, doesn’t seem to figure into his analysis.

Though the next line helps too:

In the quagmire of today’s economy, Ramsey offers moral clarity: If you work hard, you can make it.

...with no regard for the reality that hard work maybe necessary but it is not always sufficient.

What Dave Ramsey has to say is helpful for an awful lot of people. But it is by no means the universal truth it claims to be. Part of me, the snarky part, finds that appropriate for financial advice that claims to be "Biblically inspired."
posted by Tomorrowful at 9:05 AM on November 1, 2013 [17 favorites]


curuinor >

Debt has never been extricable from religion. Confucianism is about human debts and obligation. "Forgive us our debts as we forgive our debtors". The Islamic prohibition on interest.

That's an interesting point. Might it not be equally accurate to say that religion draws a great deal of its power from the transcendental authority by which it makes claims upon the character of social and interpersonal obligation?
posted by clockzero at 9:06 AM on November 1, 2013 [2 favorites]


Pater Aletheias: Ramsey doesn't want to break the stranglehold of the evil powers of the corporate world. He just wants to tell you how to be the escape them. He's making smarter prey, but isn't addressing the predators.

I wouldn't necessarily say he's making the prey smarter. His message of no bankruptcy, paying smaller debts first (neatly overlooking the most important factor of interest), and paying debts at any cost plays nicely into the hands of the finance industry. This guy will persuade your debtors to never default by any means necessary. Who could ask for a better accomplice?
posted by dr_dank at 9:10 AM on November 1, 2013 [17 favorites]


A hypocritical rich guy peddling a one-size-fits-all solution while reinforcing the view that the ladder isn't being pulled up fullstop, only to keep the less deserving from using it (and you won't be undeserving after using the advice from my $40 lecture, will you?).
posted by Slackermagee at 9:11 AM on November 1, 2013 [1 favorite]


Apropos of Something: "Theory: Dave Ramsey's popularity is in part because a large portion of Americans feel uncomfortable taking financial advice from Suze Orman because she's a lesbian."

I thought it was because she gives horrible advice.
posted by Big_B at 9:12 AM on November 1, 2013 [15 favorites]


"Work harder!" -Rich people
posted by vibrotronica at 9:13 AM on November 1, 2013 [29 favorites]


Theory: Dave Ramsey's popularity is in part because a large portion of Americans feel uncomfortable taking financial advice from Suze Orman because she's a lesbian.

I don't think it's because they're uncomfortable with Orman (though maybe they are) so much as they are completely comfortable with Ramsey. I live in the heart of Dave Country (Around 30 minutes away from his headquarters) and he perfectly channels the Southern conservative tradition on this stuff. His listeners are hearing the same stuff from him as they do from their family and their church, he just gives it weight and authority.

I'm not sure how to judge him. I'm sure he wants to help people and some (many?) people definitely do benefit from the message but I consider the seminars and videos to be the same as any other self-help trash.


1) His "no exceptions" approach. Life happens, and sometimes bankruptcy is the only option. Sometimes you have to take on debt to stay afloat. His advice is good most of the time for most people, but exceptions happen.

2) He completely misses the societal forces making it harder and harder to get ahead. "Work harder" is shallow advice when you are 21 and the only jobs you can get are Subway sandwich artist or an unpaid internship. No matter how fast you make those sandwiches, you're getting minimum wage. I would respect Ramsey a lot more if he were calling out companies for not paying a better wage to the employees who are consistently increasing their profit.


1. I suspect he would agree some of what he advises is sub-optimal from a financial perspective but he feels that the simple, strict program works best with people who have already gotten into trouble with complex debt situations.

2. On an individual level "yes, you are in a shitty situation, but you can escape it if you buckle down and work harder" is not terrible advice. I would prefer if he would add "...and remember that you can vote to make the situation better by x/y/z" but it doesn't make the first part less true, and it dilutes the simple message.
posted by ghharr at 9:15 AM on November 1, 2013 [6 favorites]



paying smaller debts first (neatly overlooking the most important factor of interest)


I have seen a lot of debate about this one point. Personally, I think it's a good idea from a human psychology perspective, to show early progress by eliminating one debt account. A small first step.
posted by KaizenSoze at 9:16 AM on November 1, 2013 [13 favorites]


I'm interested in the tensions this stuff produces. It reminds me of the diet wars as well. There are sound practical reasons to believe things that are only partially true. The injunction to live within your means and to work hard is practical helpful advice and it does good to live as if it were the a path to prosperity in much the same way straight up calorie counting using a 3500kcal to a pound is an effective way to diet. Reality is much more complicated but these things are like a map giving directions. Quibbling that the map leaves out larger societal forces, metabolic differences or the texture of the pavement misses the point of the map.

Bankruptcy is like financial stomach stapling. It should be an option but it is an emergency option and it doesn't solve the issues of financial planning that got you into trouble in the first place. Leaving it on the table as option means you can always financially plan like an underpants gnome with bankruptcy being the three magic dots. Removing it from consideration means you won't plan on it rather than that you will never use it.
posted by srboisvert at 9:20 AM on November 1, 2013 [4 favorites]


Most people lack even basic financial literacy, and I'm in favor of them getting more of it. "not great" is better than "none" sometimes. Especially if it leads to more learning and investigation.
posted by blue_beetle at 9:26 AM on November 1, 2013 [1 favorite]


paying smaller debts first (neatly overlooking the most important factor of interest)

If you have $50K in credit card debt spread across 8 cards odds are paying off the lowest balance first while ignoring interest rates may cost you $1000 in the long run. However, it may also make it far more likely that you will succeed in paying them off, which would make that $1000 the best $1000 you ever spent.
posted by COD at 9:26 AM on November 1, 2013 [13 favorites]


I mostly logged in to say what Pater Aletheias said, but he said it a lot better than I would have.
posted by infinitywaltz at 9:37 AM on November 1, 2013 [2 favorites]


Bankruptcy is like financial stomach stapling. It should be an option but it is an emergency option and it doesn't solve the issues of financial planning that got you into trouble in the first place.

Considering the fact that healthcare debt is the most common reason for bankruptcy, there's only so much you can blame on "poor financial planning."
posted by infinitywaltz at 9:37 AM on November 1, 2013 [14 favorites]


paying smaller debts first (neatly overlooking the most important factor of interest)

So I may have just criticized him, but I'm going to swing back and strongly defend the "Debt snowball." Ramsey does very clearly acknowledge that it's mathematically less efficient, but psychologically it helps enormously. He's not the only one who thinks so; JD Roth, formerly of Get Rich Slowly, is a fan of the snowball on the grounds that what gets a lot of people into money trouble in the first place is their own habits, so just talking about what's logically/mathematically superior isn't always going to help. If you have the discipline to pay back your debts in order of their interest rate, that's awesome, go ahead and do so. But a lot of people got into debt in the first place because they didn't have the iron discipline to do things "correctly," so let's focus on systems that make debt payback feel good, and leverage human psychology to maximize chances of overall success. Paying a few more dollars in interest over the long run is a great investment if it means that the debt is more likely to actually get paid off.
posted by Tomorrowful at 9:37 AM on November 1, 2013 [19 favorites]


I began listening to conservative talk radio about five years ago to stay current with what was entering my parents' ears on a regular basis. Ramsey's is the only decent show and a blessed (pardon the expression) relief from the bile and bilge pumped out of the adjacent programming. His advice is basic, practical financial literacy, and he offers it mostly without judgment (miraculous to me, given how patently stupid some people's choices are). As others have noted, it's not perfectly calibrated in all cases, but I consider the man's show a net good for society.
posted by echocollate at 9:40 AM on November 1, 2013 [8 favorites]


I will also jump in to say that the psychological aspects of both debt and money matters in general can be very important and shouldn't be overlooked in favor of just hard numbers.

Also: Math Suckage and Dave Ramsey
posted by triggerfinger at 9:48 AM on November 1, 2013 [1 favorite]


It's Jesus-flavored tea bagged nonsense, but at least he isn't telling people to buy ridiculous houses.
posted by Artw at 9:52 AM on November 1, 2013 [1 favorite]


He uses Jesus to make a profit off poor people. What do you suppose Jesus would think of that?
posted by Mary Ellen Carter at 9:53 AM on November 1, 2013 [6 favorites]


Eh. The world has way worse messages to offer than Ramsey's.
posted by kyrademon at 9:58 AM on November 1, 2013 [3 favorites]


Eliminating debts smallest-first also has the benefit of freeing cash flow. I may have a debt that is relatively small in total, but which if I pay the minimum payment will tie up 10% of my income every month. Once I've eliminated it, I've freed up a big chunk of change - which makes me more able to be agile with my spending.
posted by sonic meat machine at 10:01 AM on November 1, 2013 [4 favorites]


He uses Jesus to make a profit off poor people. What do you suppose Jesus would think of that?

Another, more charitable way of looking at it is that he uses Biblical appeals to frugality to connect with a largely Christian audience (at least in the U.S.), which may carry more weight than a purely secular (read: practical) argument for saving and budgeting.

The man is hardly preaching with hat in hand.

As an atheist, I couldn't care less whether he makes money off his books and programming. He's spreading basic financial literacy like the gospel in a country where it's sorely lacking. I'm OK with that, even if he undersells the systemic problems.
posted by echocollate at 10:04 AM on November 1, 2013 [5 favorites]


Excellent BookTV interview w/Helaine Olen (the author of the originally posted article).
posted by cog_nate at 10:05 AM on November 1, 2013 [1 favorite]


Considering the fact that healthcare debt is the most common reason for bankruptcy, there's only so much you can blame on "poor financial planning."

Precisely why we should be fearing "acts of god"!
posted by The 10th Regiment of Foot at 10:08 AM on November 1, 2013


PS Mag is quickly becoming my favorite feed in the ol RSS reader.

Also, Helaine Olen - the author of this article - wrote a wonderful book on the shortcomings of the personal finance industry called Pound Foolish that I would recommend to anyone interested in the role personal finance plays in the debt-focused late capitalism of our modern economy.
posted by willie11 at 10:09 AM on November 1, 2013 [4 favorites]


Theory: Dave Ramsey's popularity is in part because a large portion of Americans feel uncomfortable taking financial advice from Suze Orman because she's a lesbian. adressing the problems of an imagined middle class that still has disposable income.
posted by j_curiouser at 10:12 AM on November 1, 2013 [2 favorites]


...uncomfortable taking financial advice from Suze Orman...

That and the whole jewish thing.
posted by The 10th Regiment of Foot at 10:20 AM on November 1, 2013


The fact that we don't teach kids basic financial literacy starting in grade school is fucking criminal, bordering on (as much as I loathe the word) conspiracy.
posted by gottabefunky at 10:21 AM on November 1, 2013 [9 favorites]


he considered his bankruptcy an emotional scar and a painful experience [...]

But contra Ramsey, many people who declare bankruptcy find it a huge relief


My emotional scarring was from the years of falling further & further behind until there was no other option. The relief I got upon receiving my discharge of debtors notice in the mail, post-court appearance was visceral. When I was young & still learning to navigate life, I thought credit was a sign of adulthood, & that debt just went with credit. So long as you're moving the decimal point over in both columns, who cares? Then one day, the decimal point in the income column moved back a space to the left. I tried like hell for two long-ass years to swim upstream, did the credit consolidation counseling thing, was trying to be a man and pay my debts, but with income through the floor, it just wasn't happening.

I probably added 10 years to my life by getting out from under when I did. I haven't borrowed a dime from a financial institution in almost 7 years now, and am beginning to (finally) build a tiny nest egg under the mattress. I don't give one tiny flying fuck what my credit rating is -- Never going back again.
posted by Devils Rancher at 10:23 AM on November 1, 2013 [9 favorites]


The fact that we don't teach kids basic financial literacy starting in grade school is fucking criminal, bordering on (as much as I loathe the word) conspiracy.

I agree. I was lucky enough to have a mother who used to work in the banking industry to teach me a lot of this stuff. She set me up with some kind of "savings account for kids" at Bank of America when I was like eight or nine, and taught me how to read bank statements. One time there was some one or two dollar fee that wasn't supposed to be there, and she made me call the bank to have it reversed. It was the principle of the thing, she said, even if it was just a dollar.

"What do I tell them, mom? I'm only nine; I don't know what to say to...bank...guys."

"Tell them I'm not going to feed you until they take the charge off."
posted by infinitywaltz at 10:26 AM on November 1, 2013 [37 favorites]


The problems are:

1) His "no exceptions" approach. Life happens


Yes, but it is psychologically helpful to start with a very firm resolution. Even if you don't keep it, you will probably fail less than someone who was compromising with himself from the start. If two people have the same commute, and the first simply decides never to be late to work, while the second decides to do his very best never to be late, they might still both come in late sometimes. But the first person will be late much more rarely, and only due to things like epic, newsworthy traffic or life-threatening illness, while the second might be late because it took too long to walk the dog or some stupid thing. In such cases the perfect is the friend of the good.
posted by officer_fred at 10:31 AM on November 1, 2013 [3 favorites]


He's spreading basic financial literacy like the gospel in a country where it's sorely lacking. I'm OK with that, even if he undersells the systemic problems.

De-emphasizing longterm structural debt and recurring costs doesn't seem like the best financial advice to me, though. He's not spreading basic financial literacy, but a watered-down simplified version of it that ignores the overwhelming importance of long-term debt and mandatory, recurring expenses.

It sounds like advice designed to studiously ignore the 800 pound-gorilla in the American economy: Because wages have stagnated while economic growth has otherwise continued unabated, and the gap has been papered over by forcing people into assuming larger amounts of long-term debt for basics like education, housing and transportation (all of which has only been exacerbated by the last 30 years of easy credit policy), ordinary people have to be much more heavily leveraged now as a proportion of their overall wealth just to participate in our economic system and survive.

Financial advice that encourages people to count their nickels and dimes more closely rather than acknowledging these underlying structural economic changes only plays into the prejudices of those unwilling to acknowledge these deeper problems and reinforces victim-blaming by framing it all in terms of individual responsibility and personal discretionary spending.

Sure, it's good practical advice for adapting to increasingly maladaptive contemporary economic realities, but to the extent it doesn't contextualize this stuff in terms of the shifting economic policies of the last few decades, it doesn't address the real underlying causes so many more people are struggling than in the past.
posted by saulgoodman at 10:33 AM on November 1, 2013 [12 favorites]


I used to listen to Ramsey 10-15 years ago. I don't agree with everything he says (particularly the goal of avoiding debt at all costs and the stigma of bankruptcy) but the basic advice to live below your means, borrow less, and save more makes sense. Of course it's the same advice that pretty much every personal finance guru gives. After awhile his advice and the callers started to sound like the same stuff over and over again so I lost interest and found other things to listen to. I still see his name in the local media from time to time whenever some local church decides to push one of his products, like the Financial Peace University. I wonder what (if anything) their cut is. The article wasn't clear on that, at least to me.

It seems he has become quite good at self promotion. Statements like these just make my eyes roll:

“I’m not here to get your money,” he said to an audience of people who had paid $39 a ticket. “I am here to change your life.”

In late 2009, he appeared on Glenn Beck’s Fox TV show to talk about the financial crisis. “This time last year, the whole world was coming to an end, remember? And I strangely felt like a spectator,” Ramsey said. “My home’s paid for, I’ve got a pile of money in the bank—not because I’m some rich guy on TV or something, but just because I’ve worked a system to take control of me and mine: It’s called personal responsibility.”

Umm, I bet being a rich guy on TV sure doesn't hurt. I wonder where he would be if he hadn't gotten a fresh start by declaring bankruptcy all those years ago.
posted by TedW at 10:33 AM on November 1, 2013 [7 favorites]


So to summarize this post, article and many comments...

"He's a Christian so let's find something wrong with him, he's obviously angling for some sort of hypocritical gain.

- He gives financial advice and he charges $40 for it (GOTCHA!).

- He gives one size fits all advice and doesn't address each person's individual situation (NEGLIGENCE!).

- He relates financial wisdom to biblical teachings (MANIPULATOR!, HERETIC!).

- He tells his listeners to stay out of debt and spend only what you make (ignore this, see first point above).

- His contemporary is Suzi Orman (QUICK MAKE INTOLERANT REMARK ABOUT CHRISTIANS!)."
posted by Descent at 10:46 AM on November 1, 2013 [3 favorites]


One thing I noticed reading the article is that a lot of his classes (not his personal appearances, but the various seven and nine-week courses or whatever) are actually a lot cheaper than what I would have expected.
posted by infinitywaltz at 10:49 AM on November 1, 2013 [2 favorites]


Financial advice that encourages people to count their nickels and dimes more closely rather than acknowledging these underlying structural economic changes only plays into the prejudices of those unwilling to acknowledge these deeper problems and reinforces victim-blaming by framing it all in terms of individual responsibility and personal discretionary spending.

I see that idea on places like MetaFilter all the time, and it is so deeply weird to me.

First, it's eminently possible to acknowledge that the system limits people's options, but within those limits they still have agency, so if they make good choices they can improve their own outcomes -- I just did it. Hari Seldon did invent psychohistory, but even he knows that it only makes probabilistic predictions for individuals.

Second, if someone has such limited mental resources that they really cannot hold both ways of looking at the world in their mind at the same time, I definitely want them to remember personal responsibility at all costs and forget social criticism if necessary. Le Resistance will struggle on without them somehow, but everyone needs to be able to get through the day. Right?
posted by officer_fred at 10:49 AM on November 1, 2013 [8 favorites]


Sure, it's good practical advice for adapting to increasingly maladaptive contemporary economic realities, but to the extent it doesn't contextualize this stuff in terms of the shifting economic policies of the last few decades, it doesn't address the real underlying causes so many more people are struggling than in the past.

His basic, simple message of "borrow less, create a budget prioritizing necessities and purchase luxury items only commensurate with your means, and save and invest more of your income where possible" is the best general advice one can give to the working class to thrive in both the short and long term. He has no control over wage stagnation and other systemic issues so I'm not sure what polemicizing would contribute to helping people better manage their finances.

Note, I'm in no way disagreeing on the severity of the economic landscape. It's bad.
posted by echocollate at 10:52 AM on November 1, 2013 [4 favorites]


Umm, I bet being a rich guy on TV sure doesn't hurt. I wonder where he would be if he hadn't gotten a fresh start by declaring bankruptcy all those years ago.

I'm curious if the guy's bankruptcy took place under the old rules, or after Bush's bankruptcy reforms made bankruptcy less forgiving (and made college debt effectively unforgivable).

So to summarize this post, article and many comments...

Cites please? I think I've seen more non-Christians in this thread arguing on behalf of actual scriptural views on financial matters here than I have seen them bashing Christianity or tarring Ramsey by association. What am I missing?

First, it's eminently possible to acknowledge that the system limits people's options, but within those limits they still have agency, so if they make good choices they can improve their own outcomes -- I just did it. Hari Seldon did invent psychohistory, but even he knows that it only makes probabilistic predictions for individuals.

Sure, but the culture as a whole is currently knee-deep in shaming poor people. I just don't think it's helpful to ignore that there have been actual changes in what it takes to get by that are driven by structural changes and policies beyond individual control. People still don't really seem to understand or want to acknowledge how important that is.
posted by saulgoodman at 10:54 AM on November 1, 2013 [6 favorites]


I suspect the "Biblicaly based" thing s there mainly to enhance his moral authority, or that of his teachings.
posted by thelonius at 10:54 AM on November 1, 2013 [2 favorites]


His basic, simple message of "borrow less, create a budget prioritizing necessities and purchase luxury items only commensurate with your means

...Which conveniently ignores that it's structurally much harder to live and get by without more borrowing than in the past.
posted by saulgoodman at 10:55 AM on November 1, 2013 [3 favorites]


The article is what everybody need to read in other to understand that Ramsey is part of the problem. Flaunting his wealth from his books and shows is not right.

His message might sound authentic in America where credit cards rule but long term planning against poverty depends on so many factors like luck and God's guidance.
posted by Yiba at 10:57 AM on November 1, 2013 [1 favorite]


"Money" is at the base of a culture's false sense of "moral good" and how we believe it "outghta play out" to make sure everyone gets "their fair share". I think it is all kind of dumb, really, because there's plenty to go around for everyone. The larger frame is that we are being totally fucked over and fleeced nine ways to sunday by our "moral masters" while we argue over how to divide an ever-miniscule slice of shit pie.
posted by Annika Cicada at 11:24 AM on November 1, 2013 [5 favorites]


I'm curious if the guy's bankruptcy took place under the old rules, or after Bush's bankruptcy reforms made bankruptcy less forgiving (and made college debt effectively unforgivable).

Wikipedia: "Ramsey's success soon came to an end as the Tax Reform Act of 1986 began to have a negative impact on the real estate business. One of Ramsey's largest creditors was sold to a larger bank, which began to take a harder look at Ramsey's borrowing habits. The bank demanded he pay $1.2 million worth of short-term notes within 90 days, forcing him to file for bankruptcy relief."

Sounds like it was quite a long time ago.
posted by Steely-eyed Missile Man at 11:25 AM on November 1, 2013 [1 favorite]


You know, you could be a Dave Ramsey minister if you attend one of his seminaries for a lower-than-Hades price of $1995
posted by surplus at 11:36 AM on November 1, 2013


Haven't read the comments yet, but it seems like this is a weird Biblical fiscal anorexia, where the power of self-mortification substitutes for actual control.
posted by klangklangston at 11:47 AM on November 1, 2013 [1 favorite]


During the dot com bubble years it seemed like everyone around you was talking money and investments, and of course there were charlatans of every stripe putting out get rich quick books that merely made the authors rich with money from the fools who bought those books. As a result, I was deeply skeptical of any and all widely popular financial advice books. I became the go-to skeptic guy at work, who would find fault with the various investment schemes. During one of those arguments, when yet again, I was being proselytized on the merits of some book, one guy mentioned this Dave Ramsey guy and guaranteed that I could find no fault with that advice. He gave me the book - I don't even remember the title - and very reluctantly, I started reading it.

I got to the place where Ramsey strongly argued for actively managed funds and against index funds - in a book addressed to the average financial investment noob out there. The historical returns on index funds - 9%. Actively managed funds, 7.5%. I immediately stopped reading, and closed the book.

Dave Ramsey is a chiseler who is getting rich off of bad advice. He may be less destructive than some, and he gives commonsensical advice that is trivially true - don't spend more than you earn - all wrapped up in readymade homilies, but he does give bad advice. Financial education is sorely needed in this country, but the measure of a good book should not the popularity of the author or his religion.
posted by VikingSword at 11:49 AM on November 1, 2013 [8 favorites]


I just don't think it's helpful to ignore that there have been actual changes in what it takes to get by that are driven by structural changes and policies beyond individual control.

I'm not for ignoring structural changes. I'm simply for remembering both things at exactly the same time, or, if it's necessary to triage your attention, to remember personal responsibility first, as you can't even get out of bed without that.

So, yeah, to the barricades, definitely. But does every single message have to be about fighting the power? Can we have no books about, like, cooking or algebra, or personal finance? My position is that that demand is a little much.
posted by officer_fred at 11:51 AM on November 1, 2013 [3 favorites]


MoonOrb really does have a point. I used to listen to Ramsey in his early Money Game days when it was a lot more small time and local in the Nashville area. His advice to callers was mostly common sense and most of them were deeply into consumer debt (note: NOT medical bills) In general the things he advised were simple, pay down higher interest debt first. Saving is great, but the interest you get in return is not as great as holding high interest debt. Later that was expanded to an overall philosophy, which is clearly not applicable to all situations. In most cases, because of where most people are with their consumer debt, it does make sense.
posted by The 10th Regiment of Foot at 12:07 PM on November 1, 2013


"So to summarize this post, article and many comments..."

You sure seem invested in ignoring legitimate criticisms in order to stoke a persecution complex, at least for a guy who doesn't seem to be on Ramsey's payroll.
posted by klangklangston at 12:12 PM on November 1, 2013 [3 favorites]


So to summarize this post, article and many comments...

No nuance, none of the time.
posted by Slackermagee at 12:14 PM on November 1, 2013 [1 favorite]


I think that one of the more interesting takes on Olen piece comes from Felix Salmon. It concludes:
...if America is going to become a more financially healthy country, it is going to have to address its money problems on both the individual and the policy level. The Pew Charitable Trusts have just released a huge report on payday lending, with some very sensible ideas about how it should be regulated nationwide. That’s a great policy recommendation, and I daresay Dave Ramsey might even approve of it. But at the same time, the discipline of the Ramsey method really does work on an individual level. So let’s not snipe too much at his gospel. His investment advice is bad, and his saving-and-paying-down-debt advice can be simplistic. But on net, Ramsey is improving the plight of millions of America’s households. Which has got to be a good thing.
There is something to this, I think. Still, I can't shake the thought that a new problem ultimately arises.

Those people who succeed in the Ramsey approach, people who are already predisposed to its-all-my-fault thinking, may never be persuaded of the larger issues and the need for policy reform. In other words, there is the risk that Ramsey success stories end up forming the shock troops of tea party austerity efforts.
posted by Hypnotic Chick at 12:18 PM on November 1, 2013 [2 favorites]


I'm not for ignoring structural changes. I'm simply for remembering both things at exactly the same time, or, if it's necessary to triage your attention, to remember personal responsibility first, as you can't even get out of bed without that.


I'm going to expand my previous thoughts a little:

First, I'll repeat that there is nothing wrong with his basic message, when it comes to budgeting and personal finance. Like others have said, it's nothing new, and he says that himself again and again.

Second, I'm not one of those people attacking Ramsey from the outside. Full disclosure here: I might know Ramsey's stuff better than anyone else on Metafilter. As a pastor, I introduced his Financial Peace University curriculum to my church, and personally taught the full series of lessons twice before handing it off to my associate minister, who continued the program. We ran FPU three times a year--basically non-stop. At the time it was a thirteen week curriculum. I gave his book to couples when I did pre-marital counseling. One of my best friends went to Nashville to become a certified Financial Peace Financial Counselor, and Ramsey used him as an example in the first edition of Total Money Makeover. I've used the Ramsey stuff, endorsed Ramsey, and would probably still use his stuff, although with caveats. Search my AskMe answers and you'll see me recommend him numerous times.

But: his ignorance of systemic problems is a de facto endorsement of the current system when the rich get richer and the poor stay the same. He peddles the lie that by being smart you can get ahead, and never ever acknowledges that for some people that isn't true.

I haven't done an exhaustive enough analysis of his radio programs to check this, but my strong impression is that he started off as a fairly "pure" financial advice guy, and as his empire expanded, fell increasingly into the hands of the evangelical-Republican-alliance. For example, a couple of weeks ago my Facebook feeding started filling up with links to this snippet from his radio show where he "tells the truth about Obamacare." Honestly, it made me lose a lot of respect for him. I've been rethinking him ever since, and that is certainly affecting my responses today. Under the guise of common sense, math-based, objective analysis, he does a stupid, mendacious twisting of the Affordable Care Act, simultaneously claiming that everyone will have higher premiums because the insurance markets will be flooded with a disproportionate number of sick people AND that Obamacare is anti-freedom because all people, sick or not, have to sign up for insurance. He's either too stupid to realize those are contradictory complaints, or he's flat out lying to give political cover to his Republican buddies. He ignores all cost-saving measures and, worse, ignores the actual numbers. It was recorded on October 4 this year when the exchanges were open and he could have talked about actual numbers, but he gives his audience propaganda. There's also a nice swipe at the 47% "who pay no taxes" and "the rest of us support you" as well as an invocation of the lazy "500 pound diabetic" who will cause your insurance to go up and maybe cause you to lose your job because your employer will have to make up the money he loses through higher insurance costs.

I hadn't realized how bad he had gotten, but at this point the stuff that is passed around social media is pure GOP talking points. Half the country is lazy, the hard working ones support you, and you are going to cost us money because of Obama's socialist anti-freedom policies.

There were places where I had qualms about Ramsey before, but I always thought he was honest. I can't believe that anymore, and I used to really like this guy. But he sold out somewhere along the way, and I can't trust anymore that he actually has the best interests of struggling people in mind.

That YouTube clip, by the way, has been seen 1.7 million times.
posted by Pater Aletheias at 12:20 PM on November 1, 2013 [53 favorites]


Yeah, it doesn't seem like a very long line to draw between this and the "the federal budget is just like a family budget" folks.

his ignorance of systemic problems is a de facto endorsement of the current system when the rich get richer and the poor stay the same.

It's a dog eat dog world, and the rich are Michael Vick.
posted by Steely-eyed Missile Man at 12:24 PM on November 1, 2013 [4 favorites]


I parted ways with Ramsey a long time ago because of the snowball method and the general snobbish/a-hole way he talks to callers. However, I agree with some up thread who have said he's definitely not the most dangerous person to listen to...
posted by getawaysticks at 12:26 PM on November 1, 2013


Yeah, it doesn't seem like a very long line to draw between this and the "the federal budget is just like a family budget" folks.

It is just like a family budget when you factor in mom's disability check, the mortgage, the small business loan dad took out for his Beanie Baby store (and subsequent bankrupcy), the research grant that Jr. got, Little Susie's farm subsidy check...
posted by The 10th Regiment of Foot at 12:36 PM on November 1, 2013 [4 favorites]


And that fact that your family is essentially immortal and prints their own currency.
posted by Pater Aletheias at 12:37 PM on November 1, 2013 [11 favorites]


Ramsey scares me because of his penchant for shilling stuff to people who are already broke. I don't think the "no exceptions" thing works but I think it's forgivable; he's trying to make simple rules and exceptions are complicated. But his advertising has always born a marked resemblance to Glenn Beck's. Your life will be better if you just use USLegalForms.com and don't consult an actual attorney (heaven forbid we mention Legal Aid) and wasn't there something for awhile with nutritional supplements?

But if we sent people to Legal Aid for help, they might also get told that bankruptcy was an option and even affordable and then they might get out of debt without delivering pizzas and then the American work ethic will fall apart. If we encouraged seeing real experts then people might value real education and possibly take out student loans. It all kind of fits in with the general ethic.

And still, his stuff on budgeting is quite good. I really think that Suze Orman turns people off, not because she's gay, but because she's not been as good with providing straightforward instructions, and people who are overwhelmed by their money want the comfort of simplicity.
posted by Sequence at 12:38 PM on November 1, 2013 [7 favorites]


First, I'll repeat that there is nothing wrong with his basic message, when it comes to budgeting and personal finance. Like others have said, it's nothing new, and he says that himself again and again.

(Nods) Okay, we mostly agree then.

But: his ignorance of systemic problems is a de facto endorsement of the current system when the rich get richer and the poor stay the same. He peddles the lie that by being smart you can get ahead, and never ever acknowledges that for some people that isn't true.

I guess. And what you say about politics is definitely troubling. I guess what it comes down to is that I have trouble figuring out how much it matters if some prominent person doesn't acknowledge something. What do we actually lose, in concrete terms? How can we even estimate something like that?

This is related to the larger problem of how much good Raising Awareness actually does. What actually happens, if more people are aware of something? Does anything happen? Everyone on the internet talks about rhetoric and discourse with lots of ethical urgency, but where do the effects actually come out in the real world? Does anyone even notice?
posted by officer_fred at 12:39 PM on November 1, 2013


Gah, I had most of a long screed written and Peter Aletheias goes and says it much better.

The problem is that the structural issues aren't orthogonal to his message, his message is predicated on a flat denial of them. It's really just prosperity gospel stuff -- the rich are rich because they're better -- and while you can argue that he's using this to motivate people to improve, he's also aligning both himself and his audience with a political philosophy that runs directly counter to the interests of those he's claiming to help.
posted by bjrubble at 12:41 PM on November 1, 2013 [8 favorites]


And that fact that your family is essentially immortal and prints their own currency.

Let's not forget about dad's HUGE collection of guns just in case the neighbor's get any ideas!
posted by The 10th Regiment of Foot at 12:47 PM on November 1, 2013 [3 favorites]


I recently heard him advise a new civil servant to eschew a defined pension plan in favor of a 501k or 503B so he could self direct his money.
posted by Tullyogallaghan at 12:49 PM on November 1, 2013 [2 favorites]


And that fact that your family is essentially immortal and prints their own currency.

Another irony in this Federal government as household analogy, of course, is that, as a percent of income (measured in GDP), the national debt proportionally isn't much greater than the typical household's. In 2007, for example, the US household debt-to-income ratio was around 130.2%, while in 2011, the US debt to GDP ratio was 100% (so, in fact, the US as a whole was arguably living more within in its means in 2011 than the typical US household was in 2007).

The bad analogy and its implications don't even hold up to closer scrutiny on their own terms.
posted by saulgoodman at 1:04 PM on November 1, 2013 [4 favorites]


I recently heard him advise a new civil servant to eschew a defined pension plan in favor of a 501k or 503B so he could self direct his money.

The irony of this is, if the 501k is anything like the 401k, your money is hardly "self-directed," because you get a fairly narrow choice of purpose-built funds to put your money into, and that's it. If you're going to pretend to give me freedom with my retirement money, at least give me actual freedom. I don't even know how it's legal to do it the way it's currently done.

No wait, ha ha, of course I do. I will not make the mistake, even rhetorically, of assuming that anything was made with my benefit in mind.
posted by Steely-eyed Missile Man at 1:11 PM on November 1, 2013


We went thru Financial Peace University a couple of years ago. The church paid for us to take it as we had just lost our house and our income had been slashed horribly.

The price was a hundred bucks (as I said, they picked it up) but that got us a kit including a book and other items plus we can go through FPU any time we want for free forever.


As to the advice-most of it was basic stuff, but it was basic stuff that we weren't familiar with, sadly. If we had gone through it thirty years ago life would have been a lot different.

Now in the circumstances we were in, we really couldn't put much if anything he said into practice at the time, which was a bit frustrating. But the fact that this class finally convinced my husband that credit cards were evil made this thing worth its weight in gold as far as I am concerned.

As to Christian advice-well, he doesn't advice charitable giving until you are totally out of debt, so there's that. I didn't see it as Christian as much as I saw it as reasonable common sense for people who had no financial common sense. The guidelines he sets up are rigid but they are set up in a way that people can succeed.

I was also impressed that he addressed the fact that most married people have a saver and a spender, and he did not demonize either. In fact in budgeting he tells people to budget something for "fun money".

I won't say I agreed with him on everything but as we are continuing to crawl out of the hole that the Financial Disaster of 2008 dealt us, he has been more than helpful.

(He also gives great advice about how to handle debt collectors which was VERY helpful both practically and emotionally. )

As far as bankruptcy many Christians have a moral problem with it. (We have not pursued that option but I can say that at this point I don't look down on people who do. There's not a total consensus on the topic. I figure if God took the time to put the concept of Jubilee in the Bible He might not have that big a problem with it Himself.)


He has a more secular version of the class that one can teach in a school setting, for example. I think every high school in the country should have something like it available. It is an utter disgrace young people aren't automatically taught this stuff, and it does make me wonder if it is on purpose on my more cynical days.
posted by St. Alia of the Bunnies at 1:14 PM on November 1, 2013 [6 favorites]


I look at all the intertwining of monetary debt with morality going on in this thread and all I can see is David Graeber standing off to one side raising his eyebrow.
posted by Steely-eyed Missile Man at 1:22 PM on November 1, 2013 [4 favorites]


It makes sense that personal finance guruing blends well with religious talk. I think confused people in trouble of all stripes want to hear hard-and-fast rules. They also want a promise of results. "I will do A, then I will get B." This includes alcoholics and sexually frustrated young men.

I had heard about Dave Ramsey back when I was following Get Rich Slowly (which is probably the most reasonable personal finance blog I've read, yet it still has a confessional quality, and the comments section has a culty vibe), and I thought he sounded reasonable, even if he wrapped his advice in a religious context (for more effective delivery).

Upon reading the article, I see he's chasing people away from bankruptcy and getting health insurance through the ACA, so it turns out I was wrong. He's hurting people as well as helping.
posted by ignignokt at 1:47 PM on November 1, 2013 [4 favorites]


As far as bankruptcy many Christians have a moral problem with it. (We have not pursued that option but I can say that at this point I don't look down on people who do. There's not a total consensus on the topic. I figure if God took the time to put the concept of Jubilee in the Bible He might not have that big a problem with it Himself.)

There're also the prohibitions on usury and, really, the whole concept of salvation itself. A religion in which the central figure is a wronged party willingly suffering for the forgiveness of others and offering a literal new, redeemed life to all comers is rather hard to reconcile with a rejection of bankruptcy.
posted by kewb at 2:32 PM on November 1, 2013 [4 favorites]


I don't know about Dave Ramsey. But I had to stop reading the article there, because I was getting very mad and sad at the same time:


it’s the cost of fairly basic extracurricular activities for her kids that’s driven her back into the red. “It’s not that we are buying them designer clothes,” she says. “It’s that we want them to do sports.”


I left France for the US several years ago, and although I made the choice of living in this country because I love it, and hate France for many reasons, some things are just incredibly wrong here, and this guy, this article brings them out very clearly.

1) Availability of credit. I'm floored by the percentage of Americans who decide to buy things they can't afford because they can just put it on their credit card. It's not the people's fault, like this guy seems to imply, but it's a problem of availability of credit. At some point, the bank's responsability to an individual is to give them 'reasonable' credit, that the bank knows they will afford to repay. It's SO easy to use your credit card and not think about the consequences, and it's designed for that. It's designed to maximize the bank's profit, and therefore to maximize the amount of debt outstanding.

You can't expect individuals to make this decision by themselves. Loans are a very complicated financial instrument, and they're hard to grasp completely.

You also can't expect banks to decide this by themselves. They're trying to maximize their profit.

It's the government's role to regulate the banks more closely, to avoid such a wide availability of credit. Which leads me to my next point:

2) Criminal interest rates! How the hell is it legal to charge people 20+% interest on their credit card? This kind of interest should be completely outlawed; it basically guarantees that the person who contracts this loan will never be able to repay it, and leave a huge chunk of their money to the banks. Once again, it's the government's role to regulate this - a loan with a 20% interest rate is essentially a high yield asset. In the banking system, investors can't invest in high yield assets until they're very, very qualified. Why would any decent set of regulations allow any individual to essentially get SHORT (yup, that's what it is) a high yield asset?

3) Student loans. Same story.., at least it seems there's some effort to have the interest rates contained and reimbursement programs for the lowest incomes. But the government should somehow be able to implement a cap on college tuition fees..

Anyway, I don't want to sound like I'm a huge supporter of a socialist government, but I believe that these regulations are 'basic' regulations implemented in most developed countries in the world.

Why aren't they developed in the US? Very easy, it's because the government's vote, be it democrats or republicans, are swayed by powerful bank lobbies.

So no, Dave Ramsey isn't the solution to the debt problem in the US. Don't look at yourself in the mirror as he suggests to blame yourself for your debt. Look instead at the decisions this government is making and why they're making it.

Sorry for the rant. This sincerely makes me so mad. So so mad.
posted by Riton at 2:41 PM on November 1, 2013 [11 favorites]


I also feel, as someone who has been trying to lobby to get it back into the version we use in my church, that it is worth mentioning that the original language of Matthew 6:12 in basically every version I've seen is "forgive us our debts, as we forgive our debtors".

To say that the Bible as written is in any fashion in favor of keeping people in endless debt slavery to one another, Old Testament or New, is such a gross misreading I have been tempted to ask people claiming it if this happens to have become Opposite Day or something.
posted by Sequence at 3:22 PM on November 1, 2013 [4 favorites]


2) He completely misses the societal forces making it harder and harder to get ahead. "Work harder" is shallow advice when you are 21 and the only jobs you can get are Subway sandwich artist or an unpaid internship.

As much as I can't stand the "Rich Dad Poor Dad" guy, paging through his book a long time ago the one good piece of advice I saw, besides standard financial common sense, was if you want to make money: go where the money is. It isn't just working harder and liking what you do, but finding a place to work - like banking or energy or high tech or politics or whatever - that is swamped with cash. #1 would be banking I suspect, as that is where all the money essentially resides, and just being able to rub off off a fraction of a fraction of a percent of what's being tossed around is all that is needed.
posted by Golden Eternity at 3:28 PM on November 1, 2013 [3 favorites]



Considering the fact that healthcare debt is the most common reason for bankruptcy

here's the methodology for the study that produced that finding: the authors trawler through b'cy records, and anytime they found any medical debt, they put it in the "medical debt bankruptcy" category.
posted by jpe at 3:59 PM on November 1, 2013 [1 favorite]


People saying that Dave Ramsey is about taking money from poor people, you can get the Total Money Makeover book for 9$ on kindle, or rent if for free from your library. I bought the hard cover because I wanted to have it available to read it when I needed help. Dave Ramsey is how I got interested in turning my finances around years ago, he explained things easily, and I got some early wins that made it all very satisfying for me. (Things like a 700$ sears card bill etc). My snowball grew and I felt like I was really GETTING somewhere. I ended up clearing 30k of debt. Some things didn't work for me, a cash based budget, I use debit cards, but I still stayed within my budget. I also budgetted per month and not per week, and I used a software that goes well with Dave Ramsey's plan (You Need a Budget). Anyways, I may not be able to listen to his radio show for very long (he does have obvious political leanings etc) but I am grateful that he got me interested in reducing debt instead of living in a cycle of payday loans and paying the minimums on all my cards.
posted by Hazelsmrf at 4:39 PM on November 1, 2013 [1 favorite]


"here's the methodology for the study that produced that finding: the authors trawler through b'cy records, and anytime they found any medical debt, they put it in the "medical debt bankruptcy" category."

Do you have a cite on that?
posted by klangklangston at 5:33 PM on November 1, 2013 [1 favorite]


I wouldn't say it's wrong for him to make money selling his advice. But I would take the advice for what it is. Financial matters shouldn't be invested with all this moralism. Adding the religious dimension to his financial service product is what seems dodgy to me. The real message--the practical advice--is not religious or even spiritual in nature. Dressing it falsely in religious clothing as a sales pitch just doesn't sit right with me. But Ramsey is probably sincere about what he believes, even if I don't agree with it.
posted by saulgoodman at 7:51 PM on November 1, 2013


(Which is not to say financial decisions can't have a moral dimension, just that the morality in this case is not strictly speaking Christian and shouldn't be billed as such.)
posted by saulgoodman at 7:54 PM on November 1, 2013


Just so that everyone is clear about the investment-side of Ramsey's business:
...another source of revenue is Ramsey’s network of “endorsed local providers,” who offer investment advice. These are the professionals who Ramsey has claimed over the years can help people realize 12 percent average annual returns in the markets, leading to more than a $1 million portfolio by retirement
What is the cost for such "high performance" service?
...you’ll be steered into wildly inappropriate funds which carry up-front fees of somewhere north of 5%.
posted by Hypnotic Chick at 9:25 PM on November 1, 2013 [6 favorites]


I'm always amazed at how much Christians like Ramsey tend to favor the Old Testament for quotes. I guess Jesus wasn't angry enough for them.
posted by tommasz at 6:42 AM on November 2, 2013 [1 favorite]


I guess Jesus wasn't angry enough for them.

The thing is...he was, especially when it came to people oppressing the poor. He straight up says that rich people need to give all of their money away to the poor to be saved (not "donate to charity," not "set up a foundation after you die," but "Sell everything you have and give to the poor").

That's why it's pretty easy to criticize this guy from the perspective of his own religion. Guy just bought himself a five million dollar house.
posted by infinitywaltz at 8:45 PM on November 2, 2013 [1 favorite]


It took me a minute to realize that Dave Ramsey is not Jim Cramer; that was confusing. I agree with staying out of debt, paying down debt, being frugal, living within your means. My parents grew up in the Depression, and frugality was a way of life. The current US economic system is based on consumerism. The health of the economy is tied to whether or not Christmas sales are better than last year, how much a given movie grossed, on spending growth. It helps to reduce tv watching; it's not just the ads, it's the idea that everybody gets to live in a nice house, drive a nice new Ford(product placement), use a nice new Mac(product placement), have perfect hair, and never wear the same outfit more than once. On tv, a car repair doesn't screw up your finances for the next 2 months, at least not since Roseanne.

In the US, at least, I'm not sure what we need is more 'hard work.' We are, as a nation, quite wealthy. I think we should work less, buy less crap, have more holidays, spend more money and time on education, and less time consuming goods. I was raised on the value of hard work, but our consumerism has given us global climate change and some other troubles, and I'm pretty sure there's a better, smarter way.

Using Christianity to sell a product, even a worthy product, is cheesy. Using Christianity to amass a vast fortune is sleazy and doesn't jibe with the Christian bible I was taught as a kid, maybe unless you use the wealth to feed the hungry, house the homeless, comfort the afflicted, etc. If it's working for some people, that's great. But for anybody who wonders why the article takes a tone, the exploitation of the teachings of Jesus is a clue.
posted by theora55 at 8:58 PM on November 2, 2013 [1 favorite]


Helaine Olen doesn’t really “get” Dave Ramsey as a phenomenon. Megan McArdle wrote a very good piece here that is a corrective to Olen’s.
posted by hush at 11:05 AM on November 4, 2013


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