Are you a Ramsey fan or critic?
Dave Ramsey seems to attract quite a few critics these days. I have heard him being criticized for everything from being over-simplified to allowing people to use debit cards to buy his products.
It is interesting to me how some people can find anything to criticize. Some people see the world with rose-colored glasses and think everything is perfect and others will never be happy with anything and therefore criticize everything. Most people are somewhere in between. But I guess after it is all said and done, we are all critics in one way or another.
Personally, I like Dave Ramsey. I think he has an excellent program that helps a LOT of people. It is a very basic and simple way of doing things, but it works for most people. I assume that is why he designed it that way. He wanted to help as many people as possible, knowing that he couldn’t please them all.
Experts are often the critics of simple tools and systems. Most times these experts are more advanced than the product they are criticizing and most of the time what they are criticizing was not intended to be used by them.
The iPod and Dave Ramsey
Let’s take Apple as an example. There were dozens of MP3 players on the market before the iPod came out. Apple just took the existing technology and made it so simple and easy to operate that your grandma could use it. They did not seek to satisfy the “techies” who were already using MP3 players. They were going after a market that wouldn’t have bought one unless it was simple.
Dave Ramsey is like the iPod of the financial gurus. While so many of the other financial guys are arguing and debating about trivial issues that are over most people’s heads, Dave was figuring out a way to boil all these financial principles down to a 5th grade level. He succeeded.
Dave’s books and seminars are designed for beginners and not for the people who have mastery over their finances. It is not perfect advice for everyone, but it is great advice for most people and is exactly what millions of people need.
Everyone is a critic
That said, just like all the other Dave Ramsey critics, I don’t agree with everything he preaches, but I think I understand why he says what he says.
- I haven’t cut up all of my credit cards, but if I were trying to help someone who didn’t have much financial discipline, I would probably suggest cutting them up.
- Mathematically, paying off the highest interest rate credit cards first would be a better idea. But, I understand the necessity for motivators on the journey to financial freedom. This is why Dave suggests paying off the smallest balances first, regardless of the interest rate. Getting a quick success under your belt is a much needed motivator for most people.
- I chose to save for retirement WHILE paying off my debt. Dave would suggest not saving for retirement until the debt is paid off. I know that I am not going to quit on the way towards my goal, but for some people knocking out the debt first is probably a good idea.
Although I do some things differently than Dave suggests, I understand why he is doing what he is doing. I am not his target market. Knowing this, I want to help him reach those people who he can help. So, I will just keep applauding him as he ignores the critics and keeps helping people break out of debt.
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I’m not a critic of the Dave Ramsey plan. I’m certain that it’s one among many plans that can be successful. My main issue is just that though. It’s one among many. I get annoyed by people that claim that Dave’s way is the only way.
I’m also not a fan of his overt use of religion to colour his advice. It’s just so American, and so quite alien to me, a Brit.
@Plonkee
I agree that Dave’s way is not the only “way” – as it is said, there are many ways to skin a cat – I think the same can be said about managing your finances…
and regarding your 2nd comment – He is a Christian and he believes the Bible, therefore he uses scriptures to back up what he is saying. If anything I think it is a sign of humility, because he is basically saying “look, I didn’t come up with this on my own – it has been in the Bible for centuries”
I’ve never watched one of Dave Ramsey’s programs: Why? He’s on Fox. I consider them an evil empire and won’t watch them unless it’s dire circumstances.
How dire? Last time I watched Fox news it was because one of their correspondents was embedded with my brother’s USMC unit during the start of the Iraq war.
I have a nitpick with Dave Ramsey.
While you can argue an issue like whether you should tackle debt starting with the lowest balance or the highest interest rate, I see that as a matter of personal preference: while one person might prefer the prychological boost of paying off small debts quickly, another might prefer the faster reduction of total debt by paying off the highest-interest debt first.
But when he proposes his budget, that budget doesn’t work for a lot of people. He allocates 38 percent of income for housing, and I haven’t found ANYTHING in my area that you can rent for 38 percent of my income.
@bob:
I’m not saying that there’s anything wrong with Ramsey appealing to scripture, it’s just not aimed at me, and it feels very American. There’s nothing wrong with being American either, I happen to be British and I prefer personal finance advice to be more British in style.
If it works for other people, that’s good for them. As we all know, Dave’s way isn’t the only way.
I am a former employee of Dave Ramsey.
1. Dave does NOT accept credit cards for products, period!
2. Dave uses Scripture in two ways. First, in a spiritual way because
money and finances are all about choices, choices in life are spritual decisions. Second, Dave uses Scripture as a “Time Tested” princples. What other book has 6 thousand years worth of wisdom to share about money?
@Rick
Just FYI, I am with you – If you couldn’t tell from the post I am quite a fan of Dave Ramsey!!
but regarding your first point – the reason he has been criticized about accepting credit cards is because technically he does accept them. As mentioned on his website he does accept debit cards and as he states he has no way of knowing whether or not they are credit or debit cards when they process them. He is very adamant about people NOT using credit cards to buy his products, but like I mentioned technically no one would ever know…
Personally, I understand Dave’s position on the issue and don’t blame him for accepting debit cards, but some critics have said that he is a hypocrite for it -
Acually Bob, by sending a query to Visa/Masercard before the card is charged can return the balance on the account. A positive balance indicates either a checking account, debit card, or loaded credit card (a credit card that was over-paid-off).
@Ryan
so, just to clarify – you are saying that Dave’s company could check to verify that it was a debit card?
yes
I hate to tell you, but if you cannot find a place based on 38% of your income. The issue is not Dave’s suggestions, its your income. You need to do something to raise the amount of money that you take in per month.
You want to pay rent that is 38% of your income? I pay less than 13% of my income on my mortgage payment.
His main tenet is to get out of debt…this is not an American, Lithuanian or British or Korean thing…It’s just the best way to win with money. Get out of debt.
Actually Dave Ramsey DOES accept credit cards via his website.
If you look under his FAQ, he admits that he is required to accept credit cards, or he is in violation of Visa/Mastercard policies and will not be allowed to even accept debit cards.
You need to do research people.
Yeah you can get away with using a credit card on his website, but read the disclaimer, they are beyond clear in their opinion of you doing it:
“* The Lampo Group, Inc. and Dave Ramsey recognize that the Visa and MasterCard virtual monopoly on the debit card industries prohibits merchants from only taking debit cards. As such, it is impossible for us to ensure that every order has complied with our debit card policy. We trust that all of our customers hold EXCEEDINGLY high levels of INTEGRITY and maintain EXTRAORDINARILY high standards of TRUTH and HONESTY. Basically, anyone ordering from us who does not follow this policy is a shady and dishonest character. Don’t put yourself in this group. You’re better than that. Stick to our policy, NO CREDIT CARDS, and make us all happy. “
Dave i like your show but can i say one thing that my wife and i dont care to hear.You once in a while rant and rave as a true republican and how our government is lousy,you are entited to say what you want on your own show but many of us arent republicans or any party,why do we have to hear this ,i though you show was to help people of all races religions and partys of the USA,IF you rant and rave as a die-hard republican we have no way to rebut but shut off radio.Do you thing it is proper to mention Obama and his 8 weeks in office,whne i never heard you say a word about any Bush president and geo w Bush signed everything he was put on his desk,I dont wnat to stop listening i love as you help people but as a christian not as a die hard republican .You metioned the market often and tel us to hold in ,its great,but i guees i know you will tell me dont listen if i donnt like all of show but as a christian too, i think you point is to help people on the air ,not preach the republican bible ok ,god bless,jim in texas email if you care too i doubt it .Gor w Bush left us with 1.3 trillion and all republicans blae Obama after 7 weeks od hard work,we all should respect who was elected,he won by 9 million vote ok? again Dave,god bless you and your family i am like you a good family man
You need to move then….
These PF gurus such as Dave can be likened to diets/excercise gurus. Eat less, excercise more and you are going to be healthier. Most PF gurus are saying spend less, earn more; live with your means, etc.
I’m a CPA with a minor in economics and we have been following Dave’s plan religiously. Next month we will have a fully funded emergency fund and then back to retirement and college savings.
My 2 cents worth, if you are going to go on a “diet” follow that experts advice. Choose a guru that has proven success. However, for those personalities that hate to follow instructions you will still benefit by following most advice out there.