No Financial Peace For Us
Have you heard of Dave Ramsey? Maybe the AM dial? Or at church? Perhaps a billboard? (“Act your wage!”) He has a lot of good advice and catchy slogans. He’s congenial and sounds like your folksy know it all uncle.
If you attend an evangelical church, you may be able to enroll in his FPU (Financial Peace University) for around $175, charged to your credit card, and watch videos and learn how to budget, and to get rid of that pesky credit card. The course will be led by Dave’s volunteers, provided in a room at the church’s expense, so we presume the $175 goes straight to his firm. You’ll learn that all consumer debt except your mortgage is really bad and must be eliminated. You’ll learn that credit cards are the reason why you’re broke, and that no one ever became a millionaire using his SkyMiles credit card. You’ll probably get the hard truth that you are an overspender (likely accurate) and that you need to reconsider your priorities.
After you “graduate,” perhaps you can use a Dave-approved real estate agent or mortgage lender or financial consultant—you would assume they are vetted, but they are really just like members of the BBB—allowed to exist as paid referrals.
We don’t care for the style or the huckster tactics. Why pay $175 to learn that you spend too much? The radio show celebrates getting out of student loans and consumer debt—which is very encouraging and we would tell you to do the same. If he doesn’t know the answer he reverts to solipsism—the belief that the world is based around him—and only tells you how it worked in his life, years ago, when he became a millionaire. Just recently he spoke at an evangelical mega-church with questionable theology and told the flock that giving $400 as a tip to the waitress that afternoon was more godly than sharing the gospel (https://reformationcharlotte.org/2022/03/22/preaching-at-elevation-dave-ramsey-says-leaving-waitress-400-tip-is-more-effective-than-the-gospel/?fbclid=IwAR0IkdncRUJpzMvLNxFnSzMId6Y2qh_46ju_CBvTE1vBDCgsH3_tuF8Jdio). To be fair, he seems to avoid prosperity theology, saying that you are poor because you don’t love God enough, or that you’re rich because you do.
We aren’t against using credit cards to pay for daily expenses, paying them off monthly, and getting miles or cash back, AFTER you have proven yourself a good steward of the money you make and followed a spending plan. There is no reason to be didactic about this—credit can be a dangerous tool or a way to reach your goals, or at least to get some air miles while you buy necessary groceries, gas, etc.
Most of his recommendations will work to improve your financial situation, no doubt. His in-your-face approach to spending is exactly what many people need. The issue for us becomes, what is next? After you have gotten out of debt, he wants us never to use credit, and to see his adviser and buy mutual funds, or invest in real estate (like rental homes) only with 100% down, no mortgages. That would be great, but you might be 60 before you’ve saved enough to buy your first rental home for cash!
What are your thoughts? This is just our initial rant about Dave, so feel free to give us fodder for more.
