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I like his show and the advice he gives is usually solid. I think that most people would benefit from getting their debt paid off, having a paid off house and a little money in the bank.
He has some good, basic advice regarding becoming debt-free, from the typical consumer vantage point. Outside of that, I wouldn't trust him on more sophisticated investment or financial advice.
I dated a woman who went through a bankruptcy while we were together back in 2015. It was eye-opening. She kept all her stuff. No one scolded her. She was in a better financial position, within months of discharge, after the bankruptcy, than trying to keep her head above water before.
Bankruptcy can be a very useful tool in some situations. No one is saying that people like her don't need to learn better financial management skills along the way, but they need to use every tool available to them. It wasn't like she was going to qualify for a mortgage or favorable terms on any loan in the near-term before the bankruptcy, anyway.
I have listened to him. I think his advice on how to get out of debt works for people who either (1) aren't very knowledgeable financially and are incapable of learning or (2) have difficulty controlling their impulses and need simple black and white rules.
So Ramsey makes a lot of very good points about why being in debt is overall not good and give a process for getting out of debt that works. That is all good. Where it breaks down for people is the black and white nature of his rules. I've listened to his show. I've heard him go into contortions about why people who work for an employer can't use a credit card for work trips or expenditures that will be reimbursed. He allows no exceptions and would have people quit their job over it. Or the person who is not in debt and who uses a credit card and pays it off in full every month. He doesn't think anyone can be trusted to do it.
He treats a credit card as if it was a drink for an alcoholic. And, you know, it might be for some people. But most of us recognize that while some people maybe are better off not ever taking a drink -- most of us can have a drink without issue. And, you know, most people can use a credit card and pay it off every month. And, when I was working and had to travel for work I didn't get fired for refusing to do it because I was required to use my personal credit card (which was reimbursed).
By the way -- while I do think his debt snowball and getting out of debt plan works (although I think it could work without the unnecessary excesses) Ramsey is flat out terrible once he gets into things like investing. And, I am not even going to get into how awful he is on other non-financial issues....
Note - I've read Total Money Makeover, I've listened to hours of his shows and basically do think a debt snowball is a good way to get out of debt for most people. I even mostly don't quibble about most of his baby steps. I think step 6 is optional for those who want to do it. I also wouldn't follow his advice on how to build wealth.
I have listened to him. I think his advice on how to get out of debt works for people who either (1) aren't very knowledgeable financially and are incapable of learning or (2) have difficulty controlling their impulses and need simple black and white rules.
So Ramsey makes a lot of very good points about why being in debt is overall not good and give a process for getting out of debt that works. That is all good. Where it breaks down for people is the black and white nature of his rules. I've listened to his show. I've heard him go into contortions about why people who work for an employer can't use a credit card for work trips or expenditures that will be reimbursed. He allows no exceptions and would have people quit their job over it. Or the person who is not in debt and who uses a credit card and pays it off in full every month. He doesn't think anyone can be trusted to do it.
He treats a credit card as if it was a drink for an alcoholic. And, you know, it might be for some people. But most of us recognize that while some people maybe are better off not ever taking a drink -- most of us can have a drink without issue. And, you know, most people can use a credit card and pay it off every month. And, when I was working and had to travel for work I didn't get fired for refusing to do it because I was required to use my personal credit card (which was reimbursed).
By the way -- while I do think his debt snowball and getting out of debt plan works (although I think it could work without the unnecessary excesses) Ramsey is flat out terrible once he gets into things like investing. And, I am not even going to get into how awful he is on other non-financial issues....
Note - I've read Total Money Makeover, I've listened to hours of his shows and basically do think a debt snowball is a good way to get out of debt for most people. I even mostly don't quibble about most of his baby steps. I think step 6 is optional for those who want to do it. I also wouldn't follow his advice on how to build wealth.
The issue I have is that Dave thinks most people can just cut or increase their income to solvency. There are some people out there who, for many varied reasons, are just not going to earn a high income. In this high inflationary environment, I don't know much budget cutting the average low income person can do.
The issue I have is that Dave thinks most people can just cut or increase their income to solvency. There are some people out there who, for many varied reasons, are just not going to earn a high income. In this high inflationary environment, I don't know much budget cutting the average low income person can do.
For many, his advice is unrealistic.
I don't disagree. Dave I think would say that the person who is low income should get a second job. That won't work for everyone and every situation. And, it doesn't deal with single parents and people with health issues, etc. who just can't do that.
Even so, a lot of his advice about how to reduce expenditures and prioritizing which debt to pay off will help a lot of people. It won't help everyone. And, I do think that bankruptcy is a perfectly viable option for some people. It shouldn't be casually done but it is an option that is in the mix.
While Dave's way doesn't work for everyone (notwithstanding what he may think) I do think that for some people it can be effective (but that is for a limited group of people).
I think his advice about having a budget and knowing where you spend your money is solid - regardless of how much or little you have. I also like his advice for setting up “sinking funds” or accrual accounts for things one knows they will eventually have to spend $ on but not every month. Things like home maintenance, car maintenance, etc. I also think his advice on having an emergency fund is solid.
People like Ramsey and Orman make me feel smart and dumb.
Smart because the stuff they're spewing comes across as "common sense" to me.
Dumb because I didn't get rich like them by spewing out the same stuff to the masses and making money from it.
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