Dave Ramsey. Everyone in the financial world has an opinion when his name comes up, one way or the other. People love him, or dislike him and his entire approach to finance. ME? What do I think? Aw, well I’m so glad you asked.
When Jessie and I decided to be more mindful of our money habits, our $147,000 in outstanding debt should have been an immediate area of focus, but paying off debt wasn’t on the top of our list of things to do. My attention got redirected to debt from listening to a podcast that explained interest compounding for OR against you, but we were focused on making money through buying assets. I don’t recall the exact podcast I was listening to, but the host explained that the stock market returned an average of 7%, which I did know.
What I failed to even consider was the fact that our student loans were working in the same fashion. They had a 7% interest rate as well, thus cancelling each other out.. DUUUHHHH?!
It immediately made sense to tackle the debt if we were getting the same return on investment.
Paying off debt with a 7% interest rate while simultaneously lowering our monthly expenses through debt payoff was the obvious choice.
We started researching debt payoff strategies, and Dave Ramsey’s name started popping up everywhere! We started to read his material and listen to his radio show. He has a great strategy in the debt snowball, good resources on his website, and a proven track record. He’s a religious man that isn’t afraid to say it, so why the heck not follow this guy?
He was obviously quite an authority in the anti-debt space, so we decided to read up on the 7 Baby Steps and decided we would start at step one. We saved $1,000 in a high-yield savings account as an emergency fund. We then went on to the next step of debt payoff because his message struck a chord with us.
Do I agree with or disagree with Dave Ramsey? It’s not like that for me. I’m not firmly standing on one side or the other. Like any other “expert” in any field, you aren’t going to agree with everything that person believes.
Here’s the truth, I agree with about 70% of Dave’s philosophies, and I think that’s a high enough percentage to say that he’s doing awesome things in the financial space. I agree with being (consumer) debt free, using the snowball debt payment method. I think the snowball is a great way to start paying down debt. We used it as our strategy for a short time. I agree with not financing cars, tracking your spending, and budgeting. Baby steps 1-3 are great.
What I don’t agree with is that he thinks all credit cards are sent to earth straight from the devil himself. This couldn’t be more wrong in my opinion. Credit cards are a great tool when used responsibly. I disagree with his stance on using leverage to make money. Again, any method of making money is going to come with risk. You have to learn to mitigate the risk, and you do that through education and good discipline. Baby Step 7 should happen even while someone is completing Baby Steps 1-6.
The point I’m trying to make is that everyone has something to offer. People that are foolishly dismissing Dave Ramsey based on his stance on leveraging or credit cards are overlooking some of the outstanding basics he’s put together to help people that are just starting to get their finances right. He’s the best at entry level financial knowledge. That’s the 70% I took away from his teachings. Get out from under bad debt. Yes…I believe in good and bad debt.
In a world where social media gives everyone a voice, people usually agree or disagree immediately and move on, or in some cases engage in incredibly poor behavior by attacking that person. We want to bring awareness to the fact that very few of us are exactly right or dead wrong all of the time. We all need to take the time to filter through and pick out the information we like, or that applies to our situations, and use it!!
I’m a podcast junkie that listens to multiple podcasts every day on my way to and from work. I used to look at the newest release of a particular podcast, and if I didn’t like the title or felt like it didn’t apply to me, I’d delete the show without listening. One day I was out of new podcast episodes except for one, and the title bored me to tears. So, I decided to listen anyway because I had nothing else to entertain me, and ended up taking away quite a few pieces of good information I could apply to my life. I would’ve missed that information on any other day. Now I never skip episodes because I know I can take away something.
So now you have my opinion on Dave, but more importantly, I hope you don’t immediately dismiss the people around you and their opinions. Be open, mindful and listen. I promise you won’t agree with everything, but I bet more times than not, you’ll LEARN SOMETHING than you can apply to your life and help move you towards whatever goals you have set for yourself.