I discuss the many shortcomings of the Dave Ramsey approach to personal finance, and show better ways to help more people.
I’ve mentioned Dave Ramsey numerous times over the years. I’m not here to bash Dave, at least not without provocation. I recognize his methods have helped millions of people.
However, I believe that the work that I do with my clients is superior in many ways, and by this I mean, more positive, inclusive, sustainable, realistic, and successful.
Last week, I attended the annual AFCPE Symposium, my first time attending this particular money conference. (I have a suspicion that it’s going to replace my yearly attendance at FinCon. It’s just a little more professional-focused and less shilly.)
During a meeting, a stray comment I made about Dave Ramsey led to me organizing an impromptu meeting called the “Dave Ramsey support group“.
That I got over 50 people to attend on almost no notice reminded me that there is a whole community out there for whom Dave Ramsey and his methods don’t resonate.
Here’s a brief rundown on why that might be.
Table of Contents
I recognize that one size does not fit all.
Dave has his 7 Baby Steps. I’ve reviewed them extensively. There are a lot of good ideas in there.
But people are not machines, and humans have complex needs. If it were as simple as saying “go do this”, we could fit all personal finance rules on an index card and I’d be out of a job.
I believe that people walk different paths that can all lead to financial wellness.
While I spend a lot of time trying to convince people to not put everyday spending on a credit card, if you decide you’re not ready to change that, I will work with you and develop the best possible plan I can around that context. You have your reasons for not being open to change, and I can respect that.
Also, perhaps your personal risk tolerance requires you to have more or less than the six months of spending in an emergency fund that I suggest: that’s okay. I will work with you where you are.
I am not so dogmatic and tied to my best practices that I can’t see past them. Your financial success isn’t about me; it’s about you.
I will never call you stupid
I am not perfect. I have made mistakes in my life. I have expressed anger when it wasn’t helpful. I have done the wrong thing at times.
But I will never, ever, ever, call anything you do, past, present, or future, “stupid”.
Meanwhile, it’s not hard to find Dave Ramsey calling people stupid. In fact, here’s a Google search with many results.
You see, Dave comes from the “tough love” school of relating (I’m being charitable here). It’s the idea that people respond more to negative reinforcement than positive reinforcement (what I’ve called the alarm versus the weighted blanket).
But let me ask you: if you came to me talking about some of your financial decisions, and I called you stupid, how would that help you? Would that help to increase your level of vulnerability with me, and your willingness to dig deep to understand your money behaviors?
I think not. You’d feel ashamed, and if you did anything similar again, you’d probably not want to share it with me.
(Someone once said to me that “Dave Ramsey isn’t trauma-informed”, which might be the understatement of the century.)
But you may have unexamined reasons for doing what you do. My job is to help you understand your behavior, to make the unconscious conscious, so that you can make the best possible decisions moving forward. That requires me to earn your trust and your vulnerability.
This isn’t boot camp, this is financial wellness.
I work with polyamorous, LGBTQ+, atheist, and other marginalized groups
Have you ever heard a gay couple do a “debt-free scream” on Dave Ramsey’s show? I doubt it.
I’ve talked about my first-hand experience on how a Dave Ramsey leader ranted about “the gay agenda” and how he’d make sure that a gay couple were charged double for financial coaching.
It should go without saying that this is not a part of my practice.
Meanwhile, much love to my polyamorous community. Poly folks have very specific needs that are different from our standard dyad relationship assumptions.
If you’re poly and you’re going to work with a financial professional, you probably want to work with one who knows what the word “metamour” means. (Also, “NRE”, “triad”, “relationship anarchy”, and all the rest.)
I’ve worked with poly folks from the very beginning, even using the moniker “Poly Financial Coach” at one point in my professional journey.
By contrast, Dave Ramsey is an evangelical Christian. You play by his narrow rules of cultural acceptability, or there is no room for you.
Which is too bad for Dave, because there are more people who don’t fit his mold than who do.
I believe that there are systemic reasons for poverty
My belief is much more nuanced. On one hand, I believe that every one of us—yes, everyone—has the ability to improve their financial situation.
But to say that “anyone can be wealthy” is to ignore systemic injustices in our society.
Let’s list some, shall we?
- Homeownership in Black and Latino populations are significantly lower than in white populations. That isn’t because of laziness, it was an intentional policy. And this has led to a generational wealth transfer gap that persists to this day.
- Those with mental health challenges are much more likely to struggle with poverty. If you don’t struggle with mental health, congratulations, but you don’t get to take credit for your brain chemicals.
- The same can be said for medical conditions. Given our horrendous death-loving healthcare system, just try to convince me that someone who goes through a massive medical crisis and is given a bill for $800,000 has the exact same ability to become wealthy as a healthy person.
Meanwhile, the Dave Ramsey team showcases a survivorship bias, and confuses correlation with causation.
Many people have had success with the Dave Ramsey plan, and those people are showcased on his show. But what about everyone else? Does that mean that everyone else didn’t follow the plan? Or did some people follow the plan and it didn’t work for them?
Also, his team’s book Everyday Millionaires posits that most people who become millionaires are just regular folks and didn’t inherit wealth. But does that mean they had no structural advantage? And what about all the other people with the same level of privilege but didn’t become millionaires? The book is silent.
It’s disingenuous to say that everyone has the exact same chances. Some people are just going to have to work harder than others. And while Dave doesn’t acknowledge that, I will, and work with you to push past your limitations.
I’m not being sued for firing a woman who got pregnant outside of marriage
This one is kind of a cheap shot, but it needs to be said.
Dave is currently under investigation for having fired a woman for having premarital sex.
That’s odious enough, but it comes on the heals of other allegations that one of his star performers had been accused of infidelity years before by his own wife, but was still working at the company years later.
Does that sound “biblical” to you? “You have sinned, my dear, and must be cast aside. But you, my man, make me money, so as God as my witness, you can stay.”
God damn, dude.
I could go on. His COVID-denying talk and his company’s violations of the law surrounding pandemic public health restrictions make him seem like he’s leading nothing less than a death cult.
But Dave will never change. He is too sure of himself, too stubborn, and frankly, too rich to care. He has his hook of using Christianity to sell financial success, and good on him.
Now, for the rest of you, those who live non-traditional lives, who don’t fit into his narrow mold of what is acceptable, it’s time we get together. We’ve got money to manage and financial success to build.
Join me in my own Dave Ramsey support group. I’m not only the president, but I’m also a client.