Let’s be real, I decided to write this newsletter because I thought the title was fitting for Halloween, not because I had the perfect topic to go along with it. Although, let’s also be real, I could pull almost any financial institution or figure out of a hat and explain how they are a wolf in sheep’s clothing. And hey, maybe I’ll actually turn this into a recurring series and write about someone different each time! 

Today, though, I want to just focus on one figure in the financial services world - Dave Ramsey. 

For those of you who don’t know, Dave Ramsey is a personal finance “guru” and evangelical Christian radio host who has been famous in both the finance industry and American Christian world for decades. 

Not that surprisingly, there are a lot of scandals now associated with him (see this Covid related one, this BS financial advice one, and this premarital sex one to get you started), which I’m not going to go into because the real journalists out there are absolutely doing a better job. 

What I want to talk about is his message. 

Dave Ramsey has built a career by teaching people how to get out of debt. And, I think he’s likely been incredibly helpful for a lot of people. The problem is that he also pushes messages that are harmful and offensive. 

His message is often extreme. He recommends cutting costs by eating rice and beans (like, only rice and beans). I know that being extreme is how you build buzz, which I’m sure was his goal, but it also can put people in a really scary situation. When you’re hearing that the only way to succeed is to cut expenses to the point of pain, that is what happens -- pain. 

Dave, on the other hand, is an incredibly wealthy man with an estimated net worth over $200 million. He is the son of real estate developers and has been in real estate and/or finance since the beginning of his career. He was a millionaire by age 26. 

He explains his financial story as a rags to riches story because after gaining incredible wealth he ended up declaring bankruptcy. His version of the story is very scary. I’m positive that it was really scary and stressful at the time. I’m also positive that the financial laws in place allowed him to succeed long term. 

Dave Ramsey declared bankruptcy as part of a business solution to a problem. His portfolio at the time was reported to be worth $4 million and his recalled debt was $1.2 million. He had high earning power and was, by all accounts, set up to land on his feet. It is not dissimilar to many other rich, white cis men of his generation declaring bankruptcy (i.e. Donald Trump, Larry King). It is dissimilar to the experiences of his audience. 

I’m not saying that he didn’t work hard, but I am saying that his experience is not the norm, nor is his experience relevant to his audience. He is an extremely wealthy, privileged, white cis man, telling a whole lot of financially vulnerable people what to do. He thinks that because he is rich he is better -- there is a moral judgment baked directly into his message:

If you follow my rules (which I never have had to) then you will shed your failings that got you where you are and you will be good (rich) like me. 

That is his core message. 

Being in debt or being poor is a moral failing. Being rich is a sign of moral success.   

Ramsey preys on his audience (he also claims to pray for his audience, but who knows). Folks who are in debt come to him and to his resources looking for relief and guidance. They are often scared and overwhelmed. They are in vulnerable situations and are looking for help. 

And then Dave sells them a system. He makes money off the vulnerable by selling “quick” solutions that, like most diets, are almost impossible to follow perfectly. That means that when a customer falls short of their goals the answer that Dave can give them is that they (the customer) didn’t follow all of the rules correctly. They failed because they couldn’t cut it, not because the system wasn’t realistic. He sets himself up to be infallible while still touting the righteous nature of his system. 

That isn’t how life works and it isn’t how money works. Our lives are inevitably full of unexpected expenses, changing priorities, and external realities. Some of us are born into systems that set us up for success and some of us are born into systems that set us up for failure. There are absolutely tools that we can use to improve our financial reality (heck, that’s why I have a job!), but ignoring the baked in realities and systemic failures of our financial system is foolish. 

So, if you’ve been hearing financial advice over the years from Dave Ramsey or anyone else that makes it feel like you’ve been doing something wrong and that’s why you haven’t reached your financial goals, I’d love for you to try to shed some of that guilt. If you want some help or support in shedding that guilt, reach out! I’d love to chat. 

As always, I’m rooting for you.

XOXO,