Writing about Dave Ramsey seems to bring a lot of attention to a blog, albeit usually negative attention if you don’t agree with him and his many followers. It is always easy to take jabs at a popular person within a field you are passionate about while sitting behind a laptop. I want to state upfront that being an armchair quarterback is not my intention with this series. My intention with part one of this series is to examine his teachings in light of what the Bible teaches about money. Part two will be about why I think some of the advice he gives is poor no matter if you are a Christian or not. The reason this blog exists is to challenge the Christian’s thinking about money. Part of that challenge is to hold up the teachings of those we view with high regard in light of Scripture. So with caution, let’s proceed.
Who is Dave Ramsey?
I didn’t want to include this in the post, but for anyone who might read this blog without any knowledge of Dave, I thought I should include it. Dave Ramsey is an extremely popular and successful personality who has made a name for himself within the personal finance sphere. Here are a few quotes to help you get to know him better:
“If you live like no one else, later you can live like no one else.”
“A budget is telling your money where to go instead of wondering where it went.”
“We buy things we don’t need with money we don’t have to impress people we don’t like.”
His primary audience is people who are heavily in debt and usually financially illiterate. Lucky for him, that is the majority of the population here in America. His main message is easy to understand and good ole’ fashion wisdom (this is my summary):
- Spend less money than you earn
- Have an emergency fund
- Paying interest isn’t wise
- Save for retirement
- Be generous
- Save for your child’s college
- Have a budget and stick to it
His official “Seven Baby Steps” are:
- $1,000 Emergency Fund - Before paying down any of your debt, set aside $1,000 as an emergency fund. Any kind of expense that can be planned for is not an emergency. Do not touch this money unless it is a true emergency!
- Pay off your debts using the Debt Snowball - Instead of paying off the highest interest rate debts first, Dave suggests you list them in order of smallest to largest and pay off the smallest first. Though he understands this isn’t the way to save the most in interest (it’s bad math), he contends that it is the psychological effect that helps people. Though I think some have the will-power to pay off the largest interest rate debts first, I think this is a wise move for much of America.
- Set aside 3 to 6 months of expenses in savings - After paying off all your debt, set aside 3 to 6 months worth of living expenses as an emergency fund.
- Invest 15% of household income for retirement - Dave suggests using a combination of ROTH IRAs, traditional IRAs, and 401(k)s for your retirement vehicles.
- Save for your children’s future college education - After making sure you are saving for your retirement first, he says to go ahead and save for your child’s education.
- Pay off your home - As long as you have followed the above 5 steps, go ahead and pay off your home early. He also advocates paying cash for a home, but is ok with people putting 20% down and taking out a 15 year mortgage.
- Build wealth and give - The details here are mainly left up to your imagination. At this point in the process, he advocates focusing on building wealth for you, building wealth to leave to your family, and building wealth to be generous towards others.
With a general idea about who Dave is and what he teaches, let’s look at the good, the bad, and the ugly…
What I Like About Dave
I appreciate the far reaching message Dave brings to help people get out of debt. Dave is probably more successful at changing behavior regarding debt than any other financial guru in this country. He has helped save countless marriages (as money is the #1 cause of divorce). I think he is very genuine in his desire to see people beat debt and live with purpose.
I also appreciate that his plan is easy to follow. Some would say this is a weak point. I would say this is helpful when looking at the nation as a whole. Many people need to be told what to do, and Dave does a good job at that! His businesses are so successful because people follow his advice. So he has done a great job of getting his message out in an easy to understand way that actually helps people pay off debt! I don’t think anyone would argue with that.
What Makes Me Scratch My Head
Focus on Wealth
If you’ve been through FPU or listened to his radio show, you would have to concede that Dave Ramsey spends a lot of time talking about getting rich and building wealth. I know he also talks about giving, but think about the overall message. Is the overall message “Live like no one else, so you can later give like no one else?” Or is the message more like “Live like no one else, so you can stock pile lots of money to buy cool stuff later on in life!”
You might say, “Oliver, you’re being too judgmental!” But please check your own heart while listening to or reading his material. When you hear stories about all the wealth people have gathered, is that what you desire? Or do you desire to get out of debt so you can give more generously? Are you seeking the Lord to see if you are placing your hope in the things of this world or in the life to come?
Of course, none of this would be a problem if he were just another Suzy Orman or David Bach. But Dave Ramsey has gone out of his way to be a part of the Christian community. It is not as if he throws in a “yes, I’m a Christian” every now and again. He reads the Bible on his show and talks openly about faith in his FPU program as well as many interviews I’ve watched or listened to.
Dave Ramsey has what I would call a type A personality. He is a natural salesman and go-getter. I don’t think there is a thing wrong with either of those qualities. But after listening to his talk show program for a while, I started noticing what I would consider to be arrogance. Many times people will call the show only to be called names like “idiot” or “stupid.” Sometimes he uses these names to poke fun at the caller’s husband, wife, friend, son, etc. He also seems to enjoy making fun of people’s financial mistakes. I understand that his brash personality is part of his brand, but you don’t have to be prideful and arrogant to get your point across.
Version of the Prosperity Gospel
Dave Ramsey is nowhere close to most of the crazy televangelists on TBN and the like. He doesn’t promise that God will give you money if you buy his stuff. He actually is quite clear that is will be hard to change your financial situation. I think that is great! Hard work seems to be lacking in America these days.
But that still doesn’t take away the underlying message. Even though the message isn’t “give me money and God will make you rich,” it is still along the lines of “follow my plan, work really hard, and you will be rich!” In other words, “if you don’t follow my plan and become rich, you’re a loser!” Obviously these are my interpretations, but I still think the general idea I’m putting forth is true. “God desires for you to be financially successful through hard work and smart decisions!”
Let’s Compare the Above Critiques to Scripture
“Come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have laid up treasure in the last days. Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts. You have lived on the earth in luxury and in self-indulgence. You have fattened your hearts in a day of slaughter. You have condemned and murdered the righteous person. He does not resist you.” James 5:1-6
“Remove far from me falsehood and lying; give me neither poverty nor riches; feed me with the food that is needful for me, lest I be full and deny you and say, “Who is the Lord?” or lest I be poor and steal and profane the name of my God.” Proverbs 30:8-9
“Do not toil to acquire wealth; be discerning enough to desist. When your eyes light on it, it is gone, for suddenly it sprouts wings, flying like an eagle toward heaven.” Proverbs 23:4-5
“Jesus said to him, “If you wish to be complete, go and sell your possessions and give to the poor, and you will have treasure in heaven; and come, follow Me.” But when the young man heard this statement, he went away grieving; for he was one who owned much property. And Jesus said to His disciples, “Truly I say to you, it is hard for a rich man to enter the kingdom of heaven. “Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.” When the disciples heard this, they were very astonished and said, “Then who can be saved?” And looking at them Jesus said to them, “With people this is impossible, but with God all things are possible.” Matthew 19:21-26
Wrapping It Up
Overall, I have no problem with most of what Dave Ramsey teaches. The majority of it is quite biblical. But I still can’t seem to escape the heavy emphasis on wealth and riches in his message. In fact, I think that is why most people get so excited about the program. We covet “stuff” and desire to have all this world has to offer.
There are really only three opinions you can take away after reading this post:
- No, Oliver, Dave Ramsey does not teach what you are claiming. You are dead wrong!
- Yes, Dave places a heavy emphasis on wealth, but that is compatible with what the Bible teaches.
- You are indeed correct. I need to examine my own heart in light of what Scripture says about money and wealth.
One final verse for you to consider:
“Do not store up for yourselves treasure on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal; for where your treasure is, there your heart will be also.” Matthew 6:19-21
I’d be interested to hear what you think!