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In an era of get-rich-quick social media entrepreneurs and schemers, one man has stood above the rest and appealed to the common person. This man’s name is Dave Ramsey and he is here to tell you you are stupid you bought that $50,000 truck with a household income of $40,000 per year. As a financial guru that has survived bankruptcy and helped thousands of people, Dave Ramsey is not for those that need coddling at every turn. His profound insistence on his financial “baby steps” and also utilizing the debt snowball method has helped to carve a very lucrative career in many spaces from radio shows to being a best-selling author. As a fairly new listener to Mr. Ramsey, his tools and methodologies have even helped me in my young business career.
Since Ramsey started broadcasting a radio show back in 1992, he has grown his financial following into the thousands and has pioneered a new way at looking at debt. His seven baby steps are:1. Save a $1,000 beginner emergency fund ,2. Get out of debt using the debt snowball, 3. Building a fully funded emergency fund, 4. Invest 15% of household income for retirement, 5. Save for children’s college,6. Pay off your home early, and 7. Build wealth and be generous. Indeed while this might be preposterous to some, it is solid financial advice that coupled with the debt snowball method (where debtors pay off their lowest balance debt first instead of paying off their highest interest rate debt first) can be surprisingly effective. While this approach has been criticized by some, research done by the Kellogg School of Management has found that the debt snowball method is generally effective, because it helps debtors become motivated by the small victories.
Since surviving bankruptcy back in 1988, Ramsey has espoused his values to thousands of viewers across the world. As a young adult in the professional world, his advice has always stuck out as practical and pragmatic. It is easy to keep up with “the Joneses” but sticking to your core fundamental financial values can help you dramatically in the long run. His direct and candid demeanor is a much-needed outlet for listeners that need to be told the honest truth and also for those that just need a guide in their journey. Sure he is not perfect by any means, but his methods to help curb debt and build financial freedom is a welcome voice for many.
Over the past year or so that I have listened to Mr. Ramsey, I have found numerous ways to shoring up my own spending habits. From using my credit card less and less to paying off my undergraduate student loans earlier this year (the biggest brag on this blog, I promise), Mr. Ramsey has made me more stoked about personal finances than ever before. His blunt straight talk about incurring as little debt as possible and always paying for things in cash, would make even the Cash Money Records crew blush. Also as a rabid Tennessee Vols fan, his talks relating to sports have a certain level of relatability around him as does his own personal story.
Indeed while I might not agree with everything Mr. Ramsey says, his policies have a certain level of candidness needed in this day and age. Plus who does not want to have your virtual finance “dad” yell at you or somewhere else when you do something stupid? If he doesn’t do it, there might not be any others who will. As always, drop me a comment below with your favorite finance story and how you have bounced back from it!
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