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If you have dabbled around in the personal finance field for a bit, you have probably come across Dave Ramsey’s 7 step program and/or his daily radio show.

His approach is supposed to help people get out of debt, fix past financial mistakes and help them build a sound financial basis that will provide them with the resources they need to become financially stable.

It is clear that with the popularity he enjoys that many have benefitted from his approach. Yet, there might be a reason to take some of the components of his approach under closer inspection.

Below you can find my unpopular findings, including 5 reasons why Ramsey and his approach might not be as advantageous for some of us.

1. One Size Fits All Approach 

Ramsey has his 7 baby steps approach that he sticks to religiously. When someone does not agree with that approach, they get called a moron and it’s back to business as usual.

But what about those of us that do not fit into the category that this approach applies to?

What about those of us, who do not want to purchase a house or have children?

And what about those, whose debt is so big they cannot afford to create an emergency fund of $1000 as he advises?

Ramsey adheres greatly to traditionalism when it comes to societal expectations and what a person should do.

His entire approach is built around the consumerism that was extremely popular and the norm in the 1950’s: husband, wife, kids, house with white-picket fence and that mortgage to show off.

This is 2020. Millennials are challenged to find non-traditional ways to make a living. Without a bachelor’s degree most jobs are out of the question and post-secondary tuition prices have sky-rocketed in the last 20-25 years.

To put it simply, we can’t afford what once was the norm. So, why create a financial approach around those norms?

2. No Credit Cards

Ramsey dislikes credit cards and any type of debt, except mortgages, they are ok.

There is this stigma around credit cards that he subscribes to. Credit cards are evil. And yes, to some degree they can be extremely dangerous in the hands of those who do not know how to use them responsibly.

That is true with a lot of other things in our daily lives, like cars (some people really shouldn’t drive, period), alcohol, gambling, anything that can end in irresponsible behaviour. All of those things cost money as well.

Sadly, a credit score and history is needed in order to apply for a mortgage!

How are we supposed to show that we are capable of making payments to debt, if we cannot show it through our responsible use of a credit card?

How can we persuade a bank to loan us money to buy that house, which is part of his financial approach, if he forbids us the tools in order to do so?

3. Backwards Priorities

Not all of us want children or buy a house, yet in order to follow his advice, that is what takes priority. With the inflexibility of this approach there is not much play room for those that have other goals.

Let’s say you do have children. Borrowing money for your child’s education is an option, but getting a loan for your old age is not.

Realistically speaking, with tuition consistently rising to astronomical amounts, even if you start saving for a college fund at birth, it will never be enough to get them through 4 years of a post-secondary program.

There are options to consider when the possibility of your child attending university/college begins to become a probable reality.

Ramsey also advocates paying off credit card and other debt using the snowball technique, meaning the smallest debt is paid off first before tackling the big one (with the biggest amount owing and most likely with the highest interest rate).

Mathematically speaking, why would anybody do that? You would pay more money to the credit card companies as they keep charging you tear-inducing interest charges while you chip away at the small stuff. 

You are wasting your money.

Those small successes might give you a small motivational boost, but at what price?

Plus, his step number 7 instructs you to invest. Why wait so late? We are not getting any younger and if we have the means to start investing into our retirement early, why wouldn’t we do it?

4. Out of Touch with Reality

A quick search of all of Ramsey’s publications will tell you that most of his finance books are between 6 and 16 years old. 

That was quite some time ago. I know he has his daily radio show, but there are people who prefer reading to listening. Visual learners retain more information from seeing the written word then hearing it.

The financial advice in those books is clearly geared towards market trends of the time his books were written. The market fluctuates, changes can happen very quickly and flexibility and the acceptance of it are key to staying on top of your financial matters.

That’s what I am saying here: his advice is outdated.

For example, he instructs to have a 10-20% down payment for the purchase of a house with a 15-year fixed rate mortgage.

Ok, so we have some numbers to work with. Yes, a fixed-rate mortgage is good right now, because the rates are low and they are going up.

Everyone wants and would love to have a fixed-rate right now with a long term.

But with current house prices nobody can afford to make a 10-20% down payment on a house. It’s unrealistic, considering most houses in and around any big city are going for over 1 million, and that’s the low end of the price range.

So, unless you plan on moving far out into the country, this cannot apply to you.

Another thing I want to point out is the fact that he is extremely wealthy.

Having that weight of financial worry lifted off your shoulders puts one apart from the rest of the population that is trying very hard to make ends meet.

So, hearing financial advice that is so far out of the average person’s reach is discouraging and defeats the purpose of the given advice.

5. Rude Behaviour

On his daily radio show he is known to be a teacher, give financial advice and a guide out of debt, but if one is mostly remembered for acting rude, then that’s a problem.

He calls people who made financial mistakes or do not agree with him “morons” and “idiots”.

My common response to such behaviour is usually the question “Really? Was that really necessary?”

It appears he is partial to the tough love approach to teaching people. I get it. My kickboxing coach’s mantra is “no excuses”. 

And who can forget Will Smith’s inspirational approach “get up, dress up, show up”.

Yes, sometimes life sucks. Yes, sometimes we make mistakes. And yes, we need reality to let us know so. Sugar coating anything never got anyone very far.

But, what’s with the insults? What’s with the name calling? What’s with all the anger?

Time and time again we have seen that controversy, negativity and rudeness (among other things) sell quite well.

I just have to ask myself when enough is enough. He is in a position of authority and people genuinely need his help and ask for his guidance to learn how to fix what isn’t working for them. And he uses that as a sort of power trip. 

The hierarchy has already been established, so why beat those that are already down?

No one ever got poor or hurt by showing some manners and being polite.

Final Thoughts

The last thing I want to do with this article is to discredit, mock or attack Dave Ramsey and his approach.

My goal is to remind any reader to take financial advice, any financial advice from any one person with a grain of salt.

Take someone’s opinion on financial matters, do your own research and consider the logical application all you have learned to your individual financial situation.

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