You have obviously never listened to the show. It's frightening how many people make bad financial decisions on all income levels. Our education system is to blame here, we should teach personal finance in high school. Not knowing how making bad credit decisions early in life can set you up for long term failure.
Complete conjecture on your part. He helps many people on the show who are poverty level and has great compassion for them, to a point. Again, if you listened to the show you would see how most of humans are wired to spend, spend, spend. Marketing and human nature work, for the corporations, we are wired to spend more, more, more. On the show people call in with $40K salaries and ask how they can afford to pay off credit cards, afford their rent, afford daycare, or electricity. He goes through their expenses, and more often than not there is room to cut and help them breath. You'd be surprised that most of us do have some item we overspent on because we had to have it, a new car, home, boat, credit cards. Dave sniffs those out and helps people see how that is keeping them from affording life, without credit burden. Sometimes it is a matter of fact problem that someone may need another source of income, another job or side hustle.
The point is you shouldn't buy a home or car on credit that you can't afford. If you need to rent a home or even a room, that's A OK. If you need to buy a relatively affordable car on credit, that's OK too, but he just believes most people could make due with a cash car. There are many cars in the $5-10K range that run great. Many on this message board have commuted on motorcycles that cost less. My first bike was $2500 and I rode it rain or shine to work and school. There is also public transit or ride share.
No one "needs" a $40K car or a $750K condo. There are other alternatives if financial freedom is a goal.
My High School did teach personal finance, actually. Though it's possible that my school was more the exception, not the rule.
Anyway, Dave Ramsey's teachings, per his website:
- Save $1000 as fast as you can. Having a rainy day fund is not exactly a novel concept. This isn't bad advice, but it's not exactly unique. It's also something that varies wildly in how difficult it can be based on someone's income. Someone making under 30k a year may never be able to even get to the next thing no matter how hard they try. Just advocating that people should get 2, 3, 4 jobs (which you said he does) is a reductive way to blame poor people for systemic problems in our economy
- Pay Off All Debt (Except the House) Using the Debt Snowball.
So, his (not actually his idea) debt snowball method is at best debated by personal finance experts. Paying off the smallest debt first doesn't really make sense if the smaller debts are stable and low interest, while you have a larger debt that is very high interest. Also, the implicit assumption that most people can afford a mortgage on a house, 35% of the population rents. That does give a hint about the target market here.
- Save 3–6 Months of Expenses in a Fully Funded Emergency Fund
See the first comment again, but additionally, depending on what 3-6 months of expenses looks like, this could mean 10-20k or even more sitting in simple savings instead of investing it. Most families can't or at least shouldn't, horde that much money without at least putting most of it in a safe investment portfolio.
- Invest 15% of Your Household Income in Retirement
This is again very basic advice, though honestly I think 15% is low.
- Save for Your Children’s College Fund
Again, very basic advice. Though, presuming people will have children. One problem you get by ignoring societal economic trends is ignoring that the rate of people getting married and having children is going down pretty rapidly. Likely because both can be very expensive and people are trying to live within their means.
- Pay Off Your Home Early
This is dumb advice. It feels good to pay off the home, sure, and I 100% think people should refinance to a mortgage that gives them the lowest interest rate possible, which generally are also shorter term (15 year rates can be 2% lower in interest than 30 year rates), however, especially if you have an interest rate that is around or below inflation, You would be better off financially to keep the mortgage and invest the funds you would otherwise use to pay it off for long term growth.
Other issues, he seems to be of the mindset that if you can't pay for your education in cash, you just shouldn't go to college. Even acknowledging that student loans are predatory, college is still by far one of the best ways to guarantee financial comfort in life.
So, even ignoring the fact that thanks purely to his families wealth and connections, Dave Ramsey never really faced financial hardship in his life, even when he went bankrupt due to his own bad decisions with real estate. Ignoring the fact that he fires people for having premarital sex. Ignoring that he spent the last year downplaying or denying COVID. Ignoring that he acted contemptuous towards people who were helped by the stimulus payments. Ignoring all of that, his advice is still very reductive, basic, and sometimes actually bad for people.
IMO, the first expense people should cut out of their budgets to free themselves of debt is the $40 he charges to go to one of his dumb events, or the $130 he charges for his fake university course tape, or however much people spend on his books.
