Dave Ramsey has created a successful career out of telling people what to do with their money. I’ve listened to his radio show several times, and I can see why he is so popular. He has a no-nonsense demeanor, and his moral universe seems to have few or no gray areas. You’re either right or wrong, smart or dumb. His personality is perfect for getting people motivated to get out of debt and build wealth. But the ultimate goal for Ramsey is not just to build wealth; it is to become generous and leave a legacy to one’s family and community.
The Total Money Makeover: Classic Edition is the fourth edition of Dave Ramsey’s most well-known book; the most recent update before this one was 2009. There are a few minor differences between this edition and the previous one, but they are largely the same. In it, Ramsey takes readers through his baby steps for getting out of debt and building wealth:
1. Save $1,000 fast
2. Pay off your debts in order from least to greatest (the “Debt Snowball”)
3. Finish an emergency fund of 3–6 months of expenses
4. Maximize your retirement investing (15% of household income)
5. Fund your kids’ college education
6. Pay off your home mortgage
7. Build wealth and give
Popular as he is, Ramsey has received criticism from various quarters (here, for example). This criticism ranges from his specific financial advice to the way he talks about poor people. While I think Ramsey could certainly be more nuanced than he is, I think the criticism of the latter misunderstands who Ramsey’s audience is and what he is trying to do. Ramsey is a motivator. He wants to get people fired up about getting out of debt. His comments about being poor are not intended to be nuanced, taking into account every reason why people might be poor. I think, for example, that he is wrong to generalize that poverty caused by injustice is not a first-world problem.
In his moral universe, poverty is something to be escaped. When he talks about poor people, he is not talking about the poor in spirit to whom belongs the kingdom of God. He is not primarily talking about people who are poor because they are oppressed by people with more power than them. He is talking about the kind of poor people—people who waste money on frivolous spending and servicing debt—that his primary audience doesn’t want to be anymore. His advice to that demographic has helped many of them escape debt and build wealth, and he is (rightly, I think) beloved by them. Ramsey is at his best when he is counseling people to resist a culture of overconsumption. He is at his worst when he makes generalizations about the causes of poverty—as are we all. Even the Bible doesn’t generalize about the causes of poverty. Compare, for example, Proverbs 13:23, which attributes poverty to injustice, with Proverbs 10:4, which attributes it to laziness. If even the Bible doesn’t make sweeping generalizations about the causes of poverty, we shouldn’t either. Ramsey should stick to what he does best, and his critics should recognize what he is trying to accomplish.
Note: Thanks to Thomas Nelson for providing a copy of this book in exchange for an honest review.
Elliot Ritzema 