With oil prices hitting record highs and food prices not far behind, a headline-grabbing credit crisis, a weak dollar, bank failures and cascading home mortgage defaults and foreclosures, here’s the word from Dave Ramsey: Don’t panic.
Ramsey is an East Tennessee native (born in Maryville) who’s gone national with his plain-spoken and self-described “biblically based” financial advice, dispensed through seminars, books, video series and radio shows. Many people and institutions are in serious trouble, Ramsey says, but the sky isn’t falling. If people keep their wits and their discipline, they should be OK.
“There are pockets of the country that are really, really bad,” said Beth Tallent, a spokesperson for the Lampo Group, Ramsey’s Nashville-based organization. “But the situation isn’t as dramatic as the media make it out to be. Not everybody’s bank is going to fail.”
Ramsey’s advice for coping with high fuel prices comes down to “just good money management,” Tallent said this week. “You’ve got to do your budget so you know where your money goes. You will need to cut back on things you want so you can cover the things you need.”
A lot of Americans will take his words to heart. Ramsey, 47, oversees a multi-faceted and fast-growing financial advice service he started in 1988. That includes “The Dave Ramsey Show,” a daily three-hour call-in radio program on more than 350 stations, drawing about 3.5 million listeners a week.
Books with titles like “Your Total Money Makeover” and “Financial Peace” have climbed best-seller lists, and he takes his financial advice on the road throughout the country.
One of his cornerstone programs is Financial Peace University, a 13-week video workshop that has walked 650,000 people through his “baby steps” to financial security.
The secrets of his success: Get out of debt. Cut up the credit cards. Save for a rainy day and for big purchases. Pay cash. Embrace budgeting.
He knows this advice isn’t new. He’s just figured out how to package old wisdom in an era of high expectations for stuff and low thresholds for credit.
“The advice I give is God’s and Grandma’s ways of handling money,” he wrote in an e-mail. “It’s what I learned when I hit bottom and started working my way back.”
The bottom he hit was personal bankruptcy in the 1980s: He made millions in real estate, but lost it when hundreds of thousands of dollars in consumer debt caught up with him and his family. Forced into strict financial discipline, he worked in real estate to pay off debts, and then decided to offer people the tools that worked for him.
“The number one mistake people make is that they wander through life like Gomer Pyle on Valium,” Ramsey said, “and they wake up at retirement and wonder where all their money is. You have to be proactive. Tell your money what to do instead of wondering where it went. That means doing the dreaded B word – a budget.”
This is a spiritual matter for Ramsey. He presents his material in a way that any atheist could use, but he’s not afraid to talk about his faith.
“There are more than 800 scriptures in the Bible that relate to money,” he wrote. “Obviously God thought it was an important topic to talk about.”
Even his critics applaud his emphasis on getting out of debt and living within a budget, but some say his advice is too simplistic or that he emphasizes wealth too much for someone who follows Jesus. Ramsey rejects that charge.
“Money is not the root of all evil,” he replied. “The love of money is. Having money and making money is not a sin.”
To be fair, Ramsey frequently talks about good stewardship and generosity. The goal, he preaches, is be wise and generous with the money “that belongs to God anyway.”
The recent financial turmoil hasn’t increased the number of calls coming to Ramsey’s organization, but the questions are changing, according to Tallent.
“We’re getting more questions about foreclosures and adjustable mortgages,” she said. “We’ve been asked a lot about banks, whether to invest in gold or other options.”
Tallent isn’t sure if callers ask more about spiritual issues in these difficult times.
“That’s something to ponder,” she said. “But the current economy is getting people to wake up, and that’s a good thing.”
First pubished in the Johnson City (Tenn.) Press, 19 July 2008.
