After encountering hundreds of Dave Ramsey's followers, I have noticed a very common pattern.
They feel stuck financially, even though several had paid off all of their debt.
To begin, I want to explain that I believe Dave Ramsey has done a lot of good for people. I have had clients with horrible spending problems get great value from Dave by making some positive changes in their finances.
However, most people that listen to him are generally good savers and don't like debt in the first place. These are the people that often come to me after their Dave Ramsey education and say, "I did everything Ramsey teaches, but I feel like I'm not getting ahead financially."
There are several reasons for this, but I'll focus on one point - debt versus expenses.
If you've listened to Dave, you are never truly debt free until ALL debt is paid off. His followers will define debt-free as not owing money to anyone.
There's only one problem with this definition - You will ALWAYS owe money to someone!
You will need to pay taxes, pay for food, utilities, clothing, household items, hygene products (we hope), etc. If the requirement to be debt-free is universal, shouldn't we all focus all of our money paying people off for the rest of our lives? That means that I would prepay for my taxes, utilities, food, and so on to feel free.
Is that ever really possible, or even wise? If you equate owing money to someone as debt, then you will always be in it, and therefore NEVER be financially free!
In this scarcity perspective, any expense is bad. The problem with this thinking is that expenses never disappear. In fact, YOU are an expense to someone else. You are an expense, or "debt", according to these definitions, to a company. Should they just fire you so they don't owe you anything? How prosperous would that business be if they tried that? You and I both know that it would fail.
To be clear, I'm not advocating that you don't pay off certain loans more quickly than others. Many of you have heard my strategies for paying off debt based on cash flow rather than interest rates or balances.
What I am advocating is viewing money from a scarce perspective will only cause you to NEVER feel financially free, even when all of your loans are paid off because you always end up owing someone money. Furthermore, when you are told to put your money in risky mutual funds, you add even more uncertainty and LESS financial peace.
This perspective limits people's financial results and freedom for the rest of their lives, and why they often come to me for answers. When you focus on true financial principles of abundance, not scarcity, you find out that it is much easier to become financially free and have more money. When you don't fear debt or expenses any longer because you respect them and know how to be a good steward of your money, then possibilities, options, and freedom become a reality.
I know that this perspective is not "normal." As Dave's perspective has become "normal" for financial advice, more and more people see that it only gets them so far. They use their balance sheet to make themselves feel better, but money is still not a fun topic for them.
As a result, there are a bunch of people that hoard money instead of being a good steward of their money. They inhibit value from blessing others because they aren't exchanging it, and also wonder why they never feel they can save enough. They becoming broke emotionally and spiritually in that hoarding mindset.
I prefer that you don't become his "not normal", nor the normal American that's broke. The answer is in the middle. In fact, wouldn't we be better off by doing something different than what has already been done?