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Why Dave Ramsey is WRONG!

I love Dave Ramsey, he makes a lot of sense and helps a lot of people with getting out of debt and being smart with money.... But, he's wrong! 
Dave is the syndicated Radio Host of Financial Peace University.

He's wrong when it comes to credit and that's where I hold the line. You see, I am a credit expert and I don't condone over using credit or misusing it. However, we are a credit society and used correctly, credit can give you an advantage and help you increase your financial wisdom and success. So, let's chat about why Dave is wrong. 

Dave talks about cutting up your credit cards and using cash, "living on rice and beans, beans and rice". Suggesting that you lower your standard of living until all the bills are paid off and you can start saving for retirement. Well, there are several problems with this premise. 1 - the #1 cause for divorce is because of finances. 2 - everything you do is based on credit. 3 - Saving money in a bank account will lose you money because inflation is much higher than what you are making in the bank. 
OK, let's a moment about each. 

1 - The #1 cause for divorce is because of finances. Yes, i'ts true and I have had my share of stressful situations with my wife over finances. So also the converse is true. Being so hyper vigilant with controlling the debt that you don't have any fun or stress relief will also cause stressful situations and perhaps lead to a divorce. So, put the pressure on but set aside a small percentage of your income to take a vacation. It doesn't have to be much but when you both agree and use it for fun then the stress and the pressure is off for a moment and you can get back to putting the pressure on. I suggest going out on a regular Friday Night Date but spending no more than a few dollars.  Either to get to a free activity or for admission to something simple.  But... relax, this is time off from the pressure. Take a few months to gather funds to go to something together as a family, that's close, that doesn't cost a lot but let's you get away from the pressure of week after week of rice and beans, beans and rice.  You will find that you are refreshed, energetic, happy and ready to put the pressure on again for the next 3 months. 

2 - Everything you do is based on credit. If you plan on owning a home, then you better plan on building up your credit scores because you need a 640 to even be looked at with high interest rates included.  However, you will need a 740 to get the best interest rates and 760 to get the best insurance rates.  Both will cost you a ton of money if you don't have credit or lower than needed credit scores. 1% on a mortgage rate can cost thousands of dollars a year in extra interest. How can you build a savings if you are spending it needlessly because you have no credit. 
Dave, you have to have at least 1 Credit Card in good standing to build good credit so your listeners don't waste a ton of money on higher interest and insurance costs. Oh, and what about the cost of Lost Opportunities. You being a multi-millionaire does not represent what the average person has to face. 

3 - Saving money in a bank account will lose your money because inflation is much higher than what you are making in the bank. 
Have you heard how the government is changing the way inflation is figured?  So helpful... sheesh.  20 years ago inflation was calculated so it reflected what is real, now they "fix it, massage it and convert it" into something that doesn't look like inflation. However, have you noticed how prices are rising very fast all around you and yet, we only have 1-3% inflation every year. It doesn't make sense and it's costing you money. Just putting it into the bank isn't enough. You need a guaranteed interest rate, dividends and compounding interest with a tax savings that keep you from losing your hard earned money.  Check out this site to see a better program that does double duty with your money. If you can have your money work for you a number of ways, safe, secure and sound, then it just makes more sense.  Check out this website for an explanation of The Family Banking Concept and see for yourself why this works better than Stocks, better than Bonds, better than Qualified Retirement Programs and can create a Legacy for the future of your children and grandchildren, beating inflation at its own game. 

Conclusion - think it through. If it doesn't make sense then ask the hard questions and get the right answers that will save your sanity, save your money and save your future financially. 

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