Dave Ramsey, America’s most influential personal finance guru, drives a pickup truck that, he says, will eat your electric car. He wears a .45 on his hip with a hollow-point in the chamber. He is an older white male, a self-described “capitalist pig”, and an evangelical Christian who almost always votes conservative. He hates government intervention in his life – and yours.
His mortal enemy, however, is personal debt, and he has spent the last three decades on a crusade against modern usury, in the form of credit card companies (scum), payday lenders (the scum of the earth), and debt collectors (“some good people”, but largely “complete scum”).
Ramsey believes that as long as you have one red cent of debt – credit card debt, student loans, car payments, mortgages, medical bills – you can never be free. The day you take scissors to your credit cards is the beginning of your financial salvation.
Three hours a day, five times a week, 16 million people tune into the Dave Ramsey Show, Ramsey’s decades-running radio program, for his financial counsel. It is the third biggest talk radio program in the country, after only Rush Limbaugh’s and Sean Hannity’s. Unsurprisingly, his following includes a growing number of debt-burdened millennials.
Ramsey has been described as the “financial whisperer to Trump’s America”, an interlocutor for struggling people forgotten by coastal corridors of power. Critics argue that his worldview ignores the structural economic reasons so many Americans are in debt, such as higher education and healthcare costs, and encourages them to view indebtedness as a personal failing.
But if his fans are to be believed, Ramsey has saved their lives, helping them to pull themselves, bootstrap by bootstrap, out of indebtedness and poverty. His seven-step program is taught widely at churches, schools, corporations and military bases. His audience is likely to grow even further in future years. Americans currently owe more than $14tn in consumer debt. Of that, $372bn is at least 90 days late and considered seriously delinquent. The average American owes $6,194 in credit card debt, and Americans owe a collective $1.6tn in student loans.
As Ramsey sees it, America’s debt crisis is an epidemic akin to drug addiction, and its roots lie in individual behavior. The only way to escape its crushing weight is to stop enabling yourself and go cold turkey: live on rice and beans, get a second job, sell your money-sucking car. On Twitter, he dispenses tough-love commandments:
“If you’re working on paying off debt, the only time you should see the inside of a restaurant is if you’re working there.”
“If you come to work late and they are paying you, then you are stealing. Don’t steal and expect to get promoted.”
And God help you if you’re waiting for the government to rescue you. It won’t, he says – and shouldn’t.
Your debt is on you.
Ramsey, who recently celebrated his 60th birthday by skydiving, is short and bald, not unhandsome, with a trim beard closer to white than grey. He spends most mornings at his 47-acre corporate headquarters outside Nashville, managing his media empire, Ramsey Solutions, which employs 900 people. In the afternoon, shortly before his show goes live, he and some staffers gather for a prayer. Then he sits at his desk, waits for the phone to ring, and spends the next three hours as an air traffic controller for America’s collective financial anxiety.
On a recent Thursday, Roxanne in Tampa calls for advice on her situation. Ramsey is in a mellow mood today, which is good, because Roxanne’s question will turn out to be a whopper.
Roxanne is an assistant principal at a public school, and has “a lot” of student loans. She’s wondering whether she should aggressively pay her student debt, or hold off, because she’s heard of a federal program for public servants “where, if you pay for 10 years, you get the rest of your loans forgiven –”
“No, you don’t,” Ramsey cuts in. “It was a scam. Have you not read the articles? Ninety-five thousand people have applied for it, after their 10 years of service. Eighteen people have had their loans forgiven. Everyone else was denied.” (A recent Department of Education report says that more than 170,000 people have applied; 3,233 – or 1.89% – have been forgiven.)
Roxanne processes this information.
Ramsey asks: “How much debt have you got?”
“It’s about $200,000,” Roxanne says.
There’s a silence before Ramsey speaks. “Oh, my goodness.”
He asks her income.
“About $63,000.”
Even Ramsey seems at a loss. “That is a small shovel in a big hole,” he says in his Tennessee drawl. “Your return on investment – $200,000 invested to get a $63,000 job – was horrible.”
He adds: “I’m sorry for that. I’m glad you’re an assistant principal, and that people like you are serving. I’m very sorry that you’re that far in debt to get that kind of an income. It’s gonna take you a little while, kiddo. I would not be waiting on the government to do it. I’d just start chipping away at it, and figuring out what I can do to get my income up, and attack it as fast as you can. That’s distressing.”
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Ramsey’s “baby steps” for getting out of debt are intentionally idiot-proof: create a household budget (“give every dollar a job”); cut all non-essential expenses (“eat beans and rice, rice and beans”); set aside $1,000 as an emergency fund; and then throw every cent you can at your debt, including, if need be, by raiding your savings, taking on a second or third job, or forgoing retirement payments.
A crucial element is the willingness to be, as Ramsey likes to put it, “weird”. Your friends will think you’re eccentric because you never go out to dinner with them; a co-worker may wonder why you make more money but drive a worse car. You should relish this weirdness, he argues. You should take pride.
In more caffeinated moods, Ramsey likes to rail against naysayers. In one video with 2.5m views, he affects the sniveling tone of one of his critics.
“‘Well, Dave,’” says the imagined sniveler, “‘you don’t know about my situation. American day wages are stagnant.’
“You know where wages are stagnant?” Ramsey replies, his voice growing into a thunder. “On people who are stagnant. You’ve only got stagnant wages if you decide to stay there and keep getting those wages. This is not Russia, you can quit.
“‘I don’t like how much Walmart pays.’ ‘I don’t like how much McDonald’s pays.’ So don’t work there, stupid. Go work for somebody else.
“‘I don’t like how my company treats me.’ So leave. Go be somebody.
“You need to leave the cave, kill something and drag it home.”
Like all great motivational coaches, Ramsey has an origin story of tragedy and triumph, having lived through the misery of debt first-hand.
He grew up in Antioch, Tennessee. His father was a builder, his mother a realtor. They were enthusiasts for that most American of literary genres, self-help. According to the Nashville Scene, an alt-weekly newspaper, Ramsey’s parents often played tapes of motivational speakers as they drove to family vacations.
At 18, Ramsey had already passed the real estate exam. He sold real estate while attending university, and by the time he entered his mid-20s he had accumulated a $4m portfolio of property, which he financed with bank loans. He was, at least on paper, a millionaire. He bought a Jaguar.
But in 1986, when Ramsey was about 26, Congress overhauled the banking system. The bank he had been using was acquired by a larger one, which revoked his lines of credit and demanded he pay back his loans. He couldn’t sell property fast enough to settle his debts. He was foreclosed on, subject to several lawsuits and eventually declared bankruptcy.
Ramsey was left with no money, two small children and a wife whose trust in him was shattered. He stood under a scalding shower, he later said, and wept. He considered suicide. He started going to church more often. Even after declaring bankruptcy, it took six years to pay off half a million dollars he owed friends and the IRS. He did so, he has said, through real estate income and a newly intense frugality.
From the wilderness came a new man. He was just as ambitious and charismatic, but he had been humbled. Never again would he go into debt. Better, he would help other people avoid the same fate. God, he felt, had given him a calling. He began offering financial counseling at local churches. He self-published his first book, Financial Peace, printed a thousand copies, and drove around with them in his trunk. He gave away most for free.
A local radio station asked him if he’d like to do a show, and – well, you know the rest. Today Ramsey Solutions has an annual revenue of at least $125m.
As humiliating as Ramsey’s bankruptcy was, there is an obvious difference between what he experienced and what many of his listeners are going through, which may explain why he doesn’t dwell on it too closely.
The problem is that “the way Ramsey went broke is not too much like the way many of his callers do”, Susan Drury argued in 2007 in the Nashville Scene. “He didn’t lose his job, or have huge medical bills, or dig himself into credit card debt or gamble his money away. He was an overleveraged dealmaker, a hotshot who stretched himself too far and who got caught in a change of federal banking regulations.”
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Thomas Gokey, an activist who co-founded the organization Debt Collective, agrees with Ramsey that debt is out of control, but despises his worldview.
“Eighty-five per cent of what he is telling people to do is perfectly fine, sound financial advice,” Gokey told me. “What I object to is the ethical universe that frames it,” especially the assumption “that the way things are is the only way they can be, and that the way things are is moral and just”.
He dreams of starting a radio show like Ramsey’s, offering listeners similarly concrete options for navigating their financial problems, but which also “zooms out” to discuss how these problems are rooted in policy decisions. He also disagrees with Ramsey’s argument that federal student loans are the primary factor driving explosive college tuition, and thinks it has more to do with decades of state governments disinvesting in public education and shunting the cost on to students.
This lack of a more big-picture view doesn’t seem to bother most of Ramsey’s fans, however. The important thing is that he’s been there. He’s cried in the shower; he’s had his house foreclosed on; he’s had to tell his spouse that their assumptions about their future have been replaced by a rising floodwater of credit collector calls and tax liens.
He knows the dread, the shame. He knows the yearning to be redeemed.
In 2008, Erin Blanton was newly graduated from college and newly married. She and her husband, Jay, were looking forward to building their life together in their small city in Georgia. Then the Great Recession hit.
Both struggled to find permanent employment. Soon they were on food stamps and on the brink of homelessness. It seemed difficult for things to get worse, but they did.
Erin Blanton had a gallbladder problem. She couldn’t afford to see a doctor, so she put it off. Her poverty diet exacerbated the situation. By the time she entered a hospital, her liver had stopped working, she had pancreatitis and she weighed barely a hundred pounds.
Unbeknown to her doctors, Erin Blanton was also allergic to sedative. She woke up in the middle of surgery, and the doctors had to give her an intentional overdose of anesthesia. She came to 48 hours later, covered with bruises; she’d had temporary amnesia, and the bruises were from hysterically grappling with the doctors and nurses.
When she was discharged, 12 days after entering, she owed more than $60,000. Around the same time, her husband needed treatment for a benign colon tumor, adding more medical bills. Because they were considered indigent, the hospital ultimately forgave most of their debt. They were left with bills for about $3,000.
“At the time it could have been $300,000,” she told me.
Around 2013, when the Blantons were at their most desperate, a friend gave Erin Blanton some Dave Ramsey CDs. She found the advice on the CDs motivating, simple and, most importantly, achievable.
She had been struggling to pay her debt with a low-paid retail job. But Ramsey urged people to drive up their income however they can – delivering pizza, cleaning houses – and fast. Erin Blanton thought: “I can clean houses.” She posted a message on Facebook offering cleaning services. Soon she was bringing in good extra money, and later was promoted at her retail job. It took two years, but the Blantons were able to save the first thousand dollars of an emergency fund and pay off their medical debt. They kept saving, in larger and larger increments.
Today Erin Blanton is a project coordinator at a local non-profit and Jay Blanton is an IT director. They also own a thriving small business doing aerial and landscape photography. They’re close to buying their first house, and they believe that at the current rate they might even be able to retire in their 40s.
“He’s Uncle Dave to me, or Papa Dave,” Erin Blanton says. His program “really has changed our lives”.
Erin Blanton, who leans left politically, is aware that Ramsey’s popularity is often identified with Protestant churches in conservative southern states. She urged me, however, to notice that there is no one archetypical Ramsey follower, that people who use his program are “black, white, Asian, Hispanic, gay, straight, liberal, conservative, Christian, atheist, Muslim”.
I asked her what she thought of Ramsey’s politics. The precariousness she overcame seems rooted in structural inequality – wouldn’t more government support be a lifesaver for struggling Americans?
She partly agrees, but thinks Ramsey’s blindspots are common to anyone who comes from a conservative American religious background. Ramsey is empathetic to poverty but his empathy is filtered through a specific vocabulary. When he tells a listener who has lost her job to seek “resources” from, say, a local church, Erin Blanton interprets that as an injunction to seek help anywhere you can, including from government benefits.
Ramsey doesn’t say that directly, she believes, “because he doesn’t know the words to say”.
In 2005, Ramsey joined forces with a Harvard law professor, Elizabeth Warren, to fight a seismic bankruptcy reform barreling through the US Congress.
The financial industry had spent more than $100m lobbying for the bill, which would make it harder for Americans to declare personal bankruptcy. Ramsey has described bankruptcy as one of the most difficult and humiliating experiences a person can go through, and advises people to do almost anything to avoid it. He believed, however, that the law would hurt people who had no other resort.
A clip from around the time, included in the 2006 documentary Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders, shows Ramsey getting a call from a woman who sounds like she’s choking back tears.
“I know you don’t advocate bankruptcy,” she says, “but, um, my husband is so depressed over our debt …”
“He’s talking about bankruptcy?”
“He’s talking about suicide.”
The coalition fighting the law included Warren – then one of the United States’ foremost authorities on bankruptcy law – as well as the liberal Massachusetts senator Ted Kennedy.
They were outnumbered and outgunned. Their last-ditch battle against the bill, which then senator Joe Biden sponsored and aggressively championed, failed.
“Senator Elizabeth Warren and I have known each other for 20-some-odd years,” Ramsey said on a radio segment last year. “She is a tremendously bright woman” and “an intellect to be reckoned with. And she and I don’t agree on hardly anything, except that there’s a student loan problem.”
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Their prescriptions to quash American indebtedness could not be more different. Warren, once a centrist Republican, became a fierce progressive who has called for the government to forgive massive tranches of student debt and make college free. Ramsey has doubled down on his emphasis on individual responsibility.
“I disagree with her,” he has said. “I’m a capitalist pig. There is nothing socialist about me. I would put my receptionist on straight commission if I could figure out a way.”
If not Warren, one might expect Ramsey, who has criticized Covid lockdowns and inveighed against the IRS, to be a fan of Donald Trump. He’s not. Ramsey has described himself as ambivalent about Trump, and skeptical of the idea that he – or any politician – is a savior for struggling Americans. “This idea that a President Obama or a President Trump can take credit for jobs being created is laughable,” he told Politico in 2018.
“I now have to spend more time talking [struggling people] into believing they control their own destiny than I used to,” he added. “I don’t know if I blame that all on ‘hope and change’ from Obama, or ‘Make America Great Again,’” but they’re “both hope slogans … I’m going to deliver something for you that you can’t do for yourself.”
One of the most popular segments on Ramsey’s show is called the Debt-Free Scream. People who have successfully paid off their debt using Ramsey’s program come in person to be interviewed on air. One recent screamer traveled from England.
The screamers’ testimonies have more than a little in common with religious witness or with the testimony at an Alcoholics Anonymous meeting: they recount how they began to accumulate debt, the toll it took, their period of rock-bottom, their epiphany, and their journey to paying it off. Then Ramsey reminds listeners how much the screamers paid off and in how many months, and they scream “I’m debt-free!” as people clap.
Another popular special segment is called Everyday Millionaires. Ramsey co-hosts it with his protege, Chris Hogan. Hogan, who is African American and speaks in a deep bass, is a former debt collector. Together, they interview callers who have a net worth of at least a million dollars.
The purpose of the segment, Hogan has said, is to let “people know that the American dream is not only alive, but it is available”. When a “myth” is “told too long, too loud”, he says, “people actually start to believe it”.
“Yeah,” Ramsey says. “And the myth is that you cannot build wealth, that you have to inherit it, and that all millionaires, all wealthy people, inherited their money. And we have found with detailed, in-depth research, as well as anecdotally, here on the air, that’s simply not true.”
Their first caller is Edward, in St Lucia, Florida. He is 52 and has a net worth of $1.4m.
“And how much of the $1.4m which you have at 52 years old did you inherit?” Ramsey asks.
“That would be zero,” Edward says, and everyone chuckles.
Edward is a retired commercial fisherman; his wife owned a hair salon. He says that their highest household income in a year was probably $50,000. He holds no college degree and never finished high school.
“So what do you tell people the secret to being a millionaire at 52 years old, making $50k as a fisherman, is?” Ramsey asks.
“Just [save] early and remember that stupid is around every corner,” Edward says. “If you don’t have the money, don’t spend it.”
Ramsey says: “There are people just like Edward all across America.”
Ramsey has made clear that he regards people like me as over-educated, pencil-necked idiots.
From a financial point of view, I am in some ways his worst nightmare. I have more than $80,000 in student debt, most of it from a master’s degree in journalism. I work at a famously liberal newspaper whose columnists like to advocate for all the sorts of bleeding-heart economic policies he hates.
I’ve spent weeks trying to know Ramsey: I’ve consumed days and days of his show, which has become less a radio program than a background to my every waking moment. I’ve spent hours crunching numbers, thinking about how I could apply his program to my own finances. I’ve studied his favorite passages in his favorite book, the Bible; I’ve read his second favorite books, his own; and I’m reading probably his third favorite book, How to Win Friends and Influence People.
The one thing I haven’t done is speak to the man himself. His office hasn’t responded to my multiple interview requests. So, on a recent Friday, a few minutes before the Dave Ramsey Show goes on air, I decide to call in.
The phone line clicks on. A message instructs me to leave a voicemail for the call screener. I record my question for Ramsey: if you have debilitating student debt, but are also living through an international pandemic, does it make sense to make debt payments, or put that money in your emergency fund until the pandemic blows over?
The screener doesn’t call me back. I try calling again; again to voicemail, again no response.
As the show starts, I realize that Ramsey isn’t even on today – it’s being hosted by two of his rotating cast of supporting personalities. They, like Ramsey’s other disciples, have been increasingly visible on the show lately. Ramsey is, perhaps, planning his succession.
I consider calling back tomorrow. Maybe if I call a dozen times an hour, three hours a day, for however long it takes, I can eventually speak to Dave Ramsey. Then I realize that there’s no point. I already know what he’s going to say.