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Dave Ramsey has been passionately preaching financial advice to Americans for decades, but younger generations are now listening to advice that the white-bearded radio host doesn’t fully explain the current cost of living crisis. He is accused of providing the information.
One frothy example is Ramsay’s vocal abandonment of his daily coffee joe. In a 2021 blog post, he claimed that your coffee habit could be costing you $766 a year, money that you should use to pay off your student loans, invest, or even buy a plane ticket. suggests.
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But young Americans say they’d rather hold on to the small luxuries that maintain their mental health and bring them joy than save a few extra bucks.
“Self-care is so important, and if you’re going to buy a $6 cup of coffee every day, do it,” Jarrod Benson, a 32-year-old comedian from Orlando, Florida, told Business Insider.
“I’d rather have some caffeine than be depressed over $6.”
Social media users despise Ramsey’s advice
The hashtag #daveramseywouldntapprove has been viewed about 67 million times on TikTok, with many users posting videos criticizing financial personalities who are out of touch with reality and shamed for their financial habits.
Benson, for example, isn’t shy about jumping on the bandwagon with his content, drinking a cold pumpkin cream beer or grabbing a $4 crumble cookie before doing a Ramsey impersonation staring menacingly from afar. I started.
Ramsey’s advice, which includes living frugally and taking on more jobs to boost your income, clearly doesn’t resonate with younger listeners.
In a recent TikTok, Kate Hyndman, 31, an administrative assistant from Pasadena, California, emphasized that her mental health and quality of life are far more important to her.
“I don’t feel like doing it. anything It’s about getting out of debt,” she says. “I don’t want to eat rice and beans every day, and I don’t want to work three jobs and spend time with my kids. I don’t want to forget my favorite salad on Friday.”
Hyndman explains that because the bills are so high, it’s helpful to save a little extra cash here and there so you don’t go far out of debt.
“The cost of living and low wages are the cause of most Americans’ economic hardship,” she says. “It’s ridiculous to be told that by just giving up your quality of life for five or 10 years, you can gradually make big changes.”
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Ramsey’s financial advice isn’t always correct
Hindman decided to turn $30,000 in credit card debt into a debt consolidation loan with an 8% interest rate. Ramsey famously dislikes this strategy, which he claims is actually ineffective.
Of course, as with any debt resolution hack, it depends. Keeping track of multiple credit cards at the same time can be more difficult than paying one bill each month. Additionally, if you can secure a lower interest rate on your loan than what you were struggling with on your credit card, it could be a great opportunity to save you hundreds or thousands of dollars in debt over the long term.
On the other hand, new loans may come with additional costs, such as prepayment penalties and late fees.
However, Ramsey’s own recommendation is the snowball method, where people pay off their smallest debts (or accounts with the lowest balances) first, and then make only minimum payments on all other outstanding debts. may not be the right solution either.
While this method may provide a behavioral incentive to continue, it ultimately costs more interest and takes longer to clear the debt compared to tackling high-interest debt first. It may take some time.
“Dave Ramsey would say, ‘I don’t care if it’s cheapest to pay off the highest-interest debt first, because it’s more expensive to give up on it,'” says Yale University. says James Choi, professor of finance. he told the Wall Street Journal. “I think the jury is out on that.”
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This article is for information only and should not be construed as advice. PROVIDED WITHOUT WARRANTY OF ANY KIND.
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