The Total Money Makeover Infomercial
My parents bought tickets for Rachel and me to see "Total Money Makeover with Dave Ramsey" in Grand Rapids. I figured I was never going to get around to reading the book and it would be faster to see the seminar instead. Rachel was extremely reluctant to attend but decided she would rather not spend the day alone.
I was doing most of the program already without knowing it. I guess that's why I have hardly any debt, I live without credit, and I progress to fewer and fewer bills to pay instead of more and more. Let me spare you the money, the sermon, and the cramped stadium seats (and being surrounded for five hours by a church-like infomercial setting) by telling you for free everything worthwhile you can get out of The Total Money Makeover.
Do these steps in order.
Used cars. If you are making payments on a car you bought new, sell it. If you've paid off your debts and there is a certain car you love, you can get the same car when it's two or three years old for a jaw-droppingly lower amount. If you have big debt and are serious about getting out from under it, put away money every month toward a reliable three-or-four-thousand-dollar used car. I finished paying off my long-lasting clunker a year ago and it feels great. Granted, it costs five hundred dollars a year in repairs, but that's kind of like "car payments" that are spread into the future without interest.
Cut up your credit cards. Use a debit card when you buy online. Spend in cash as often as you possibly can, so that you will visibly see the money you are losing leave your hands. It's scientifically proven that you will spend less money. I have no credit cards. I withdraw $100 every week, and when my wallet's empty I just stop spending. Works great for a scatterbrain like me.
When you have done this, build up an emergency savings account of $500 to $1000. If you don't have that umbrella in an emergency, you'll feel like there's no other way to solve the emergency but to spend on credit. That's how good, responsible people get trapped in debt. If you spend as if emergencies aren't going to happen, you're living beyond your means. Pay for your car breakdowns, small-to-medium medical bills, and civil infractions before you even find out about them. You'll save big.
To stash that emergency fund, get a weekend or evenings job if you have to. Deliver pizzas or something. I'm interested in getting one myself. Keep the second job until you're insulated against sudden attacks of life, and then you can be reasonably sure you won't be in that position again.
When you have done that, pay off debts from smallest to largest. Pummel it with the hugest payment you can while you pay the minimum on the others. This is for psychological reasons. Mr. Ramsey is perfectly well aware it's mathematically the opposite of the cheapest and most efficient way, but you've got to see visible progress or you won't stick to the plan. If you pay off the largest first and get discouraged and give up, you won't get out of debt and that's even worse. I had a credit card with a just a TV on it and paid it off, and it felt like I had made a victory.
Budget. This means just understand where your money tends to go. If you have to, keep your food cash in one envelope and your entertainment cash in another envelope. That is, unless you want to live beyond your means and get poorer and poorer until you die penniless in a state-run nursing home. You could do that if you want.
Then after you're out of debt, save 15% of every paycheck in an interest-bearing savings account. If you are saving more than your emergency fund while you're still in debt, the money is not working for you to reduce your interest charges. When you're debt-free, put it to work for you making interest. This is what getting and staying wealthy is entirely about. Ask any dot-com flash-in-the-pan millionaires whose debt payments bankrupted them.
After you have saved enough money to live on without an income for 3 to 6 months, start investing. Ramsey had a lot of interesting advice about this, but you're not at that stage yet, are you? You can make a lot more money getting (and staying) out of debt before investing than you can by investing while in debt and paying your profits to the credit card company.
To sum up, The Total Money Makeover teaches you the solution is not just to make a higher income, but to stop giving that income to the credit card company. The reason it's kind of like motivational speaking is that now that you know the steps, you're probably not going to do them. Admit it. You've got to be really scared and motivated before you'll sacrifice what it takes to fix your financial ruin.
That's it. That's the Total Money Makeover. What I have not talked about is the social environment that surrounds it. In no way do the following factors change what has been said above. I don't care if Howard Stern started saying this stuff, it wouldn't make it untrue, and Jesus himself couldn't make it turn true. If it works, it works. Unfortunately, Mr. Ramsey and his fans don't think that way about trust and credibility. To them, such endorsements are really important. That's why Mr. Ramsey has to keep reminding us what he's saying is biblical. His fans are the sort of people to whom endorsement is everything. "Bee pollen" nutritional health and energy supplements know these people so well that they find it worthwhile to advertise in his program book, with Mr. Ramsey's endorsement. Gag me with a spoon.
Let's be as fair as possible here. Those who remember Patrick Swayze's character in Donnie Darko are probably forever immunized against motivational speakers, but we are not talking about something quite that bad. It would be an unfair comparison. Nevertheless the taint is there in several places.
This authority-based approach to learning creates two problems. You should be asking "problems for who?" I'll tell you right now things are not going to be problematic for Mr. Ramsey and his followers. No, things will be peachy for them. Mr. Ramsey is smart enough to project the persona that will get him the success he wants and make certain people happy to hear him. I do not blame him for that, even though he's not marketing to me. This persona is a preachy style, and there is a certain type of person (*ahem* the Moral Majority *cough*) who love to watch Judge Judy and Dr. Laura attack the dumbest and most irresponsible people they can dredge up. The Moral Majority gets satisfaction from hearing somebody set their enemies straight. The easy targets they dredge up to set straight don't represent you and me; but never mind that, those who think the country is going downhill will think they do.
That's why Mr. Ramsey has to paint those who disagree with his plan as mean old grouches with a grudge. If you don't agree with the Money Makeover, you ought to be able to agree to disagree. But from a biblical standpoint, that's not good enough; he has to lay claim to rock-solid stability. He asked everybody to stand up and point north with their eyes closed, to demonstrate what he felt was the worthlessness of a lone dissenter. The Moral Majority thinks those who disagree with them are operating on a flimsy hunch, and Dave Ramsey wants to encourage them to believe this about you and me. He knows where his profits come from. If people think they can get a compass for themselves, and actually perform research on their own, why would they pay to go to this pep rally and hear it "endorsed" by him? According to Dave Ramsey, and according to most fundamentalist preachers, the alternative to the Moral Majority's endorsements would have to be a flimsy guess.
Dave Ramsey says a lot of good things but he is not the compass to your finances. Reality is the compass and he's just reporting on it. That means he can give you a head start but you've got to test it for yourself. Then you don't need him ever again. The bible says a lot of good things but it is not the compass to your life. Reality is the compass and the book of Proverbs is a report about it. (I wish I could say as much about the rest of the bible.) Do the work for yourself. Research lots of experiences, observe them carefully, question your own biases and those of your teachers, constantly hone your flawed map of the terrain, for it will always have some flaw somewhere in it. Dave Ramsey and the bible and your pastor are scholars of life who don't want other people to be scholars of life; they would rather do it for you.
That way you are likely to end up in an infomercial church, following a godly compass with east and west painted on the wrong sides, all agreeing to point east and call it west in unison. They love getting together in a crowd loud enough to drown out patient dialogue. That's why we needed to waste an hour being told how great the money makeover was going to be, and another hour being told we were just spiteful and in childish denial if we disagreed. Again, this is what mobs of church-goers need. I'd rather he just told us the plan and let us make up our own minds, which is not something the pep-rally crowd can do. They need the crowd in order to truly believe.
All in all, this was an interesting anthropological expedition into a wacky subculture, in the same way as the witchcraft conference I once attended. I should make expeditions into more subculture events and write these sort of reviews more often. There is a lot to be learned by watching people. But from now on I won't bring Rachel along to endure environments that are poisonous to her; she has had quite enough for a lifetime.
Comments
drkelso on Oct. 24, 2005 5:06 PM
You alluded to a step but didn't mention it specifically:
Self-Motivation - Instead of wasting your time and money on people telling you what to do, get a library card and learn it for free.
I'd almost say that about college but some employers think "a degree" means something.
cosette-valjean on Oct. 24, 2005 5:06 PM — Whew, what a day that was.
If I had known it was going to be so uncomfortablely cramped and openly manipulatively evangelcal Christianized, I would have spent the day alone. I get very cranky when placed in that environment (as you noticed). I feel like yelling "Wake up and see reality!" to all those zombies happily following their leaders. It amazes me that people don't see the manipulation and even LIKE the manipulation. Boggles the mind.
A lot of what he said does make sense, but requires huge committment and large amounts of painful sacrifice. Hence the large guilt trip for your "motivation" per the christian influence.
Thanks for thinking of me and seeing my misery, but it was ultimately my choice to come along even though it was uninformed as to the actual experience being offered. Oh well.
I think I could tolerate one hour of interesting people watching experiences if I had soft seats and climate controlled environment. After that point I would have my fill. I get so frustrated with deluded people trying to influence and manipulate me to be deluded too. Sigh. Not enough patience and ability to detach myself, I guess.
marahsk on Oct. 24, 2005 5:30 PM
OTOH, I was looking at the book by that latte guy (I don't remember the title or the author, but his idea is that we could all become rich if we cut out spending on the little things (ie lattes) and invested that money. The incentive is, take that $5 latte, assume 10% per year for 20-30 years (depending on your age). When you realize how much that latte costs, you won't want it so much anymore.
Interestingly, he says that trying to cut out your debt first never works, and that you're better off investing something, and using the proceeds to pay off your debt. I don't know which method I believe.
I'm more likely to believe something that's presented logically.
avt-tor on Oct. 24, 2005 8:38 PM
Investing is almost as good as paying off debt. The important thing is to not spend every dime, to live at a lifestyle 10-15% less than your total take-home pay. The advantage of investing is that it adds up. The advantage of paying off debt is that credit card interest is usually higher than almost any investment return one is likely to make (so in the long run it's a better investment). Either way, the trick is just to not spend every dime that comes into one's hands.
marahsk on Oct. 24, 2005 10:00 PM
Well, the guy's point was that if you put off investing until your debt's paid off, it will never happen.
I see his point, but it's hard to justify investing at 10% while you're paying 15% or more on your cards.
But in order to be solvent, you have to have your credit cards paid off, sufficient investments for retirement,and a cushion of 3-6 months living expenses; is it any wonder that people decide that it's impossible, give up, and buy an ipod?
paranthropus on Oct. 24, 2005 8:15 PM
I read that as "Total Monkey Makeover".
To hell with the budget. I would pay anything to see a macaque with a boob job and a bikini wax.
temujin9 on Oct. 25, 2005 6:30 PM
Okay, so I'm not the only one . . .
avt-tor on Oct. 24, 2005 8:31 PM
This persona is a preachy style, and there is a certain type of person (*ahem* the Moral Majority *cough*) who love to watch Judge Judy and Dr. Laura attack the dumbest and most irresponsible people they can dredge up. The Moral Majority gets satisfaction from hearing somebody set their enemies straight.
Of course in the actual New Testament these people are referred to as "Pharisees", but the so-called religious right ignores most of the New Testamanet.
phecda on Oct. 24, 2005 9:35 PM
When it comes to debt, you have to examine how much the money has cost you. Credit cards charging usurious rates of 19% or higher (hell, anything over 10%) are bad debt. A mortgage on a house that only costs you 6% and you are fianancing for 15 years or less, is a much better use of debt. Not that I did this intentionally, but I bought a house in an area that had 25% / year increase in value. I put 10% down, and had a 15 year mortgage for just over 5% for the last three years. The house nearly doubled in value and that profit is siting in my bank now, so I can use that money to leverage other investments. Kids, don't try this at home -- investing in Florida real estate is not for the faint of heart, and I'm *REALLY* glad to be out of that market...
And credit cards are not evil as long as you pay them off in full every month. If you don't have the discipline to do this, then don't use one.
And *ALWAYS* live within your means.
But as for buying stupid stuff -- Buckminster Fuller predicted that all this cheap crap that we buy from China that we throw away in less than a year typically would be the bane of the economy. Stop wasting money on useless crap. Spend the extra cash on a quality item that will last you decades instead of six months.
My two centavos...
zpgf on (None)
matt-arnold on Oct. 25, 2005 1:24 PM
I noticed that I know many people on your friends list. Have we met?
zpgf on (None)
matt-arnold on Oct. 25, 2005 3:40 PM
Yes I do. Have we met?
zpgf on (None)
matt-arnold on Oct. 25, 2005 5:53 PM
OK, it's you! Welcome.
zpgf on (None)
matt-arnold on Oct. 25, 2005 6:54 PM
I certainly remember. You have been at the house many times.
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