March 16, 2021

Personal finance influencers, TV gurus don’t understand poverty

“I don’t believe in stimulus checks,” Dave Ramsey, popular radio host and personal finance author,…

  • “I don’t believe in stimulus checks,” Dave Ramsey, popular radio host and personal finance author, said a few weeks ago.
  • Like other conservative personal finance influencers, Ramsey doesn’t understand poverty. 
  • Their advice doesn’t work for people with low income, and they cast moral judgement on those who are struggling financially. 
  • Bobbi Dempsey is a freelance writer and an economic justice fellow at Community Change. 
  • This is an opinion column. The thoughts expressed are those of the author. 
  • Visit the Business section of Insider for more stories.

When Dave Ramsey, the popular personal finance author and radio show host, spoke out recently against stimulus checks and other forms of COVID-19 relief, it was not shocking to anyone familiar with Ramsey or the personal finance industry in general. 

Ramsey epitomizes the privileged, rich, white guy that seems to dominate the conservative personal finance space. Like many of his counterparts, he appears oblivious to the challenges that so many poor and working-class Americans face, particularly during the current pandemic. 

“I don’t believe in stimulus checks,” Ramsey stated in a Fox News interview a few weeks ago, “because if $600 or $1400 changes your life, you were pretty much screwed already.” 

In that single sentence, Ramsey accomplished the impressive feat of both identifying the problem while also completely dismissing it. Yes, many people are screwed, financially speaking — and for them, that relatively modest amount of money would change their life by helping to address their immediate basic needs such as putting food on the table. 

The backlash against those comments was strong and swift, as Ramsey mentioned on his radio show soon after, noting, “Apparently I have upset a lot of snowflakes.” 

The privileged conservative view on poverty

Ramsey is a huge proponent of hardcore conservative philosophies, such as the ubiquitous “bootstraps” mindset, pushing the notion that anyone can achieve the American Dream through sheer will and determination. If someone works hard and wants it badly enough — ignoring systemic obstacles and inequality caused by racial bias, generational poverty, and other factors beyond an individual’s control — they can achieve financial stability.  

People with more investment savvy than me have repeatedly pointed out issues with Ramsey’s investment advice, but I will stick to an area with which I have far more firsthand expertise: income inequality and the denial some seem to have about it. Specifically, how stunning it is that rich, white guys in the personal finance space can be so oblivious about their significant level of privilege. 

Ramsey is notorious for his unyielding anti-debt stance. His cardinal rule is that followers should avoid debt of any kind, instead paying for everything — including homes and cars — in cash. Can’t afford to pay for a car in cash? Ramsey says you should just wait until you can save enough money, but doesn’t provide a solution for how you are supposed to get to work in the meantime. Many low-income people live in rural areas where public transportation is limited or nonexistent. And expecting working-class people to save up enough to pay for a safe, reliable car entirely in cash is asking a lot when many Americans couldn’t have managed to pay for a $400 emergency even before the pandemic. 

He also believes credit scores are irrelevant and unnecessary — a hugely privileged take that only someone with the substantial resources it takes to live a completely cash lifestyle can afford. For regular, working-class folks, credit scores are an inevitable — and often painful — part of life, one that is frequently the source of considerable anxiety. Try renting an apartment with a bad credit score. These days, even insurance companies and employers often routinely check your credit score — if yours isn’t good, it may result in higher insurance premiums or a revoked job offer. 

For someone so unforgiving about other people’s misfortunes, Ramsey smoothly uses his own financial missteps as fodder for the “If I can do it, so can anyone” rhetoric that’s a big part of his sales pitch. 

Years ago, he declared bankruptcy, which he now spins as a testament to his ability to go from broke-to-millionaire not once, but twice. However, if studying Donald Trump’s financial track record has taught us anything, it’s that bankruptcy looks very different for the rich than it does for the poor. 

When it comes to his significant level of privilege — and his apparent inability to recognize it —Ramsey is far from the only offender in his industry. This is a common phenomenon among rich conservatives in the personal finance space. 

Pete Adeney — a popular personal finance blogger who goes by the moniker Mr. Money Mustache — also promotes a debt-avoidance approach, which he can maintain thanks to the security provided by what he has hinted is a 7-figure investment portfolio. He bought a $315,000 home for cash, and here’s his take on car loans: “If you don’t even have the money invested somewhere to allow you to pay for a car in cash, you are obviously far too poor to buy that car.” 

He also doesn’t have health or homeowner’s insurance. (He did recently opt to enroll in a Direct Primary Care service, a sort of subscription plan that has some similarities to insurance, but which is also not available to everyone — the nearest provider in my state is 90 minutes from me.) He has the choice of opting to forego homeowner’s insurance because, of course, he paid cash for his home — no mortgage means no lender requiring mandatory insurance on the property. And should he get sick, he can simply pay for his medical treatment out of his substantial financial reserves. Those are luxuries the average working person doesn’t have. 

Moral judgment instead of empathy 

The privileged figures of personal finance tend to take a hard stance against others who aren’t able to achieve similar financial status, often blaming a lack of self-discipline or the inability to stick with a strict financial plan. There is commonly an implied link between financial success and moral character.  

Notably, this often seems to play out in a “do as I say, not as I do” scenario. In that same recent Fox News interview, Ramsey touched on the subject of student loan forgiveness, which he also opposes, disputing the idea that such initiatives would stimulate the economy. Ramsey nodded when the program host claimed forgiveness proposals let borrowers avoid the “moral obligation” of paying your debts and keeping your word. Yet Ramsey, of course, failed to fulfill his obligations to his creditors during his bankruptcy experience — but that doesn’t reflect poor morals on him. 

Despite their seeming obliviousness to the current realities of many working Americans, personal finance celebrities like Ramsey and Adeney have large, passionate followings who will aggressively react to any online criticism of their idols. For his part, Ramsey — who loves to talk about “morons” and “snowflakes” — seems to have a thin skin and low tolerance for anything less than complete loyalty. His company has a well-documented history of monitoring employees, seeking out and removing anyone who doesn’t fully support the Ramsey-established moral code. He is also notorious for swiftly blocking anyone on social media who dares to question or criticize him. 

But when you oppose basic, bare-minimum programs that could provide a critical, life-saving safety net to those who desperately need it — and throw in a generous helping of morally judgmental shade as a bonus — you deserve and should expect every bit of the criticism that follows.