THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO.
Recently, I’ve been reading a lot of Dave Ramsey posts by bloggers. Some bloggers love him because his course transformed their lives. Others aren’t nearly as excited about some of axioms that Dave espouses.
I thought I would share my personal experience facilitating the Dave Ramsey Financial Peace University course and give you some of the funny, and not so funny, feedback that I’ve received over the years.
As most of you know, the course includes nine lesson plans. As you’ll see, I think there is a bunch of fluff in the mix.
The first lesson plan is really just the introduction to the course. Dave highlights his seven “baby steps”. In this lesson, he pumps up the crowd as he tries to get everybody to commit. Outside of the seven baby steps that he outlines, I personally think he could eliminate this lesson. There just isn’t much to it other than introductions, which could be condensed greatly.
Mrs. Mustard Seed Money comment – Since I’m the editor, I figured I’d throw in my two cents on this. Personal finance is not my passion, like it is for Rob. So I can appreciate Dave Ramsey trying to energize the crowd to motivate them to crush debt and take charge of finances. I understand the psychology behind it, so it doesn’t seem like as much of a waste to me as it does for Rob.
Relating with Money
The second lesson plan is all about making sure you and your spouse are on the same page. If you’re single, this is probably a bit of a waste. In some ways, if you don’t know how your spouse spends money, you may have bigger issues in your marriage.
Mrs. MSM – I thought this lesson was invaluable. At first, I had no idea that Rob was a free spender. He always seems so measured in his spending, but then I noticed he impulsively purchases items when he believes there is an “emergency”. We still have an unopened leather conditioner for our sofas that he’s never used. That’s $10 down the drain.
Cash Flow Planning
Cash Flow Planning is really a fancy term for learning how to budget. This third lesson is the first valuable lesson in my opinion. For many people, this may be the first time they’ve done a budget. It’s a great place to start in order to take control of finances.
Mrs. MSM – When I took the course, I had never done a budget. I grew up in a household where I never heard the word “budget”, so this was my first interaction. Plus on top of that, Rob had handled all the finances, so I realized I could no longer be blissfully ignorant in that area.
The fourth lesson is Dumping Debt. This is when Dave espouses the evil of credit cards, although a lot of bloggers hate his cash-only stance. Honestly, I’m lukewarm in this area. Some people really do need to go all cash, so they can feel their hard-earned money leave their wallet. But with that said, if you responsibly pay off your credit cards, utilize cash back!!!
Mrs. MSM – I had never really considered the psychology behind paying in cash vs. paying with credit card. It makes complete sense, although we still predominantly use credit cards in our home for tracking and cash back purposes.
The fifth lesson is Buyer Beware. Dave demonstrates how marketing influences you and how companies suck you in. I’m not saying this is bad to recognize, but I’m not sure it’s worth spending an hour on.
Mrs. MSM – My favorite part of this lesson plan was humming along to some of the slogans that Dave sang. Entertaining, but not terribly useful in my opinion.
The Role of Insurance
The sixth lesson is The Role of Insurance. I can honestly say this is the only reason that I signed up for FPU in the first place. I wanted to learn more because at the time, I had no idea how much and which insurances I needed. With that said, there are some insurances that I disagree with Dave about and think are a huge waste of money, namely identity insurance. I haven’t done enough research, but at first glance, it seems like overkill.
Mrs. MSM – This is the part of the course where I started to glaze over. Insurance is super boring to me, but Rob was on the edge of his seat as he didn’t want to miss a beat. So I checked out a little bit since I knew that he was paying attention and would discuss it on the drive home. I love you, honey!!!
Retirement and College Planning
The seventh lesson is Retirement and College Planning. Disclaimer before I start– this lesson makes my blood boil. He pushes hard to ignore fees and to buy active mutual funds. He touts 12% rates of return and really sets false expectations for people. I don’t know how he can get away with this false advertising.
He also pushes Endorsed Local Providers (ELPs), which are essentially Dave-approved financial advisors. How do you become approved? From what a financial advisor friend told me, you pay Dave a certain amount and then he includes you in that network. They’re not necessarily Christians or have any specific background, so I’m really not sure of the vetting process. My friend also said that Dave’s team pushes the American Fund, which has a front load of 5%. Most of us know this is probably not how we should be investing.
Mrs. MSM – This is Rob’s wheelhouse. After this video lesson ended, he told everyone in the room to forget what they had heard. Then he walked them through what they should do instead. It was fun seeing him in his element. And all of our peers were listening intently to his advice.
Real Estate and Mortgages
The eighth lesson is Real Estate and Mortgages. This is probably the lesson plan that I hear the most push back on in class. Dave pushes hard to get into a 15-year fixed-rate mortgage. However, living in the DC area, a lot of people balk at this and believe it to be unrealistic. Waiting to afford a 15-year fixed-rate mortgage for some might result in them never being able to afford a house. As someone who obtained a 15-year fixed-rate mortgage and paid off my mortgage early, I know it’s doable, but I definitely understand the consternation.
Mrs. MSM – Growing up, my family was searching for the perfect home for years. We had outgrown our current one at the time, so every weekend we’d visit open houses in search of our future home. So real estate has always been something interesting to me. I enjoyed listening to most of this lesson, although anytime I hear about real estate from someone who is not based in our area, I do take their information with a grain of salt.
The Great Misunderstanding
The ninth and final lesson is The Great Misunderstanding. This is basically a rah-rah speech at the end when Dave tells you to go out and execute on the previous lessons and take the appropriate baby steps.
Mrs. MSM – I liked this lesson because it talked about purpose. I saw how it all tied together and the impact that I could have on my community by being debt-free and financially secure. It was inspiring.
My Bottom Line
So honestly, I believe that all 9 lessons could easily be condensed into 3-4 lessons. In my opinion, more than a month of classes is a bit much. I think that’s part of the reason why so many people drop out during the course.
Mrs. MSM – I agree to an extent that the course feels drawn out. The one benefit of it though is that it allows people to digest a small amount of information at a time to allow the habits to take effect. With that said, I won’t interject anymore since the following is his experience in the class. Mrs. MSM… signing off.
My Experiences Facilitating the Course
Normally a course starts out with around 40 people. By the end, we’re lucky to have about 20 people left. Over the years, we’ve tried to figure it out whether it’s because people don’t want to do the work because it’s too overwhelming or whether it’s because people don’t agree with the principles.
A couple once came up to me and acknowledged that they were in a lot of debt. But since they disagreed with Dave’s philosophy, they decided to follow their own path. The husband was convinced he was the smartest guy in the room. He touted buying cars and furniture at 0% down, believing he was really gaming the system. I remember thinking he was definitely savvy in the short-term, but he didn’t have any savings for retirement.
Why Would I Teach It?
So I know it sounds like I have a lot of issues with Dave Ramsey’s curriculum. That is correct. My wife has even asked me if I disagree with the lessons plans so much why would I help facilitate the course. It’s because I have the ability to directly influence people’s finances after Dave is finished talking.
The set up is typically an hour of Dave talking and then 30 minutes to discuss the lesson afterwards. Most of the people I know have a hard time focusing for an hour straight with Dave, but they are much more attentive in a shorter group setting. At that time, I have the ability to “correct” some things that I hear or discuss financial concerns of those in the group.
I especially love addressing the Retirement section. His investment advice, as I described above, is absolutely terrible. So, I try to re-educate the class about passive index funds and how fees actually matter.
On top of that, I have had so many awesome and funny conversations through these group discussions.
I was once was talking to a woman about cutting back on eating out so that she could tackle more of her debt. She adamantly replied, “No way, that’s my entertainment budget. I’d rather sell my car and ride the bus to work everyday than give up eating out with friends.”
I laughed. I personally love the freedom that owning a car grants me. But it just goes to show how different people value different expenditures.
Updates & Feedback
At church, people pull me aside after they’ve taken the class to share how they’re doing and their current financial journey. It’s always exciting to hear their updates and receive feedback. A lot of times, these individuals will also ask me for advice in their current situation, and I try my best to guide them in the right direction.
Impacting My Community
In conclusion, the main reason I teach the course is because I feel like this is my way to give back and make the biggest impact in my local community. Of course, I would love to condense the course and teach certain things differently. Now I just need some time to create my own, modified course 😉