Dave Ramsey vs Debt Management - Is It As Negative As He Claims?
I was reading a Dave Ramsey article the other day that completely trashed debt management programs, including debt consolidation and debt settlement, stating that these companies would do nothing but take your money and ruin your credit, and, according to him, the only way to get out of debt is the old-fashioned way, spend less.
I have to say, that in some part I do agree with Mr.
Ramsey, and his advice is the same that my grandmother gave me when I was younger: "The best way to save money is not to spend it.
"There is one flaw that I see in this theory with regard to Ramsey's negative criticisms toward debt management programs and his adamancy toward traditional debt help techniques.
While it does give you great advice to help you avoid future financial problems, what happens if you are in current financial problems? I've worked with a number of individuals who followed my grandmother's advice to a T, but then one day they lost their job, they or a relative became sick, they had to take a pay cut, or a number of other incidents.
Bills began to back up, and before they knew it, they were in a financial crisis.
These same people are the ones who willing canceled their cell phone services, cut out cable, and stopped eating out in an effort to scrape together every penny they could.
The problem is that many times these efforts just aren't enough, and what they saved didn't cover the new debts they had accumulated.
For example, by cutting costs one might save an extra $300 a month, but with a pay cut you are making $600 a month less.
Even by cutting out unnecessary spending, you're still in the red by almost $300.
So what is my point?Ramsey's traditional method of debt management is extremely effective, but it is not always the answer.
Sometimes you need to look for financial assistance that is a little more aggressive.
In other words, desperate times may call for desperate measures.
I'll be the first to admit that debt consolidation and debt settlement are not for everyone, but they may give consumers that extra help they need to keep their heads above water, which makes them valuable options for a number of individuals.
In fact, if one were to follow Ramsey's financial advice while in a debt consolidation or debt settlement program, he or she might find him or herself saving more money and getting out of debt sooner.
I'm in no way advocating debt management programs as an easy answer to financial problems, because it definitely is not, but it is a viable solution for a number of indebted individuals.
After all, it does take hard work and discipline to make it through any type of debt management program.
For that reason, I feel that Ramsey might be a little over cynical about the value of these programs, which should not be disregarded with prejudice.
Instead, they should be considered as plausible solutions for certain financial situations, because, after all, a great number of consumers have benefited from debt management programs.
On a final note, one thing is very true, whatever method you use to get out of debt, the most important thing is to maintain discipline and good spending happens in order to keep yourself debt free.
I have to say, that in some part I do agree with Mr.
Ramsey, and his advice is the same that my grandmother gave me when I was younger: "The best way to save money is not to spend it.
"There is one flaw that I see in this theory with regard to Ramsey's negative criticisms toward debt management programs and his adamancy toward traditional debt help techniques.
While it does give you great advice to help you avoid future financial problems, what happens if you are in current financial problems? I've worked with a number of individuals who followed my grandmother's advice to a T, but then one day they lost their job, they or a relative became sick, they had to take a pay cut, or a number of other incidents.
Bills began to back up, and before they knew it, they were in a financial crisis.
These same people are the ones who willing canceled their cell phone services, cut out cable, and stopped eating out in an effort to scrape together every penny they could.
The problem is that many times these efforts just aren't enough, and what they saved didn't cover the new debts they had accumulated.
For example, by cutting costs one might save an extra $300 a month, but with a pay cut you are making $600 a month less.
Even by cutting out unnecessary spending, you're still in the red by almost $300.
So what is my point?Ramsey's traditional method of debt management is extremely effective, but it is not always the answer.
Sometimes you need to look for financial assistance that is a little more aggressive.
In other words, desperate times may call for desperate measures.
I'll be the first to admit that debt consolidation and debt settlement are not for everyone, but they may give consumers that extra help they need to keep their heads above water, which makes them valuable options for a number of individuals.
In fact, if one were to follow Ramsey's financial advice while in a debt consolidation or debt settlement program, he or she might find him or herself saving more money and getting out of debt sooner.
I'm in no way advocating debt management programs as an easy answer to financial problems, because it definitely is not, but it is a viable solution for a number of indebted individuals.
After all, it does take hard work and discipline to make it through any type of debt management program.
For that reason, I feel that Ramsey might be a little over cynical about the value of these programs, which should not be disregarded with prejudice.
Instead, they should be considered as plausible solutions for certain financial situations, because, after all, a great number of consumers have benefited from debt management programs.
On a final note, one thing is very true, whatever method you use to get out of debt, the most important thing is to maintain discipline and good spending happens in order to keep yourself debt free.