I first sought Dave Ramsey’s advice in December of 2012, two months after getting married. My wife and I had moved to a new town, rented our first place together, and were preparing for our first married holiday together. The new Mrs. had yet to secure good work in our new town, so we guessed that Christmas would be tight, especially with student loan repayments kicking in after grad school. But it was the yellow legal pad of cold hard numbers that told us just how bad it would be. “Honey, look at this,” I told her, pointing to the bottom line of scribbled out numbers. “If we keep going like we’re going, we’re going to run out of money the day after Christmas. We won’t be able to pay for gas to get home from visiting the family!” That yellow legal pad was the official end of our financial honeymoon.
That was about ten years ago now, and the last decade or so has taught me that everyone has their yellow legal pad moments. At the time, however, financial insecurity was a new terror. We were 25 and 23, new to life outside the loan funded bubbles of higher ed. Who would deliver us, not just from the fear of insecurity, but from the season of poverty to come? A quick trip to the library and I had found the answer: Dave Ramsey’s book Total Money Makeover. Here was the solution to our financial struggles: eight baby steps that would set us up for a life of financial peace.
You don’t have to be in church circles to find personal finance advice with similar promises. Dave Ramsey may be a financial guru for many Evangelicals, but personal finance advice comes in many forms. There’s Mister Money Mustache for bloggers, or the F.I.R.E. community on sites like Reddit. Helaine Olen made waves in 2013 by publishing “everything” we needed to know about personal finance on an index card, which was then elaborated on in a 2016 book. Other books like The Millionaire Next Door and Rich Dad Poor Dad outlined how prudent spending and wise investing could certify your future wealth.
Regardless of your preferred advisor, the advice seems remarkably similar: austerity. Dave Ramsey’s famous admonition is to cut back on groceries for a season and enjoy a metaphorical diet of “rice and beans.” The millionaire next door only drives reliable used cars — new vehicles are for broke people who want to look rich. Cut back on the frivolities of life, throw every extra penny into paying off debts and long-term investments, and poof! Your financial insecurity will be a thing of the past.
A few weeks back, Anne Helen Peterson invited personal finance writer Dana Miranda onto her Culture Study website to discuss this school of austerity, introducing the term “budget culture” into the lexicon of personal finance. The biggest problem with budget culture, says Miranda, is that it doesn’t work.
In the same way diet culture is quick to blame health conditions on a person’s weight, or prescribe food restriction as treatment toward the goal of being thin, budget culture sees measures like credit scores and debt as signifiers of financial health, and prescribes spending restrictions as the first step toward wellness — defined, at its core, as being (on the way to becoming) rich.
The simplest problem with this approach is that budgeting, like dieting, doesn’t work. Restriction and deprivation are unsustainable; accurately tracking spending is hard; income fluctuates, and costs don’t operate on a perfect monthly reset. Budgets don’t account for the way lives work, so they’re hard to keep in our lives consistently. But even when people do use them, budgeting doesn’t necessarily fulfill its promises: A 2021 survey by The Penny Hoarder, for example, found that budgeters are just about as likely as non-budgeters to have any amount of debt.
The comparison to diet culture is an interesting one. Diet culture (largely) insists that the answer to weight gain is self-control. Budgeting culture, likewise, puts the blame for poverty squarely on the behaviors of the poor, with little consideration for uncontrollable life circumstances. Like diet culture, budget culture trades in judgment, making even the most mundane of expenses a cause for guilt or anxiety.
This was certainly true with my wife and I as we heeded budget culture’s call to austerity. Date nights became minefields that could explode and ruin our financial future if we spent too much. Invitations to weddings were fraught with panic over the cost of a gift. Texts from friends to hit up happy hour became conversations about limits: “only one beer” we would say, “and no appetizers.” The mental calculus about whether to add ice cream to the grocery store cart was not about counting calories, but about counting dollar bills. The anxiety about the future was the same: is our lack of self-control jeopardizing our long term [financial] health?
Miranda’s critique continues by emphasizing a number of ways that budget culture cannot work: it’s hard to put money away when, say, you’ve been denied economic opportunities because of your skin color. Or maybe it’s hard to escape cycles of poverty when the only loans available carry predatory interest rates, or there’s no parent eligible to cosign the loans that will pay for university tuition.
This culpability question of self control or circumstance occasionally appears during Dave Ramsey’s call in show. In those early marriage years, I was a daily listener and devotee. I had upgraded from yellow legal pads to google spreadsheets, looking months and years ahead into our financial future. No more would we be caught off guard by financial surprise! Austerity and budget culture would be the way we whittled down six figures of student loan and car debt, and Dave Ramsey would be our guide. But on the radio show, cracks in the foundations of budget culture would occasionally surface, shaking my faith in the process.
Between the joyful celebrations of happy families paying off mortgages and the cell phone videos of listeners snipping their credit cards in half, calls would come through that would force Dave Ramsey to punt. There was the family swimming in medical debt because of their sick child, or the mother asking how she can possibly put money in savings when her alcoholic husband is drinking it all away. Others still sought advice about navigating childcare expenses, maternity leave, or other greater social problems that had personal finance implications. In those moments, to his credit, Dave would invite his callers to hold on the line, and he would connect them with vetted experts who specialized in matters of domestic abuse or mental health, or maybe he could send them a book. But any listener with two ears and a heart could tell that the voices calling in needed more than financial peace baby steps — they needed miracles.
Managing expenses is one thing, but the great critique of budget culture is this: what do we do when hard work and self-control are insufficient to move the financial meter in a positive direction? On this point, Miranda doesn’t hold back her criticisms:
The only sure way to make money is to have money, but no personal finance expert wants to admit their wealth is built on anything other than a solid foundation of hard work and self-control — not their degrees in finance, Ivy League educations, middle class upbringings … or their ability to sell you a fantasy.
Miranda doesn’t quite call Ramsey and Mister Money Mustache snake oil salesmen, but she might as well have. The grandiose promise of financial prosperity cannot be attained by austerity alone.
So is there a different way to think of budget culture? One that acknowledges its potential benefits, but without its empty promises of opulence?
There is a section of the Bible, hidden away in the unread middle portions of the book, dedicated to life advice. The scholars have dubbed this section of the Bible “wisdom literature,” and like any culture, the people of Israel set aside some of their sacred writings for how to best navigate mundane and practical matters. To read the wisdom literature of scripture is to read basic life advice in the Book of Proverbs — like “don’t be lazy” and “be kind to others” and “trust God all the time.” The kind of things that apply to about 90% of life. However Ramsey might couch his financial guidance within Christianity, it’s really just good advice — probably better than most, but nothing to stake your life on.
Our household’s financial precarity continued for years, until the day I got a 30% raise. My wife and I decided to keep our frugal lifestyle and take the money from the raise and throw it at our debt. Using Ramsey’s advice, we paid off over 60% of our six-figure debt in those early years of our marriage, which opened up a number of future opportunities. The wisdom of Dave Ramsey worked for us — but it might not work for others in different life situations. Not everyone gets the 30% raise, and not everyone has a lifestyle where that extra money can go to something besides necessities.
It’s been ten years since Dave Ramsey entered our marriage, and three since he left. I still remember the exact moment we decided to step away from the baby steps. My wife and I were expecting our first baby in 2019, and we were driving down the highway on the way to a Lamaze class when we heard a clunk and grinding gears. Our rusty, old (paid off) Toyota Corolla ground to a halt on the side of a highway. As rush hour traffic whizzed by at 70 miles an hour, my wife and I made eye contact and sighed. There was no way we could bring a child safely into the world without a reliable car. For the first time in our married life, we would not be paying off our debt, but increasing it.
It’s wise to keep good finances. It’s prudent to stay out of debt. But in the end, what we need is something more than wisdom. We need work that pays well, educational opportunities, affordable housing, the list goes on … Thankfully, there is more to the Bible than just mere wisdom literature. It goes on to talk about forgiven debts and a love for the spiritual and financially poor. Of a Father who provides to his children their daily bread. There are echoes of a future in which food and drink are gratis and gold become relegated to the lowly job of street pavement. The wasteful are welcomed; their ledgers are wiped clean. God gives to us the desperately needed miracle, sparing no expense, not even his own son. It turns out there is no austerity in heaven.
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3 responses to “Budgets, Diets, and the Limits of Wisdom”
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Interesting article, and something I’ve been involved in as a volunteer budget counselor. My thought (and lifelong practice) has been to live simply and be content without the consumer excesses most people go for. Though financially secure, we’ve never bought a new car, for instance. So I’ve never actually personally had to budget, just be sensible (though my family does find my practice annoying at times when they see what other families spend). But cultural upbringing helps, having grown up in a small town working class community, and then doing Peace Corps in Africa, where you really see people living on very little. Kind of changes one’s perspective.
Much of this makes me think of the prodigal son and his father’s lack of concern about a blown inheritance. And then add in a fatted calf—the extravagance! It’s easy to forget all that He has is ours, and money is the least of it.
Greatly appreciated this article! My pennypinching days in early marriage when money was tight left me as obsessed with money as any rich Scrooge. Went through my own Dave Ramsey phase, but I’ve learned to let go and especially to be generous. Getting rich doesn’t need to be the point, thankful to have enough to enjoy what God has given and share it.