Dave Ramsey and the Power of Community

When I was in college, I did a great deal of religious exploration. I attended services for tons of different religions, trying to understand all of the varieties of religious experience out there and to simply see what worked for me.

While I never really came up with any conclusions about my own faith, one thing I did notice is that the most powerful parts of any service were the ones where camaraderie was at the forefront. When people stood up and sang together, when people embraced each other, when people said a common prayer in unison – those were the moments that came across as powerful to me and stayed with me later on. Those moments gave a unique sense of not being alone in all of this.

Community is powerful. It’s a very powerful thing to find people who believe similar things as you do, who strive to make you feel better about yourself, and who accept you into their community. It feels good and it often reinforces whatever messages are being shared throughout the community.

Which brings me back to Dave Ramsey.

I’m using Dave Ramsey here as a proxy for lots of different personal finance speakers, but his offerings are perhaps the easiest ones to show what I’m talking about.

For those of you unaware, Dave Ramsey’s company, the Lampo Group, produces a series of courses called Financial Peace University. These courses are hosted locally, often at churches, and typically consist of a series of thirteen weekly classes.

In those classes, you find a group of people who share a common problem: financial troubles, usually debt related. The classes themselves focus heavily on discussion situations, where people talk about and share their problems and look for solutions to those problems.

What’s happening here? The same thing that’s happening in the church service. A community – a group of people congregated around a common trait – is helping the members to thrive.

For those of you who have taken Financial Peace University, I’m going to throw out a suggestion, one that matches the experience of a lot of readers who emailed me. The materials were useful, but the real value of that class was the other people and the realization that you’re not alone in struggling with your finances. Not only did you find you weren’t alone in the problems, you also found that you’re not alone in the solutions.

A big part of the reason that so many people find Financial Peace University so empowering – and the same goes for a lot of financial material – isn’t the great material being presented. You can find that material all over the place.

The reason it’s powerful is the other people, the sense of community, the same exact thing that I admired most about the religious services I attended.

The Lampo Group makes a pretty penny facilitating these courses, and it certainly costs people to participate in them.

I argue that you can find that same sense of community and shared purpose in your own life if you let go of your fear of communication with others.

Instead of signing up for a course like that and writing a check that you can’t really afford, find your own group – and start with the people in your own life.

Get those people together and start a “book club” on pretty much any personal finance book out there. You could use Your Money or Your Life or my book or anything else that trips your trigger. You could use any online series on any blog you wish.

The truth of the matter is that a lot of the material you find in those sources is going to be pretty similar to other sources. Pay off your debts in an orderly fashion. Spend less than you earn. Get a grip on your spending. Figure out your spending weak spots and address them. Start setting written goals for yourself. Don’t sweat the source too much.

Instead, focus on the power of community.

Right now, look through your list of friends and family. Look far and wide for any of them that might be having some financial trouble in their lives – or for those who might have some financial answers of use to you. Write to them with a little bit of confession, describing a bit of where you’re at and what you’re seeking, and simply say, “You know, maybe we could work through this together and put us all on a better path.”

That’s the initial hump, and it feels like a mighty big one. A lot of people, from what I’ve seen, attend paid groups and seminars like Financial Peace University in order to avoid that hump. They want that community, that sense of being in this together, and they’ll pay for it.

In the end, though, are you afraid of these people in your life?

It takes a little bit of risk to open that door, but that risk pays dividends in forming a much deeper bond with them. It can also help you get your financial life on track – and you don’t have to drop three figures of your hard-earned money on a financial course, either.

I started The Simple Dollar because I realized that I just wasn’t afraid any more to admit to others that, yes, I was (and in many ways, still am) a financial half-wit. The result of that wasn’t that family members and friends made fun of me or looked down upon me. Instead, what happened is that they now felt comfortable talking with me about it, and our bonds deepened.

You can open that same door in your own life. All it takes is a bit of swallowing of pride.

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23 thoughts on “Dave Ramsey and the Power of Community

  1. Greg says:

    While I agree with your general premise that a sense of community is the power behind the groups such as Dave Ramsey, I disagree that all those who listen and follow are in financial trouble. I own several successful businesses and am a multiple millionaire many times over. That said, I listen to Dave Ramsey’s podcast each day, I have listened to his Financial Peace University and my wife and I use these techniques with our kids. We do so, not because we are in financial trouble but more so to have a system to keep us on track and to live life with a sense of financial literacy. We do this also so as to teach our children how to live their lives. I will conclude by saying that the only blog I read cover to cover each day is yours.

  2. Doug says:

    That power of community also provides accountability. Weight Watchers is another group you might have mentioned. Members go in front of their peers, announce how much weight they gained or lost, and provide support for one another.

    I would argue that the accountability to the community is what accounts for the success, not the community in and of itself.

  3. Josanne says:

    I’ve also found that listening to Dave Ramsey has a way of brainwashing you, when you don’t find others around you that also want to be debt free. It really is nice to have a community tho, isn’t it? I’ve found others online that love Dave(which we do!), and I realize you aren’t just talking about Dave, but I am just saying when you are looking for community, sometimes it’s nice to be able to hook up with others of the same mindtrack online, if everyone around you locally is of the mindset that you’ll always be in debt, the economy is so bad that you can’t get ahead, etc. Those I have found over the past few years that want the debt free route sure are a breath of fresh air!

  4. Frugal Muslimah says:

    Hi,

    I am usually a silent reader of your blog (its one of my favourites, by the way), but I just wanted to throw this out since you said you haven’t solidified your conclusions on faith: have you ever looked into Islam? Like beyond the media-hype? I’ll just leave it at that.

    On the rest of the post, I personally like keeping my personal finance goals between me and my husband…..I like the thrill of secret accomplishments. But I think its am awesome idea to start a personal finances reading group…what a great way to learn and keep yourself and others motivated without breaking the bank! :)

  5. sheila says:

    I had been thinking about starting a money group for a long time but had been feeling some resistance when I tried to take steps to start a group.

    This week, I picked up Seth Godin’s book “Linchpins” at the public library. Godin talks about resistance, and how most resistance is not avoidance of actual danger (a saber-toothed tiger, for example) but is actually unwarranted anxiety. He encouraged readers to lean in the direction of our resistance and do what our “lizard brains” are telling us not to do, as that is the path that will lead to success.

    That was enough to get me off my duff and get started. I found on the we a coffee shop in a nearby town, one that has a small conference room where I could hold a meeting – I’ll be going to meet the owner first thing on Monday to look at the space and see what they offer on their menu. And earlier today, I e-mailed some people I thought might be interested in participating.

    But even if I hadn’t read the section on resistance in Godin’s book this weekend, your post today would have given me the same nudge I needed to get started. As it is, your post has given me immediate confirmation that I’m doing the right thing. Thank you, Trent!

  6. Roberta says:

    I agree with this post. I refuse to pay not only for Financial Peace University, but also for Ramsey’s book. His ideas are great, and I respect them a lot, but I checked the book out of the library. It seems counterproductive to me to spend $$ on things like this when I am trying to reach my financial goals.

  7. Greg H says:

    Trent, interesting post. Dave Ramsey was for me an effective though unlikely gateway to financial responsibility. When I first saw his show on Fox, a lot of his messages resonated strongly with me and inspired me to really take charge and get my financial house in order. However, I really didn’t care for his “tone”, and as a born again evangelical agnostic, I found some of the religous elements off putting. This lead to me to google search for people who disagreed with Dave’s views, which is how I stumbled onto a very well balanced critique of his stuff that you had posted. This was my first exposure to the Simple Dollar which I came to find meshes exceptionally well with me and where I’m at in my life (striving to get out of a moderate sized “stupid tax” bill with a pretty large shovel, to use some of Dave’s terminology). I think this is just an excellent blog, and you do a great job filling it with exceptional content. Thanks for all that you do and for providing a community of sorts for those of us that are less comfortable in church-based communities FPU creates.

  8. Janie Riddle says:

    Somewhat you are right about the community and I hope many will listen. My husband and myself are going to a celebrate recovery group. Many think these groups are for those with alchol or drug problems only. The one we are in is for any issue you as an individual needs to work on. 33 years ago I was hit head on by a drunk driver. My husband was told I would not live or walk if I did live. We needed a help group at the time but would not have physically or emotionally been able to go. Our church family have carried us many times. Life keeps so many struggling just to put one foot in from of the other. One day someone told me I was just not dependable. I was supposed to meet them to go somewhere with my children. I told them I guess they were right because it was easier than explaining to them that I could not walk that day. When I got up that morning I fell and did not even have the strength to call them and say I could not come.
    Thankfully, people are realizing they need other people again. You also need to make sure it is the right community for you. Look at all the children in the formal school community who are not learning to read and do math.

  9. Marsha says:

    I think that groups like FPU prosper because people feel more comfortable in a semi-anonymous atmosphere rather than revealing their darkest financial secrets to family and friends. Also, a lot of people believe “you get what you pay for,” so free advice isn’t worth much. Both of these attitudes can keep someone from being financially sound.

  10. JN says:

    Wow… thanks for the great idea. I was looking for some ways to market my financial coaching business overseas (military assignment) and a financial book club is just the thing!!!! Thank you so much!!!!!

  11. David says:

    While a sense of community for sound financial management is very important, what I believe is key to Ramsey’s success is motivation. The concepts Ramsey presents are nothing new — I’ve known about them for years. My problem however, has been implementing them and changing my financial behavior. Ramsey isn’t just offering a slick, expensive packaging of time-tested concepts, he is offering participation in a high-energy movement of people who are sick of being poor and in debt and who are going against the tide of society to live their lives differently. Yes, Ramsey is making money, but he is also changing thousands of lives in a way that few if any other Christian financial planners have been able to do. Ramsey’s success is not due to his community, but his motivation.

  12. SarahFae says:

    I agree with most of your post! Community and the sense of not being alone is very powerful in making change. I would argue that paying a nominal amount for classes or membership isn’t always a bad thing. In the case of FPU, Weight Watchers, or even the gym, sometimes when we pay for things we then feel a little more obligated to actually go and engage in the program. FPU is usually around $100 ($7.70/week) and helps people commit a little bit more to the process. Paying for help isn’t a always a bad thing.

  13. Ricardo says:

    I attended various groups throughout my life: Boy Scouts, Catholics, Mormons and the truth that I discovered is that these groups allow you to have a social life and be, at the same time, anonymous. It’s like being alone in the crowd. Anyway, if a person can meet friends and relatives to discuss their common financial problems, I´m sure he will be solving many other problems, too. A big problem is always the summ of several small unresolved issues (relationships, psychological, etc.). We must not forget that creating and maintaining such a group can also bring many problems, revive hidden wounds. Living in community is not easy. Also occurs to me that his own story (to solve yours financial problems) was fundamentally a alone one, both the initiative to go out of their problems and how to solve them daily. I´m not sayng that have to be so for everyone, I’m just pointing out that it was so in your case. Anyway, these are just some loose thoughts.

  14. Jessica says:

    @ Janie, sorry to hear about your accident. I hope all is well and you continue to prosper.
    Trent, I see where you are coming from with this. Why pay for FPU when you simply don’t have the money. The money you spend could be used towards paying down your debt. Since Greg has the financial means for this course then it is ok. I have to agree with Marsha too. A lot of people struggle with telling their family and friends their situation because some people look upon you in a negative way. When it’s a group of strangers, it is easier to let the cat out of the bag with people who are in the same situation as you.

  15. Basic money management is really a small set of skills that are available for free in many forms but for the person whose learning style and personality work best working in a supportive group, community programs like Dave Ramsey’s are great. A fabulous free or almost free resource are the programs offered by the Cooperative Extension Service housed at state universities in every state. Just go to extension.org to find the one closest to you. They have great free information, tips and forms online and you can learn about programs in your area. They are one of the best hidden gems we have in the States to help people manage their finances and more. I’ve also been told that in program evaluations that use Dave Ramsey’s program and Money Habitudes cards that the cards were rated as the activity that caused them to actually make changes. The cards made it easy and non-threatening to talk about money and understanding the frequently subconscious habits and attitudes influencing money behaviors provided the insights that allowed them to move forward and really get more out of the skill-based program. (www.moneyhabitudes.com). I created the cards, but the point is not a sell–just that it is really important for people to understand their relationship with money. Just learning skills doesn’t mean they will use those skills effectively over time. if money has been used to meet their emotional needs for recognition, control, trust, security, acceptance, freedom, etc. people need to understand that and be sure those needs are met in other ways. If they don’t have those insights, they will typically sabotage their money management plans in spite of good intentions.

  16. Rebecca says:

    I know I’m not the only one out there who has trouble with this because of shyness. Even when we attend community events, Hubby and I tend to keep to ourselves. Trying to get over this, but it can be very hard.

  17. Robyn says:

    I’m pretty certain I’ve even heard Dave say that the stuff he teaches isn’t hard to figure out — it’s mostly about the attitude. The value of FPU is largely in having the community and accountability. Our family is on track financially (debt-free but the house, saving for college and retirement, full emergency fund, living well below our means) but I like to listen to his show because listening to it and hearing the callers and Dave’s answers puts me in a mood to be aware of our money and save rather than spend. That’s also part of why I regularly read a few blogs on frugal living: they don’t usually tell me anything I don’t know, but they keep me in the right mindset when there are so many influences out there screaming, “spend money!!!”

  18. Sue says:

    Well thought out article, Trent. I’ve been comparing Suzie Orman to Dave Ramsey for several yrs–and have found both don’t really differ that much in their principles on managing your funds. The real key to successful money management is you have to want to do it–it’s all behavior modification. Unfortunately, due to current economic times, many families are forced into it–not having the time to really examine their finances fully and may join ‘groups’ who claim they can help them manage their funds for a fee. After a career in the securities industry, I’ve seen some families come out of debt, only to go back into debt due to bad spending habits they never overcame. Numerous studies have shown that many frugal children had a ‘frugal’ upbringing–these initial ‘saving behaviors’ started in the home early in life and stayed with them throughout their lives.

  19. Anne says:

    I shelled out the $100 bucks to take the FPU course at our church. I’m also really good friends with one of the “instructors”. Our take is that the fee gets you “buy in”. The old saying about “you get what you pay for” is a very true perception. It’s been our observation that people with major financial strife who get somebody else to pay their fee never completely “buy in” and make a commitment. In fact, they usually do not even complete the course. Having a group of peers who support you, well-presented materials, a logical flow of information and tasks/assignments are all a part of why this program is so successful.

    There are many, many things I disagree with Dave Ramsey about and he REALLY needs to update the course to reflect more current economic realities (such as his unrealistic rates of return) but his course does get people really thinking about personal finance, debt and what they want their futures to look like. That is a really good thing.

  20. Katrina says:

    My parents have done the FPU through their local church, and have raved about it. They liked the materials, because it gave them set forms to use and listed items they hadn’t previously thought about as expenses. Listening to them discuss ideas and topics brought up in class has been interesting, and has certainly benefited their finances & their grasp of the finances. What they truly appreciated was the way it opened their social circle to all sorts of individuals and couples – people they normally wouldn’t talk to or see at their church (and they are quite active there). The other thing they have enjoyed (feeding in to that level of semi-autonomy) was that they were able to give and receive advice from people who didn’t live in their exact box – there was always someone who had gone through a similar situation, and someone else who just provided them with an “aha” suggestion from outside the box (and vice versa). I think this aspect of the group is what truly expanded their thinking when it comes to money/savings/etc.

  21. RL says:

    I heard recently that FPU is about to be revised so at our church we are looking forward to seeing any new material.

    Regarding the $100 if a church or who ever is hosting the course really wants they can make it manageable. We tell our people that the cost is $100 or they can make payments of $25 at class 1, again at class 4, again at class 8, and after class 13.

    If that doesn’t work we and they can show real need for the class and that they cannot in any way pay for the course then we give them a kit, they sign a form committing to attend all 13 classes, and they agree to meet with our financial counselor, who has gone through Dave’s training program, for at least five sessions.

  22. Matt Jabs says:

    Point taken and mostly agreed with. That said, $100 is a small price to pay for a system and community proven millions of times over.

    Your proposal to form new communities through initiative is brilliant. My reservation is that many people are simply not self-disciplined enough to formulate their own plan and stick to it.

    I have been through FPU and actually just started leading it for the first time two weeks back. It’s pretty awesome to have a big group of people come to you for help, based on word of mouth from others. I am looking to formulate a plan of my own to help those close to me with financial problems… that group who doesn’t want to pay for or commit to a program like FPU.

    Godspeed Trent.

  23. Kris says:

    True, community is very powerful. And that can be good and bad. Not all financial advice fits every person’s needs. And not everything taught by the “experts” is good in all situations. So community without personalization can (not will, but can) be a negative.

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