The American culture of thrift disappeared organically, and it can be rebuilt organically by those willing to put in the work.
The American culture of thrift disappeared organically, and it can be rebuilt organically by those willing to put in the work.
I wrote last month about the myriad private-debt problems facing Americans, both as a matter of financial reality and on cultural grounds. At the time, the national focus with regard to “debt” was on the debt-ceiling debate. Now that the debt-ceiling crisis is resolved, for the time being, it’s worth revisiting the other debt crisis.
In a poll conducted by CNBC at the end of March, 70 percent of Americans reported feeling stressed about their financial situation. Fifty-two percent reported feeling more stressed today than they did before Covid; 58 percent considered themselves to be living paycheck to paycheck, and 53 percent reported having no emergency fund. According to the same poll, 61 percent of Americans recorded having over $10,000 in debt. This is not some secondary or tertiary problem in the minds of Americans, either; according to a Capital One CreditWise survey conducted last December, 70 percent of Americans rank finances as the No. 1 cause of stress in their lives. This culture of debt, while considered unavoidable by many Americans, has not improved our state of mind.
The premise that this lifestyle is unavoidable is wrong. At the risk of being biblical, I will note that there is truth to Proverbs 22:7; the borrower really is slave to the lender. Americans need not live this way. Keeping up with the Joneses is a choice, not a command. Nowhere is it written in stone that one has to use a credit card or take out a loan to buy the latest model of Chevrolet. Student-loan debt in the amount of $1.75 trillion is a problem not of mathematical necessity but of psychological conformity. Even if, as some have argued, this crisis is overblown, the societal notion that it is required and even good for an 18-year-old to take out $31,000 in loans for a degree is just that — a notion. The American culture of thrift disappeared organically, and it can be rebuilt organically by those willing to put in the work.
One such person is Dave Ramsey. Operating out of Franklin, Tenn., his company Ramsey Solutions provides financial and life-wellness advice rooted primarily in Christian teachings. His motto, “Live like no one else so you can live and give like no one else,” comes from personal experience that, after 2008, is all too familiar to many Americans. In the 1980s, Ramsey was a young real-estate investor who bought up $4 million in real estate. The bank he worked with changed hands after the Competitive Equality Banking Act of 1987, and in 1988 he filed for bankruptcy, unable to pay for the debt he had taken out on his properties. Four years later he founded Ramsey Solutions.
Rooted in the premise that a life lived debt-free is the best life, Ramsey’s financial-wellness programs revolve around seven “baby steps” that everyone can follow. At the base of it all is a very old and prudent idea: One should live on less than one makes and save for the future. This program is presented in a number of ways. Every weekday Ramsey and his co-hosts — the “Ramsey Personalities,” he calls them — host a three-hour radio call-in show to advise callers and listeners on their financial problems. (The show can also be found on most podcast services.) Ramsey has written a number of books in which he details his thoughts on financial matters. His company has also, since 1994, offered Financial Peace University, a nine-step video course on these teachings.
Ramsey advocates not only frugal and debt-free living — the “Live like no one else” part of his motto — but also for increased generosity. He is a strong believer in tithing, the act of giving the church 10 percent of one’s time or money. Going beyond the tithe, he advocates “outrageous generosity.” Culturally, this addresses a not insignificant issue. According to a survey published in 2022, one in five American Christians pay the full 10 percent tithe. On a broader scale, charity in America accounts for around 2 percent of GDP.
If success is a measure of impact, Ramsey’s has been substantial. Since it was first published in 2003, Total Money Makeover, Ramsey’s all-time best-selling book, has sold millions of copies. According to his website, nearly 10 million people have taken the course Financial Peace University. His radio show reaches 18 million listeners a week across all mediums and is estimated to be the second-most popular radio talk show in the United States.
Beyond his message of fiscal prudence and Christian generosity, Ramsey preaches (a more than appropriate verb, given his style) self-reliance. His talk show is ridden with tough-love conversations between him and his callers. The message is simple: You are at fault for your debt, and you will be the one to fix it. Ramsey is adamantly against America’s culture of economic dependence. Our cultural fixation with the idea that if we just elect the right person everything will be fixed is a problem, in his estimation. It’s easy to see why so many (myself included) find his work appealing. It’s also easy to note why such a message is needed in America broadly.
The message Ramsey promulgates is a forever relevant one, but in today’s culture of debt it is especially important. American financial culture needs a change, and that change begins and ends with private individuals willing to look the dominant culture in the eye and say no. It begins with people who, to borrow a phrase, are willing to live like no one else so they can later live — and hopefully give — like no one else.