Ramsey Plan 2.0 - Slack over Inaction
Are you feeling down on yourself? Do you think your decisions have been so stupid you'll never be able to recover trust in yourself? Well, I have a solution for you! Critically acclaimed Dave Ramsey will lead you to self-confidence! How you may ask? Simple, in his talk show about finances and basic money management, he takes calls from viewers with serious financial issues, mistakes so unimaginably stupid that you will never question yourself over minor mistakes ever again.
All jokes aside, I was quite the fan of Dave Ramsey's show for a while. He has a no-nonsense approach to everything and tends to stick with just pure facts and maths (unless politics are involved, read Painful Politics for that kind of talk). It's his maths that appealed to me for so long. He breaks down what seems like complex financial topics into the simple maths behind them. He has a heavy religious right-leaning bias but still sticks to logic when it comes to money.
Despite his views on politics sometimes heavily clashing, I love him breaking down someone's years of anguish and anxiety into a simple maths problem and just running the numbers to get the quickest solution. But it's here that I found myself having to break with him.
Dave Ramsey hates debt, abhors it, and makes a villain of it. And he's absolutely right. If you spend just a few hours listening to him, you will both hear enough basic maths and logic to realise how bad it is but also hear dozens of stories of lives utterly ruined by debt. Years of stress and anxiety, the inability to retire, to vacation, to just live life peacefully and make your own decisions about life. Listening to him will make you feel empowered to take control of your life and not let your money control you.
You will long for the inner peace of having a decent income and no monthly payments to worry about besides living expenses. He has a foolproof plan to get anyone to that point. And he's right with his plan, on paper.
There are two main paths to paying off debt
Snowball is the method he teaches, paying off the smallest debts first and using the momentum of freed payments to build up to larger debts. Then there's the reverse, focusing on purely the interest rate. The highest interest goes first. On paper, this is the fastest way as you will avoid more interest being added to the total and therefore pay less and be able to do it quicker. Same size shovel (income), a smaller hole to fill in because of fewer interest payments. But as Dave stresses, this only works on paper.
People are not robots, we have to be motivated, we need reasons to keep pushing ourselves, sacrificing finer things in life and living as low as possible to give ourselves the most room to attack the debt. Starting with bigger higher interest debt is good on paper, but in the real world, it's the gym membership of the finance world. Going in at new years with a hefty goal and not seeing quick progress, so you stop going. Dave argues the snowball method is better because it takes human nature into account. It allows us to build the momentum needed to stick with it.
At this point, I'm all in it with him
But again he's no-nonsense. He doesn't take excuses, he shoves you back in and tells you to keep running until the race is done. As he loves to say "beans and rice, rice and beans" because you need to sacrifice as much of your life as you can now to get out of the mess quicker and get to the point of building wealth and feeling at peace with your money. My issue is while he doesn't shame people for having trip-ups, he very much promotes his 'gazelle intensity' approach, because the more you sacrifice the better the plan works, the quicker you are the better, and the more wealth you can build. And again he's not wrong.
But what strikes me is that for his effort to take the human condition into account and use the snowball strategy, his intensity doesn't take that same thing into account. I can't follow his plan because I can't struggle and sacrifice for years without a rest to recover my energy. Dave doesn't leave room in his plan for rewards and breaks. And so I sacrifice and sacrifice. Gains are absolutely made, the maths doesn't lie. But I don't get this massive sense of accomplishment at each small change. I don't get the same dopamine he gets when the snowball gets a bit bigger.
Debt and ADHD
I'll be lucky if I get a hit of dopamine at the very end when I pay off the last thing. The process will drain me of all I have and produce little to no dopamine to keep me going. Another term for this is burnout. His plan is not designed with enough flexibility to prevent burnout in those who struggle to feel happiness or motivations or accomplishments. This affects not just me and those with ADHD, but those with depression, anxiety, and many other mental conditions. We try making baby steps, rolling that snowball. But we get tired quicker than others and we give up before getting anywhere with it. Then we feel an inevitable sense of shame that we couldn't even stick with it as long as most people who fail to stick with it. Cue the cycle of self shame and depression and further inaction.
I will be writing a follow up post to this with some ideas to how to tailor his logical plan to better fit those who don't always play by the logic everyone else does.
Comments
Post a Comment