Dave Dogs Debt
Two trillion bucks. That's a lot of CDs and DVD players.
That's where American consumer debt now stands, and it's not a good thing. PBS has dubbed our our spending culture "affluenza," and the media has noted this trend has even spawned phrases like "debt stress."
It's finally catching up with us. The National Retail Federation, which has every incentive in the world to be optimistic about the state of merchandise sales, this week predicted that 2005 consumer spending will rise at only half the rate that it did in 2004. Unfortunately for retail, which accounts for something like two-thirds of the economy, consumers are expected to rein it in perhaps because they're realizing that their savings balances are inversely proportionate to their ballooning debt loads. Most people in this country are one paycheck away from losing their good credit and maybe even their homes. It's a depressing reality.
Which is why we have a certain understated respect for Nashville's own Dave Ramsey, a syndicated radio show host who counsels everyday folks about how to protect themselves from their own worst instincts—and how to dig themselves out of financial abyss. He is to the financially feeble what Dr. Laura is to the morally bankrupt. We usually use this space to rail, but this week we're taking a break from that to give a guy his due—and to remind prolific card swipers that it's not too late for New Year's resolutions.
Forget Alan Greenspan, Bob Novak and that bald bespectacled NBC guy who goes on the Today show to talk about markets. Debt sucks the life out of people, and Ramsey helps this debilitating handicap by sounding off on 200 radio stations every week. He preaches "financial peace" and conducts workshops from which the average family goes on to pay off $5,300 in debt and save $2,700 within three months (this according to his Web site, and we have no reason to doubt it). At the age of 26, he had $4 million worth of real estate. By age 30, he was a pauper. He calls his a "riches to rags to riches" story.
True enough, Ramsey is also man of God, sprinkling his financial advice with lessons about spirituality and how to incorporate that into family budgeting and wealth building. But, while he probably wouldn't want us to say so, we're here to tell you that the religious stuff is something you can take or leave. And though we're fans, the same goes for lots of his other platitudes. For example, Ramsey's big on the envelope system. Determine your grocery budget for the month and put that cash in the envelope. Don't spend beyond it, yadda, yadda, yadda. Another mantra: never purchase a new car, as buyers eat the depreciation. Or, don't use a credit card, even if you think you can pay it off.
It's safe to say that most of us don't use the envelope system or reject credit cards altogether (though the business practices of many card issuers are loathsome). Those of us at the Scene have even been known to buy a new car or two. But Ramsey's basic talking point—that is, don't spend beyond your means—is one people should hear.
Stay tuned next week for a return to regular programming.
