The Hell With You Dave Ramsey (Again!), I’m Consolidating my Debts!

You will probably wonder what I have against Dave Ramsey to write two full post against this personal finance guru. Well I think over the years, Dave Ramsey got some fog into his glasses and don’t see quite clear anymore. I sometimes have the feeling that since it is part of his sales pitch, Ramsey go against banks and financial advisor a little bit too much these days. It’s not because a bank is offering a debt management solution that it is automatically wrong.

While I explain while I disagree with Dave Ramsey in regards to not paying your highest interest debt first. I found another point of debt management where I have to disagree.

On Ramsey’s website, he is saying that consolidating debt is not a solution to them off. He actually says that it only reports the problem later in time.

I have personally seen people getting squeezed by their debt and asking to remortgage their property in order to pay them off. What happened after has been described by Dave Ramsey: they continued the same way of living and get into more debts instead of using their free cash flow to pay them off… disappointing isn’t?

This is exactly Dave Ramsey’s point; if people are not serious about paying off their debts and managing their credit, there is no point of consolidating their debts!

But when you think about it, if you are not serious about taking care of your personal finance and manage your debts like a big boy, consolidation loan or not, you will end-up losing everything anyway. The only difference is that you would lose everything sooner without the consolidation loan

On the other side, if you are serious about paying off your debts and taking back your life, consolidating your debts will bring several advantages such as:

- Fixed monthly payment (compared to small payment required on credit cards).

- A known amortization (you will know exactly when your debts will be completely paid off.

- Usually smaller payments (because you will amortize it over a longer amortization period).

- Smaller interest rate (compared to regular credit cards for example).

Therefore, if you consolidate our debts and you cancel your credit cards, you will become in a much better financial position. In the end, it is a matter of getting serious about debt or not. However, there is nothing stopping you paying less interest on your existing debts once you have made that choice

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