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Why Dave Ramsey’s Advice Does Not Work For You

Dave Ramseys Advice
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My community needs nurturing and safety around money.

 

Dave Ramsey is the most well-known person in the personal finance community. However, his advice hinders my community because it leaves them feeling hopeless. His advice comes from a privileged point of view and fails to support immigrant communities.

 

Shaming my community does not empower them to learn about money.

 

It is important to have people of color talk about personal finance without shaming, guilt-tripping, and understanding diverse backgrounds.

 

Challenges Faced By Immigrant Communities

 

Family Support

 

Families who have migrated to the United States desire to support their family in their home country. This might include supporting elderly parents or grandparents, funding the family’s education, or funding their immigration process. Prioritizing these needs, my community goes against Dave Ramsey’s advice.

 

First-generation and eldest children often support their parents, meaning whether they are in their birth country or the U.S., they tend to help financially to make ends meet.

 

Financial Literacy Barriers

 

My community faces a language barrier, and our parents’ generation needs access to financial literacy education in their first language. What ends up happening is that it skips a generation, and now the first-generation and eldest children adopt their parents’ money habits or are presented with the opportunity to start learning about financial literacy.

 

First-generation and eldest children are learning how to manage their money, save, pay off debt, and make their money grow for themselves and their parents because they are their retirement plan.

 

Uncertain immigration status

 

My community faces uncertainty regarding immigration status. While white people worry about saving and paying off debt, my community worries about being employed and paying their current bills. It is not easy for my community to increase their salaries.

 

First-generation and eldest children carry the responsibility of living the American dream for their parents or simply getting out of being low-income. This often leads to student loan debt, not choosing a career that pays high salaries, or avoiding higher education in general to work and start providing. They are figuring out the system alone and need more resources and tools to make informed decisions that impact their lives.

 

Diverse financial goals

 

My community’s goals are different because of our backgrounds. These include travel or building a home in their country because that may be where their parents will retire.

 

First-generation and eldest children are between building the American dream and working towards their parents’ wishes.

 

Family Sacrifices

 

My community has seen their parents sacrifice to place food on the table or pay bills.

 

My community has had their parents say no to things they wanted as kids.

 

My community has experienced living with various family members to be able to afford rent.

 

My community has lived in unlivable spaces because rent was low.

 

Therefore, simply telling them, “The only time you see the inside of a restaurant is if you are working there,” just does not work.

 

Alternative Approaches For Immigrant Families

 

Emergency fund

 

You can be flexible about how much you save but know that 56% of Americans do not have a savings of $1,000. Step one to saving $1,000 is to set an amount you would like to save monthly and send it to a High-Yield Savings Account.

 

Step two is to save three to six months of living expenses.

 

Paying off debt that works for you

 

Choose a method that works for you: Snowball or avalanche

 

The snowball method – List your debt from lowest debt to highest. You concentrate on paying off your lowest debt while paying minimums to the rest of your debt.

 

Once you are done paying that off, move on to the second lowest debt. The more debt you start canceling, the more money you have left over each month to send to the next debt.

 

The avalanche method: List your debt from highest interest to lowest interest. Concentrate on paying off the debt with the highest interest rate while paying minimums on the rest. Once you are done, move on to the second-highest-interest debt.
Any extra cash you want to send to debt, depending on which method you choose.

 

If you are super duper disciplined, choose the avalanche method because, mathematically, it will save you money. If you need to see small wins to keep you motivated and on track, the snowball method is for you.

 

Planning to pay off your debt allows you to enjoy life now. This makes for a sustainable plan, rather than one that is restrictive and unable to get ahead because you give up. It does not have to be all or nothing.

 

Community-based financial education

 

Learning about money in a setting where you see yourself represented is key. The information will feel within reach, and it will be empowering to know that many people in our community want to get ahead by utilizing money as a tool. You can find these opportunities in community-based organizations, the library in your neighborhood, your bank, online communities, etc.

 

These different options empower our communities to make informed financial decisions that align with their unique goals and circumstances.

 

Helping Family Members

 

Create options rather than dependency on you. Help yourself first. Yikes! Culturally, we have been conditioned to help our family. However, exhaustion and putting your goals on hold are not options.

 

Expand your money possibilities by thinking about how to expand your resources rather than simply giving or making more money. In this way, both parties get ahead financially versus only one person.

 

It is important to acknowledge that one size does not fit all, especially within the immigrant community. By understanding and addressing the unique challenges faced, we can empower more families and individuals to build generational wealth. Whether it is normalizing their fears and shame around money or saving and paying off debt, my community can navigate their unique financial journey with more confidence.

 

When we work together:

 

  • I help you create a plan that works for you to reach your financial goals
  • I help you create options for your family and create dependency from you
  • I help you find a balance between your work and enjoying the present while you experience less stress

 

If this resonates with you, I invite you to work with me! It would be an honor to be part of your money journey. Book a sales call.

 

I cannot wait to be part of your journey!

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ABOUT AUTHOR
Orlenda Cortez

Welcome to my corner on the internet! I’m obsessed with using money as a tool because it led me to pay off $30K in consumer debt in a year and a half, helped me save $20K in nine months to have my dream wedding in Costa Rica and is helping me build the life I never saw my family experience. Now I want to help others do the same!

Orlenda Cortez
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