6 Things I Don’t Agree With Dave Ramsey On

[Happy Friday! Got a juicy guest post for you today by fellow blogger and money coach, Christine Luken. Is Dave Ramsey right when it comes paying off debt? In this article, Christine Luken challenges some of his baby steps. I know many of you have opinions on Dave Ramsey, so make sure to stop by the comments after and share them with us ;) I couldn’t help but interject my own thoughts throughout as well – so hopefully you come away with some better insights after reading this! Enjoy!]


Sixteen years ago, I facilitated my first Financial Peace University (FPU) class.

If you’ve never heard of it, Financial Peace University is money guru, Dave Ramsey’s, cornerstone financial literacy course. Having been to financial rock bottom myself, I appreciated his no-nonsense, tough love approach to money management. In fact, I facilitated FPU for ten years, sometimes teaching the class multiple times a year at my church as an unpaid volunteer.

I was a such hardcore Dave Ramsey devotee, that I paid $2,500 to take the training that would qualify me to become one of his Certified Financial Counselors in 2008. I honestly didn’t plan on turning it into my full-time business, but here I am, almost seven years into my entrepreneurial adventure as the Financial Lifeguard.

I started out taking everything Dave Ramsey said as gospel truth, but after a decade of coaching hundreds of people on their finances, I not only started to ask the question, “Is Dave Ramsey right?” but I realized he’s simply wrong about a few things.

The late success expert, Jim Rohn, said something very profound regarding mentors:

“Don’t be follower; be a student. Make sure your actions are the product of your own conclusions.”

Based on my own experience and that of my coaching clients, I believe Dave Ramsey is wrong about the following six things:

#1. Using Cash Envelopes

It’s true that spending cash hurts (you literally experience it as pain in your brain), which makes it an effective budgeting tool. However, I don’t suggest that my coaching clients use cash for everything.

First of all, it’s inconvenient to do so when you want to make purchases online or you have to drag all three of your little kids into the gas station to pre-pay at the pump. And, depending on the neighborhood you live in, carrying around large amounts of cash might be asking for trouble!

Here’s what I recommend instead: only use cash for your spending categories that are out of control. For many of my clients, this includes eating out, groceries, and entertainment. Sometimes just having those on cash for a few months is enough to rope them back into the land of reasonable spending.

For my clients who are nervous about carrying around large amounts of cash, I propose a non-cash alternative. Open a separate checking accounting with a debit card for your discretionary spending money. This is the route I use myself. I have a certain debit card that’s used strictly for my splurge purchases.

#2. Cutting Up Your Credit Cards

Yes, there are some of you who shouldn’t be allowed within 500 feet of plastic. But most people can learn how to use a credit card responsibly even if they’ve misbehaved in the past. When I’m coaching clients with credit card debt, I suggest they temporarily “put them on ice,” and stop charging on plastic. We’ll move most spending to debit or automatic bill pay, and move their few out-of-control categories to cash.

Once my clients have reclaimed their financial dignity, I suggest they keep one credit card with a low limit. They can charge a few items they’re not tempted to overspend on, like gas for their car or their cell phone bill, to keep their credit score in a healthy range. (Your credit score affects your insurance premiums and is frequently checked by potential employers, so it affects more than just your mortgage interest rate.)

Then, there are people like my husband, the engineers and CPAs of the world, who are rarely tempted to spend more than they planned, no matter what payment method they’re using. Like Dave, I am firmly against carrying credit card debt, but I’m not opposed to using credit cards as a payment method.

#3. Paying Off Your Smallest Debt First

In many cases, this is a great idea. Having a quick victory gives you a shot of success and spurs you on to attack the rest of your debt.

However, when you have a debt with a massively high interest rate, you might be better off attacking it first, even if it’s number three or four on your list. Your smallest debt might be a medical bill with zero percent interest, but your third or fourth smallest debt might be a store credit card with 22% interest.

Another example of when it pays to deviate from the “pay off the smallest one first” philosophy is when you have a particular debt with “bad mojo.” When I broke off the wedding to my ex-fiancé 18 years ago, I hated making the payment on my Dillard’s account. Why? Because my ex racked up the majority of the charges (including my Valentine’s Day present) when he was an authorized user on the account. I paid that bill in full first and it felt so damn good to have it gone!

[EDITOR’S NOTE: My personal opinion here is to do the route that actually excites you the most – whether that’s the smallest balance or largest interest rate or any other variables, such as the ex-fiancé one. The last thing you want to do is *burn out* on paying off your debts, so if going one route motives you to the finish line faster even if it’s not the “financially smartest” option – who cares! Do it anyways!! It doesn’t matter how you get there, just so long as you do!]

#4. Never Buying a New Car Unless You’re a Millionaire

Far too many people are overpaying for their transportation needs, so I totally understand where Dave Ramsey is coming from regarding car loans and leases. But, I don’t think you need to reach millionaire status to buy a new car, especially if you pay cash for it and intend to drive it for a good long while.

Case in point – four years ago I purchased my second brand new Hyundai Sonata for cash. The first one I bought back in 2004 for $15,000 when the next year’s model came out, and I kept it for ten years. With 90,000 miles on it, I sold my first Sonata to a couple I knew from church for $5,000. When I walked into the dealership to purchase my next Sonata in 2014, I had $20,000 saved plus the $5,000 from the sale of my previous car. I paid $20,800 with taxes for my dream car, which left $4,200 in my new car fund.

If I keep my current car for 10 years, the average cost of my car ownership over 20 years will be $1,540 per year or $129 per month. You don’t need to be a millionaire to afford that!

[EDITOR’S NOTE: I’ll admit I’m a used car snob myself, but there is something to knowing the full history of cars and having some decent warranties come along with it. I’ve never bought a new car before, but I’ve also never paid cash money for one either – so if you can rock that and it’s a high priority for you, then more power to you! :)]

#5. Putting Your 401(k) Contributions on Hold While You’re Paying Off Debt

I have really strong objections to this piece of advice! Unless you are in a dire situation, most people can and should continue to sock money away for retirement, even while they’re paying off debt and building up an emergency fund.

For most of my coaching clients, income isn’t the problem; mindless spending is the culprit. Most Americans are way behind on saving for retirement, so I encourage my clients to take full advantage of their employers’ retirement plan, especially if there’s a match.

If cash flow is super-tight, I might suggest they decrease their 401(k) contribution temporarily, but keep it at or above the level necessary to qualify for the match. That’s free money, so it’s foolish to give that up, even for a little while.

[EDITOR’S NOTE: Yes!!! Even if you were to get the 100% FREE MONEY and then cash it out and take all the penalties that come with it, you’d *still* come out ahead by contributing to your 401(k)! Not that I’m suggesting you do that, but that’s how crazy leaving free money on the table is… I didn’t know Ramsey was pushing this one, talk about a one-track mind! Haha…]

#6. Pursuing Your Financial Goals With Maximum Intensity

You can’t sprint indefinitely, but you can keep up a marathoner’s pace for the long haul.

About two or three years after I started teaching Financial Peace University, former students would come to me for financial coaching. They’d say, “We did great for a year (eighteen months, or two years), but then we just fell off the wagon.” Sometimes they’d be in even worse shape than before they’d taken the class. What the heck was going on?

Runners know that trying to sprint for long periods of time is reckless and unwise. I prefer to take a more moderate approach with my financial coaching clients. There is room for portion-controlled fun in your spending plan!

I firmly believe that people can move towards their preferred financial future at a brisk pace while still enjoying life on the journey. Unless your income is very low, you probably don’t have to eat beans and rice or only wear clothes from the local thrift store, unless that’s your thing, of course!

[EDITOR’S NOTE: What helps me is thinking about these sprints in terms of “seasons”, as my friend Cait Flanders would say. The “season for debt killing”, the “season of hustling”, or even the “season for living more and relaxing.” I’m grateful for my seasons of hustling before the kids came, and now I’m grateful for being able to scale back more and watch them grow up. Intensity is great for short periods of time, but I agree with Christine that you can’t last forever turned up all the way.]

In Summary…

Is Dave Ramsey right?

I agree with most of Dave Ramsey’s money management philosophy. I consider him a mentor and he’s definitely taught me a great deal about personal finance.

However, like Jim Rohn suggested, I’m a student of many money gurus (including J. Money!) but I form my own conclusions. And I suggest you do the same!

As for me, I love it when my fans and followers disagree with me. My response is, “Good, you see things differently! Let’s discuss this so I understand your point of view.”

Who’s with me on these? Who wants to debate? :-)

Christine Luken, the Financial Lifeguard, is a money coach, speaker, and the author of “Manage Money Like a Boss: A Financial Guide for Creative Entrepreneurs” and “Money is Emotional: Prevent Your Heart from Hijacking Your Wallet.” You can find her at www.ChristineLuken.com, or on the previous guest post she did here: Financial Confessional: “I Was a Check-Bouncing, Collector-Dodging Accountant!”

EDITOR’S NOTE: I have to add here that Dave Ramsey’s daughter – Rachel Cruze – is also a personal finance expert in her own right. I never gave her too much credit before, but WOW did she blow it away during her keynote at this year’s FinCon conference… That girl’s a beast! And not afraid to poke fun at her “old balding” dad as well, haha… So if you hate Dave and have been asking yourself “is Dave Ramsey right?” it may be worth checking out his more modern (and millennial reaching) daughter instead –> RachelCruze.com

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  1. [HCF] October 19, 2018 at 5:53 AM

    I came here for the catfight but I see no space for argument here. Cannot do anything else just nodding on every single point. Great post, Christine and thank you J$ for bringing this to us ;)

    1. J. Money October 19, 2018 at 6:53 AM

      Haha, glad you liked man :)

      I have to say that I actually think Dave is great for the world and DOES help out tons of people, which is more than you can say for many others in this life, haha… So I’m def. an overall fan of his, but more so in the debt-killing department than the others.

      1. [HCF] October 19, 2018 at 7:46 AM

        The fact that someone isn’t right about everything does not mean he is a bad person or not good for the world. I think we are all like that. Probably I am wrong about much more topics than he :) His teachings follow one path of the millions. It does not mean that it is wrong just different. As we like to say here, FIRE is not a one size fits all recipe ;)

        1. Todd January 15, 2020 at 6:07 PM

          Having taught over 2,000 budgeting, credit building, and debt elimination workshops of our own design over the past 16 years, I have heard the question hundreds of times: “What do you think about Dave Ramsey?”
          I used to say that while I don’t agree with everything he preaches, I appreciate that he has at least made talking about money acceptable, if not sexy (now I know where to send people for the sexy part).
          Totally agree with the points Christine makes. Thank you for stating them so clearly. My main frustration is not with Dave but with those of his devotees who refuse to consider anyone else as a possible source of reliable or helpful information and tools. They hear me say, “We developed these workshops….” and they shut down. Aargh. Says something about the power of branding, too, doesn’t it?
          Keep up the great blog, Jay!

          1. J. Money January 16, 2020 at 7:08 AM

            Haha… yup! If you ask any normal person to name a famous “money person” Dave’s name is always one of the first to come up :) And he really IS good at motivating people to kill their debt, so I’m always more PRO Dave personally than anti, but from there it def. gets murky…

          2. sinisa karabatkovic February 27, 2021 at 5:15 PM

            Dave Ramsey, himself, wrote in his books that you should not take everything he is saying to the heart. You should read and listen to other sources, as he does, to make a decision. Fake news. A lot of omitted stuff. Man has $ 200 million in the bank. The man become a legend in short period of time. What is up with that?

  2. Grettman October 19, 2018 at 6:39 AM

    There are so many other things he says that are just so wrong.

    For instance, he is all for paying loads on mutual funds.

    He slams the government’s TSP fund all the time and highly recommends retired feds roll it into something else! If you are a fed and are smart, you know how dumb this idea is.

    He slams index funds all the time and suggests he can beat the market consistently by using active funds.

    He overstates how much income someone can pull from their investments. He often sights that a million dollars can throw off 70K per year…YIKES..

    1. J. Money October 19, 2018 at 6:48 AM

      Ahhhh yeah – the TSP is great! And also index funds, of course ;)

      That’s actually the main complaint I always hear on Ramsey too, so it was nice to hear others with this post for me since I’m not much of a follower of him though I do love what he does around debt.

    2. Christine Luken October 19, 2018 at 9:40 AM

      We could write a whole post about investing! I think Dave oversimplifies the subject and downplays the importance of the expertise of a financial advisor. Unless he’s changed his tune from the last time I facilitated FPU, which was probably 5 or 6 years ago.

      1. JB October 19, 2018 at 10:53 AM

        I still listen to him often. He still invests his same way he always has, but I have heard him pushing his ELP which includes Financial Advisors. I agree for the average person it is hard for them to ever maintain the high returns he describes.

  3. Karlene October 19, 2018 at 6:46 AM

    Hello J Money,
    Excellent article by Christine Luken. With her background as a FPU counselor it’s great to have her perspective on the program.

    Since my husband and I are older and have a massive amount of obligations (I prefer that to the “d_ _ _ _” word) I have wondered about all that & more, especially about the 401K and paying off smaller obligations with zero percent/low interest to higher interest loans.

    I, too, understand the reasoning behind paying off the smaller obligations first; it does feel good to be able to scratch something off the list. After paying off some obligations a couple days ago I decided (& my husband came to the same conclusion about the same time) to look into whether my husband can still take advantage of the 401K on his job. That’s my goal for today. However, I so badly want to be free of these obligations that I wish that we could just continue putting the funds to the next obligation on the list.

    Based on the financial pit that my husband and I have gotten ourselves into and how long it’s taking us to dig ourselves out if I could offer advise to anyone it would be: 1) Follow your gut.
    If it does not feel right to do something & you can’t find a way to get your point across, do some research into the topic. Maybe you can find others who support your viewpoint who can explain it in a more simplistic way. 2) Get good at saying no; after all, no is a complete sentence. 3) As soon as possible start paying yourself. 4) Once you’ve started putting $ aside/investing for your future, remember what it’s for, your future. DO NOT touch it! Because if you do “borrow” from yourself, the likelihood of repaying yourself is slim. I am not saying that you cannot or will not repay yourself. I’m just saying based on my experience stuff have a way of coming up and one thing leads to another and without proper planning that repayment might not happen.

    I could write a whole lot more on this topic, but I need to go. Thanks for sharing Christine Luken’s article on your blog. I really appreciate her perspective. Have a fantastic Friday everyone.


    1. J. Money October 19, 2018 at 6:56 AM

      LOVE IT!!!! And that you swap out “debt” for “obligation!!” Haha… totally making me smile over here, thank you for your insight and taking the time to stop by today :) Namaste right back at you.

      1. Karlene October 19, 2018 at 7:44 AM

        Thanks for your response J. Money.

        I attempted blogging a couple years ago, but stopped when life got in the way (this is my way of staying in the positive). Life is still challenging and I also realize that I am only getting older and need to do as my mentor suggested years ago, which is to take care of me first because that’s the only way I will really be able to help others. I am still helping others, but I am doing my best to put more attention on things that I wish to accomplish.

        I am in the process of restarting a new blog, and I might just write about our “obligations” experience (something I feel very strongly about) there and/or share it with your audience. Thanks for asking.

        By the way, it’s good that I read your email response to my comments first, because it did not all translate into your comments here on the blog post; like:
        What brought you to swap out “debt” for “obligation”?? I REALLY like that and feels much more empowering than icky, but super curious to hear the backstory on it :)

        I feel like others would too, and might be worth highlighting on the blog later?

        I really appreciate the articles you personally write and those of your guest authors. Thanks for all that you do to enlighten us.


        1. J. Money October 19, 2018 at 11:42 AM

          Please let me know the second it goes live if you go for it!! Would love to hear more of what goes on in your brain! ;)

          1. Karlene October 20, 2018 at 9:39 AM

            Will do J. I appreciate the support; it means a lot especially from one of the few personal finance bloggers who I consider a mentor of sorts; you are in my mind anyway :)

            I appreciate how you seem to be doing things your way, which is one of the things I hope to accomplish with my new endeavors. Thank you for your energy & output.

            1. J. Money October 22, 2018 at 7:25 AM

              I’m rooting you on!!

              1. Karlene October 23, 2018 at 9:57 AM

                Much appreciated. :)

      2. Christine Luken October 19, 2018 at 3:19 PM

        Yes, I love that you use the word “obligation”. Our language around money is so very important and it’s something that I teach in all of my classes and with all of my clients.

        1. Karlene October 20, 2018 at 10:48 AM

          Thank you Christine Luken. Yes, I, too agree that language plays a big role in our health and well-being.

          Several years ago, when I started waking up to the seriousness of our financial quagmire I realized that I had to do what I could to help my family remember that we are ultimately responsible.

          We can disagree with company X’s tactics, and we might be right. And, maybe one day the people in company X will gain a conscience & change their tactics. In the meantime, it is in our best interest to repay company X (and anyone else) as quickly as possible.

          The freedom that comes with paying off an obligation is worth it.

  4. whiskey October 19, 2018 at 7:07 AM

    Dave’s advice helped me and my wife get ourselves righted. At that moment in our life, many many years ago, what he said rang so true and it worked for us. We did not spend a bunch of money, we just bought the book and lived it.
    I still listen to his broadcast or youtube him from time to time. And still respect what his message is. His co-host Chris Hogan has a commanding voice and he makes some valid points as well for retirement.
    Whether you love him or hate him, you cant deny that he has made an impact of many many people.
    Like it was stated above “follow your gut”.

    1. J. Money October 19, 2018 at 7:16 AM

      100% agree – he has done worlds of good for those stuck in debt, without a doubt.

      Can’t tell yet how I feel about Hogan as my only experience with him was at FinCon where he put on a pretty good keynote performance, however afterwards when personally meeting him he seemed a lot less authentic. I’m guessing/hoping he was just worn down and in “auto” mode, but his overall message and aura is definitely uplifting so giving him the benefit of the doubt for sure.

      1. Christine Luken October 22, 2018 at 3:42 PM

        I have to say, I LOVE Chris Hogan! He was one of my trainers for my counselor certification, and he is an amazing guy. His backstory is that he used to collect on delinquent mortgages for a bank. Could you imagine him coming to your door to collect?!

        1. J. Money October 23, 2018 at 7:04 AM

          Haha no, I cannot! I bet he was pretty successful at it though! ;) I do love his aura he gives off, was just hoping to have more of a real/normal conversation when we chatted – but maybe next time.

  5. Millionaire Dojo October 19, 2018 at 7:10 AM

    I started to learn about money by listening to Dave Ramsey.. Then luckily my friend and I were talking about money one day and he asked me if I had heard about Mr. Money Mustache. I hadn’t read any money blog at all before that and now I’ve started my own lol. I definitely had to reprogram my brain and get some of these points you made in your post out of my way of thinking. My favorite point was number 2. Gotta have my cash back/travel rewards! Sorry Dave!

    1. J. Money October 19, 2018 at 7:19 AM

      You can probably have about 10 posts like this on Mr Money Mustache – hah!! And I love every bit of it – that’s what makes this community so great: so many different (strong!) opinions on this stuff! Though I def. lean more MMM than I do DR for sure… Totally different target audiences though too.

      1. Millionaire Dojo October 19, 2018 at 9:08 AM

        Haha, true. I guess that’s why they call it PERSONAL finance. Everybody has their own unique situation so you aren’t going to be able to agree with every bit of advice you hear. I definitely still follow some of DR advice and I disagree with MMM on budgets. I also don’t ride a bike anywhere but I live in a rural area lol.

        1. J. Money October 19, 2018 at 11:43 AM

          Yeah – the bike thing usually makes it or breaks it for new readers haha… Those riders are hardcore!

  6. Bryan October 19, 2018 at 7:29 AM

    I don’t know anything about the dude. I read J, MMM, ERE, and save/invest 58% of my income. Solid.

    1. J. Money October 19, 2018 at 11:44 AM

      You’re pretty good with those guys :)

    2. karlene October 20, 2018 at 11:10 AM

      Hello Bryan,
      I look forward to getting to be like you, J. and others who are crushing it in the personal finance field. Congratulations on saving/investing 58% of your income.

  7. Team CF October 19, 2018 at 7:48 AM

    It’s hard to disagree with so much reason. Well written post, takes the personal side into account on finances. Very smart!

  8. Drew October 19, 2018 at 7:53 AM

    1-4 are to get people in bad situations on a corrected courage quickly. 5 is definitely bad advice for those that have a match especially.

    Marathons are harder than sprints because the length is so hard for the brain to gauge and to pace ourself accordingly. The better metaphor is financial independence and security is a marathon. Paying off $15k in debt may be a sprint. I think you should sprint to get out of debt and then settle in to a sustainable savings lifestyle for the marathon to financial independence, security, and retirement.

  9. Stephen @ the FIRE Lane October 19, 2018 at 7:53 AM

    Dave helped me when I was first getting into personal finance and I still use many of his principals in my life.

    I completely agree with each and every point above. As another commenter mentioned there are a few other things that he gets wrong. 12% investment averages? Investing with loaded funds using his recommended brokers? 10% giving while climbing out of debt? Plus he can be “just a tad” too far to the right, so much so that I can’t listen regularly anymore.

    1. J. Money October 19, 2018 at 11:46 AM

      He’s definitely good at marketing and infusing personality, that’s for sure ;)

    2. Debora October 25, 2018 at 12:19 PM

      I was a huge DR fan for a long time. Years ago he was always on a rant about the taxes he and other rich people pay and the percentage of people that pay no taxes. Well, I pay taxes, my fair share. I don’t have an accountant to fancy things up for me or hide money. I’m retired and pay what I’m supposed to. We’re now finding that a lot of rich people aren’t paying their fair share and some even owe back taxes! And many in the real estate game pay none at all! To say I’m outraged about that is an understatement. I still listen from time to time but he sure list me on that one.

  10. Mr. r2e October 19, 2018 at 8:00 AM

    Great post. What you are doing is personalizing the program for people. Sure you could take a cookie cutter approach and just apply the ‘thou shalt’ rule but you are recognizing that some are able to adapt the program.

    1. Christine Luken October 19, 2018 at 3:25 PM

      Thanks, Mr. r2e! I work with my clients a lot on their emotional money triggers and delving into the root of the money issues, not just the symptoms. If someone is overspending on restaurants, sure, I could tell them to switch their dining out budget to cash. But what if they’re eating out because they’re single and lonely? Or they have 3 kids and a high-pressure job with no time to cook? You need a tailored solution to deal with the root cause of money issues, not just strategy. But I’m fascinated with the psychology of money… I could go on for days! ;)

  11. Erika October 19, 2018 at 8:07 AM

    I am so happy you shared this! I share many of the above opinions about Dave Ramsey’s stuff. “Extreme Money Makeover” really helped me, but only when I made adjustments to make it work for me. I read it right after I read “Your Money or Your Life” and found that juxtaposition helpful in keeping my own needs and reality in check while reading Dave.

    1. J. Money October 19, 2018 at 11:48 AM

      Did you know there’s a new and updated version of “Your Money or Your Life” now? Haven’t checked it out yet but it looks good :) –> https://amzn.to/2pZ1E8u

  12. J.D. October 19, 2018 at 8:09 AM

    Eight or so years ago my wife and I were living the “normal” paycheck to paycheck lifestyle. We had $20,000 debt plus the house. We would not pay a bill occasionally and bounce a check here and there. Dave Ramsey saved us from that, literally!
    I think Dave is great for people in situations similar to ours (or worse). Someone once said (I think it was Zig Ziglar) “If you aim at nothing, you will hit it every time.” Ramsey is great at getting people on a basic plan, and his plan works.
    However, once I figured out what to do and did it for a few years I was in a much better financial position. Now, I still love DR but am willing to untie from the Ramsey dock of financial literacy a little bit to set sail in the ocean of financial prosperity. And in that ocean there are many ships that will lead me to my destination.

    1. J. Money October 19, 2018 at 11:51 AM

      Yup yup – very well said.. He’s great at shocking you back into reality and getting your ass in gear, but then good to keep your eyes open and see what other paths lie ahead.

  13. Laurie@ThreeYear October 19, 2018 at 8:17 AM

    I so agree with the advice about not putting your retirement savings on hold! My husband and I went through FPU ten years ago and luckily paid off all our debt, but I wish we hadn’t put our retirement savings on hold because we’d have a lot more money now if we hadn’t. Like Christine points out, most debt situations are the result of sloppy spending habits, and we could have still paid off our debt while saving for retirement at the same time. Great advice about being a student and coming to your own conclusions!

  14. Francis October 19, 2018 at 8:31 AM

    Excellent post and can agree with most of your points especially the new car purchase. We purchased a new 2008 Acura and currently have crossed cross over 115,000 miles. The only thing we’ve done to it is to change the oil regularly, routine maintenance wash and hand wax it. I’m shooting for 200,000 miles before we replace it. Perhaps the hybrid technology choices will be better in 2021.

  15. Angie Pannkuk October 19, 2018 at 8:35 AM

    My favorite financial guru is Gary Keesee. Yes, he shares a Christian perspective like Dave Ramsey, but his story is remarkable. He went from being super broke to a multi multi millionaire and teaches you how he did it. My favorite book of his is Money Mysteries of the Master, but he has others.

    1. J. Money October 19, 2018 at 11:54 AM

      Oh cool, never heard of before – thanks! Just googled and he actually looks a LOT like Ramsey too – hah!

  16. Paul October 19, 2018 at 8:47 AM

    Dave Ramsey’s advice is targeted to the lowest common denominator. Designed specifically to appeal to the most amount of people (and consequently, the most amount of money to his bank account). He clearly has a place here though. For example, my sister in law was probably the worst person I have ever met when it came to money management. I gave her a copy of total money makeover and now after years of effort she’s completely debt free. While I wholeheartedly agree with the argument in this article, its a bit like learning to run before you can walk. I think Dave Ramsey is getting a lot of people in the game that otherwise wouldn’t be here. Its not till you get a hold of basic concepts that things like benefiting from credit card rewards, etc.. become even a possibility without falling back into the consumerist trap.

    Based on what I have seen, Dave Ramsey bring a lot of people to the table, but its not till you’ve thoroughly eaten what hes serving that you discover, oh, there’s another restaurant with way better food just right next door and wait, the food here is even better.

    1. Christine Luken October 19, 2018 at 9:33 AM

      Very true, Paul! Dave’s advice is a great first step in the right direction. And I love the restaurant analogy!

    2. J. Money October 19, 2018 at 11:56 AM

      ****slow clap****

  17. Joe October 19, 2018 at 10:47 AM

    I agree wholeheartedly. Everyone has to find their own path.
    You have to get started somewhere and Dave Ramsey’s book is as good as any place.
    Most people’s finance is such a mess that anything helps.
    Once the finance is in a little better shape, it’ll be easier to learn more.
    I like all of your modifications. Those are great.

  18. Candice October 19, 2018 at 11:15 AM

    I love this! We did the Financial Peace classes…8 years ago, I guess. Back when we had 4 children under 7, a fixer upper, and an income of $40K with just as much in debts. It was great, but everyone around us was making leaps and bounds and there were some months when we didn’t make any progress. How do you make cheap food choices when you are already eating rice and beans? Or how do you sell assets that put you in debt when you don’t have boats or extra cars? Many Ramsey graduates still don’t understand that not everyone can succeed in a year or so. That has been the most frustrating part for me – Ramsey really pushes the idea that anyone can do this in a very short time.

    But, it gave us a vision and a hope, so here we are almost a decade later, in a new (but less-so) fixer upper with $200K equity (we sold the other one for twice the cost to buy it and fix it up), and the kids are more expensive than ever, but more income, too. Down to just a car loan and student loans, and then goodbye, mortgage! And when husband lost his job this past July, we have had enough to live on until he starts his new job next week. :) It’s a good place to be, and it started with Dave Ramsey, but it’s ending on our own terms.

    1. J. Money October 19, 2018 at 11:58 AM

      YAYY!!!!! Love that there was a happy ending to the start of this story ;) Although really it’s just a *beginning* but yes – it doesn’t always come fast for people! Especially with a billion kids in the mix!

  19. Tyler Feldt October 19, 2018 at 11:23 AM

    I agree with the article, and with a lot of the comments here. I think Dave Ramsey is great for introducing you to the basics of personal finance, for providing a clear gameplan, and for getting you fired up – that’s exactly what he did for me as I started getting serious about money two years ago. I appreciate his stewardship approach to money and his no nonsense/get after it/you’re not a victim mentality. And I think his Baby Steps generally capture the order in which you should primarily focus on each financial goal. As I’ve grown, learned, and sought other resources, however, I realized that I disagree with some of what he teaches. As Christine alluded to, I disagree with his thoughts on putting off retirement investing, toxic debt (my fiance and I have some wedding debt that will be the first to go when we say “I Do”), and disregarding FICO scores/responsible credit card use/moderate and affordable vehicle payments/purchases. I also HATE that he doesn’t promote index funds and his asset allocation recommendation (stocks only across 4 major categories) may not make sense for everyone. I prefer to take a more balanced approach – my primary focus is on debt, but I’m also investing a little for retirement, saving a little, and enjoying some. I don’t think my life/other financial goals should be completely put on hold due to debt as long as I’m moving forward. And I think it’s so important to read as much as you can on this subject to find the mix that works for your unique situation. Thanks for the article, Christine, and thanks for all you do J Money!

    1. J. Money October 19, 2018 at 12:00 PM


  20. Julie Grandstaff October 19, 2018 at 12:32 PM

    Dave get’s a few other things wrong in my opinion. Or maybe they just haven’t been updated. $1,000 is not enough of an emergency fund. Instead your fund should be based on your non negotiable expenses. If you have high debt, minimum payments could exceed your emergency fund. Also you should at least be getting your company match in your 401(k) while paying down your debt. Dave also suggests you can earn 12% on your investments, and that is simply dreaming. I do like Dave’s just do it approach, but he’s not right on everything.

    1. J. Money October 19, 2018 at 4:04 PM

      Yeah – 12% is just bonkers. Especially *consistently*.

  21. Eric @ Flip n Finances October 19, 2018 at 1:59 PM

    When I was 19, I started listening to Dave all the time at work and my co-workers would always give me a weird look and moan and groan that Dave was on again. I’m a big fan of him and for the work he does.

    We can’t agree on all the money topics since we are all different. Like you said using cash for everything is near impossible. My wife and I tried using it for simple things, but it just isn’t the right system for us. We use cards and digital tracking method which works best for us.

    You have to take the advice with a grain of salt and do what works best for you!

    1. J. Money October 19, 2018 at 4:04 PM

      I WISH I listened to more productive stuff like that when I was 19!!! Took me another decade to finally catch on, haha…

      1. Christine Luken October 21, 2018 at 3:49 PM

        Totally agree with J. Money! How I wish I would have followed smart money advice when I was 19! I didn’t hit rock bottom until I was 26. But if that never happened, I wouldn’t be the Financial Lifeguard! ;) Now I use all my crazy stories to help others.

  22. Joan October 19, 2018 at 3:05 PM

    I used cash envelopes for my flexible spending and I like groceries in that kind of thing I don’t care what those around unless I intentionally intend that day to save food shop then I’ll take my my grocery money with me and then at the end of the day when I’m home I take it out of my wallet I do leave a few bucks in my wallet but I don’t be caring or that cash I leave it at home unless I intend on using it that envelope that day

  23. Doug October 19, 2018 at 11:29 PM

    Never taken his course but as far as from the investing side he is more of a trader than investing for the long term. His financial peace is good for the most part I’ve heard.

  24. Debbie October 20, 2018 at 6:45 AM

    Okay, where would you start with this situation? A friend of a friend is retired with heavy credit card debt. She bought a house 18 months ago when interest rates were low (moved to a cheaper part of the country). She wants to refinance her mortgage to a higher interest rate to pay off the credit cards. Meanwhile she wants to buy a new TV for her bedroom even though she has an extra one that can be moved from another room. When I heard this story, I thought who refinances a 30 year mortgage to a much higher interest rate to pay off credit card debt? So where do you start with someone like this or is it too late to teach an old dog new tricks??????
    Thanx for the great article which I agree DR is not for everyone. We use a 2% cash back credit card for almost all our purchases. It adds up fast. We pay the balance in full each month & never pay interest. I don’t even know what the interest rate is on that card!

    1. Christine Luken October 20, 2018 at 11:43 AM

      Debbie, it sounds like your friend probably NEEDS Dave Ramsey’s tough-love approach! The problem is that no one’s going to be able to help her rectify her money situation until she admits she has a problem and is really ready to do the hard work to change.

    2. DLK October 20, 2018 at 11:00 PM

      Ha, makes me think of a facepunch from MMM!
      Obviously she needs to NOT buy a new TV and probably a lot of other stuff. Instead putting the money on her credit cards and keeping the low interest loan she has. But you can’t tell some people much…..I personally would ask her how she plans to make the larger mortgage payment she’ll have after pulling money for the credit cards out. Sadly, not much else you can do unless she sees the light.
      I would also ask about her cell phone plan. I would bet she could save a ton by switching to
      Metro pcs, Ting, Republic, many mvno. If she could save $50+ that way and apply it to cc debt, maybe she’d start to clue in?

      1. Debora October 29, 2018 at 4:24 PM

        Agree. She not only seems to not have a good grasp of money, she’s digging herself into a deeper hole. Can she attend FPU? It sounds like she didn’t need a new house but rolling CC debt into it does not change the behavior and the CCs usually get charged right back up.

        Has she read any money books? Has she done a budget and knows where she stands financially?

  25. Tony October 20, 2018 at 7:57 AM

    Great post. Would like to comment on a few points. The car example: The last several times I set out to buy a used car, I ended up in a new car. Certain very desirable models retain much of their value for the first 3-5 years of ownership (Prius, Camry, etc.). I got a 2007 Camry and still have it today with 101K miles. Then we got a 2011 Prius and have that still running with 105K miles. As long as they keep running, we are saving the extra in 401K, Roth and more. So, while I would not advocate buying a new BMW SUV, choose wisely young Skywalker.

    Oh, and if Dave Ramsey can find me a better safe bond fund that the G Fund, I am, as Ross Perot said, “all ears.”

  26. Murdock October 20, 2018 at 1:21 PM

    Dave Ramsey and his Total Money Makeover book (as well as Financial Peace University) are great for those searching for the how and why of getting and staying out of debt. Once you’re out of debt and ready to seek financial independence and the freedom in life it provides, I highly recommend the teachings of J.L. Collins in his book The Simple Path To Wealth.
    These 2 books can absolutely change your life.

    1. J. Money October 22, 2018 at 7:27 AM

      Agreed. JL Collins is DOPE.

    2. Tom B January 29, 2020 at 2:25 PM

      I concur! Started with DR and advanced to JLCollins. Recommend to anyone!

    3. Keelan Muscara October 15, 2020 at 6:09 PM

      HUGE J.L. Collins guy! Makes it so easy now to recommend investing books to friends. It’s a no brainer.

  27. Mr HM (Phil) October 21, 2018 at 2:51 AM

    My main gripe with Dave is his advice on where to invest your money. Managed funds in Australia are very expensive with far poorer returns than ETF’s or LIC’s. Dividends growth investing (100% doable in Australia) of Vanguard/iShares low cost ETF’s are a far better choice I feel.

    1. Christine Luken October 21, 2018 at 3:46 PM

      Quite a few people disagree with Dave regarding his investment advice. I agree with you on the low cost EFT’s!

  28. Michael Of Murphy On Money October 21, 2018 at 7:01 AM

    Good post and I fully agree. Some of his concepts are great in theory but may be more trouble than they are worth – like using cash envelopes and no using credit cards at all. My wife and I have undeterminable credit after living debt free for years. It hasn’t really affected us but the fact we have no credit score at all is a little unsettling. I support your coaching advice, keep a card or two open for credit score sake. Honestly, I think I’d feel better about our finances if we had a few credit cards!

  29. Andre Bothma October 23, 2018 at 1:59 AM

    Yeah I literally agree with everything here. My wife and I work Dave Ramsey’s steps (with a South African point of view), but have made some tweaks of our own.

    We use cash only for groceries and entertainment. Everything else is paid via EFT or card payments. The budget keeps things in check.

    As you’ve mentioned, most clients don’t have an income problem, they have a spending problem. Same in South Africa, and those who DO have an income problem – it’s as a result of either point blank laziness or the socio-economic environment.

    1. J. Money October 23, 2018 at 7:05 AM

      Heyyy – thanks for chiming in from all the way over there!! South Africa represent!

  30. Chris October 23, 2018 at 11:13 PM

    I have never bought a brand new car. I’m not saying I never will. But I think it would be very interesting to also not only consider the price of a car but the more expensive insurance of having a newer car. Also, sometimes when a car gets older, sometimes we only carry liability. I would be more liable to buy a new car if I didn’t put a lot of miles on it. We live out in the country, so we put more miles on a car than some people would.

  31. Chris October 23, 2018 at 11:15 PM

    As far as Dave Ramsey goes, his advice is probably really great for people with no money management skills – a starting point. Most people reading this blog are pretty savvy when it comes to money, thus even the ability to critique his approach. :)

    1. J. Money October 24, 2018 at 9:57 AM

      Truth :)

    2. Ben October 24, 2018 at 4:00 PM

      That’s a fair point – bring it Dave, you’ve nothing on the FIRE community.

      *disclaimer – just some fun at the end of the work day.

  32. Brittany October 24, 2018 at 9:04 AM

    “Don’t be a follower, be a student” my sentiments exactly. I think many of us who start on Dave are first so hardcore Dave then we start branching out into other bloggers/ideas and form our own opinions and that’s okay. We recently started contributing to our 401k with match again and I definitely feel like a goof for every stopping. I’m grateful for what I’ve learned with Ramsey’s teachings, but I’m glad we’re all able to think beyond one opinion as well.

    1. Christine Luken October 26, 2018 at 6:38 PM

      Brittany, Good for you on restarting the 401(k) contributions! Don’t beat yourself up for stopping. I find it’s much more productive to put your energy into changing the things you can control instead of beating yourself up over past mistakes.

  33. Jaquetta Turner October 24, 2018 at 1:15 PM

    I definitely agree with number 2. You should at least have 1 credit card for emergencies, reservations, etc.

  34. Mrs. Money October 25, 2018 at 11:15 AM

    I personally don’t feel in our case that we will be killing ourselves to pay our mortgage off early. We have such a low rate that it makes more sense to put that money we would put towards our mortgage into IRAs, or other investments. Of course I would LOVE to be mortgage free, but I feel like if we put more into our IRAs we will end up ahead in the long run!

  35. Danielle Ogilve October 27, 2018 at 8:20 AM

    I agree with you on #6 (amongst a few others)! Going full force with pursuing your financial goals can either be intimidating or lead to some sort of burn out. Going at your own pace is more ideal.

  36. Colin November 26, 2018 at 4:17 PM

    Big time agree with #1 and #2. I just wrote a post about this and stumbled on your article during my research to make sure I wasn’t just making stuff up.

    “As for me, I love it when my fans and followers disagree with me. My response is, “Good, you see things differently! Let’s discuss this so I understand your point of view.””

    I think tolerance for others’ opinions is really going out the door. I really appreciate you ending with this statement.

    1. J. Money November 27, 2018 at 10:07 AM

      “I just wrote a post about this and stumbled on your article during my research to make sure I wasn’t just making stuff up. ” Haha… I do that all the time too :) Especially when you’re about to drop something controversial!

  37. tom haws January 29, 2019 at 7:57 PM

    Dave Ramsey is great for people who are financial illiterates. I have accumulated almost 6 million and the only DR advice I ever followed was to get out of debt. I did borrow for a business and took a mortgage on a house. I have invested in mutual funds (defintely no 5.75% front loaded DR funds), individual stocks and municipal bond funds (a DR no-no), use credit cards with cash back for everything, and never ever ever use worthless debit cards. There is absolutely no advantage whatsoever to using a debit card over a credit card. There are numerous advatages of a credit over a debit, which I won’t discuss here. DR main issue is degrading index funds and referring everyone to his conflict ridden ELPS so that they can sell you something so DR can get a kickback. He fancies himself as an investment and denigrates the great Jack Bogle and Warren Buffet and implies that he knows more about investing than they do. Did I make clear that I am not a DR fan?

    1. J. Money January 30, 2019 at 9:51 AM

      Haha we hear you loud and clear!

      Most of us would agree with you on his investing advice as well :)

      If you ever want to share how you amassed that beautiful nest egg of yours, we’d love to hear it!

  38. Anonymous August 31, 2019 at 1:07 PM

    I think much of the reason Dave Ramsey seems to give advice that appears extreme in regards to money has much to do with his own personal experience when he went bankrupt at 28. He’s mentioned it before on his show. I myself have two degrees in Psychology so I can kinda see that that life event must of effected him so drastically to the point that that’s why he gives such drastic advice. I personally love Dave Ramsey but do agree he could be be a little more on the conservative side with his personal finance advice.

    1. J. Money September 2, 2019 at 10:45 AM

      Excellent point!

  39. Bill January 3, 2020 at 4:40 AM

    It is possible to make 12% or better on your investments most years. Not withstanding a recession or other market hit. With todays resources it’s easier than ever. Select your favorite broker or other market search facility. Search for all mutual funds within your parameters: no load, low expense ratio- 1.5% or less and minimum investment amount requirements. I invested my money in six funds in 2019 and my results were as follows: 31.11%, 30.22%, 28.49%, 28.47%, 19.25%, and 15.88%. My two lowest were slow starters. I do recommend sorting the mutual funds again quarterly and rebalance, if necessary. It is important to pay attention how the markets are doing so you purchase your mutual funds in the sectors that are strong or improving. Not those declining like Retail in 2019. That’s my take! Good luck!

  40. squire January 4, 2020 at 4:49 PM

    Buying a “used car” can made sense but buying an “almost new used car” doesn’t. Most 1 or 2 year old cars carry the same rice tag.
    A new car might sticker for $25k but can be bought for $22k (or less), fast forward and they offer a 10%-20% off sticker (depending on model and miles) not the actual purchase price. Only a fool would pay sticker price on a new car.

  41. Tom B January 28, 2020 at 3:58 PM

    Really enjoy this debate and appreciate this blog!

    I and many others owe a ton to Dave Ramsey for helping us with his no BS approach to get out of debt. I would recommend him to anyone who is lost financially.

    Later I’ve realized Dave can be a bit closed minded and a tad thin skinned when others question his method (Speaking of closed minded don’t get me started on Suzy Orman- just listen to the Paula Pant podcast with her on it-will make you sick).
    I would argue after baby step 3 some people may have better options investing their money and that is OK if you continue to stay out of debt. I completely disagree with his opinions about index funds.

    I love that this community can agree to disagree yet not subscribe to the cancel-culture we have currently in our society. Ramsey has helped millions get out of debt and take on personal responsibility, but I just simply disagree with his advice on investments. No reason to throw Dave out with the bathwater. He’s trying his best to help.

    I have a feeling part of it is he doesn’t trust the people who made all these poor decisions to not make future poor decisions. I get that.

    But I’m moving forward with my own plan investing in low cost index funds and acquiring rental properties BEFORE I pay off my mortgage. We will see what happens.

    1. J. Money January 29, 2020 at 5:43 AM

      Rock on, brother…

      Nice to hear from someone who’s been helped by him :) I agree he’s an excellent starting point for getting your $hit together.

  42. Justin Cupler February 12, 2020 at 8:16 PM

    I wholeheartedly agree with all but one of your anti-DR stances. That is the 401(k) contributions vs. debt repayment.

    As a financial writer, I always advise my readers to avoid oversimplification of this topic and look at the actual numbers. If your monthly 401(k) match and ROI exceed your monthly interest charges on your debts, keep investing. With credit cards in the 20% and up range these days, that is rarely ever the case. And with companies getting cheap on 401(k) matches — mine is 50% of 1% — this is becoming even less likely.

    Why would I continue investing only to get a total 10% return and pay out 27.9% interest on my debts? the math generally makes no sense.

    Think about it… if you have $10,000 in CC debt at 27.9%, you are paying $2,790 in interest per year. If you make $50K a year and get a 50% match on your 401(k) at 6% of your salary (that’s very generous), you will net $1,500 in “free money.” Add in a generous 7% return on your investment over the year, and your total yearly return (interest and match) will only be $1,815.

    Sure, this will compound each year, but you are looking at just around $127 per year in compounding interst. It would take a loooong time to overcome that massive interest fee each year.

    Now, if you sink that $3,000 per year ($250 per month) you were contributing to the 401(k) into your $10K in debt, you will pay it off in just 29 months and save over $32k in interest, which is about $13K in interest per year saved. That’s nearly 10 times the return on the 401(k) with the match included. Hands down, paying off your debt is a better situation in this case.

    And in nearly all cases, stop investing in your 401(k) and sink every last penny into your debts.

  43. Larryft06 March 20, 2020 at 1:02 AM

    Concerning #5. Putting Your 401(k) Contributions on Hold While You’re Paying Off Debt. If this was done during today’s COVID-19 pandemic, you would be in a world of hurt. I just got a layoff notice today, and don’t know when I will go back to work. If I did not have my debts paid off and have an emergency fund. I would be in a bad situation. The Dave Ramsey baby steps worked for me since 2004 because there is a spiritual concept behind the Baby Steps as well as statistical ratios that make it work for 80% of the people that follow it. You are the 20% (Pareto principle) Shown below is my story using the Baby Steps.
    This presentation is my account of how I came to the realization of why I was always behind the 8 ball financially. It was because of debt and my wife and I keeping our finances separate.
    In January of 2005 I was organizing the financial information for the preparation of the 2004 tax return. To my amazement, I found that during the 2004 year I and my wife’s income was just over $100,000 before taxes. I proceeded to add our joint income for the previous years from 1999 to 2004. It came to more than $540,000. I was stunned. Where did that over half a million dollars go? What did we have to show for it? As much as I could tell, it was debt. How did we get into this mess? Why were we always broke? When we added our debts together they totaled over $68,000 not including the house mortgage.
    When Barbara and I were married in 1992 we kept our finances separate. Since I was coming off of a divorce from my first wife, I had debt and alimony payments. Because of these issues, that is why we decided to keep our finances separate. Since I my income was more that Barbara’s we divided the bills proportionately according to our incomes. We both had car payments, so each of us paid our own car note. Since I made more money, I paid the house note and purchased the groceries. She paid the utilities and paid for household items and housewares. We each paid our own car insurance.
    The disconnect in our separate finances caused us to build separate lines of credit and separate paths to going in debt. This disconnect had each of us thinking our debt was under control because one did not know what debts the other had accrued. At some point in time, about 2002 or 2003 Barbara decided to work an extra job. I thought it was to earn extra money for Christmas spending. Little did I know that it was to mask over spending. I myself had run up credit card debt on household items for repairs and my hobbies of wood working, golf and liquid libations. But I thought I could handle the additional debt. What I did not expect was that the interest rates on multiple credit cards kept increasing from single digits to double digits, eventually some credit cards to more than 27%. I thought I could borrow my way out of debt. So I took out lower interest credit union loans to pay off higher interest credit cards. But all that did was extend the amount of time that I remained in debt and I still had credit card and personal loan debt.
    Looking back to January 2005 I started listening to financial guru Dave Ramsey on the radio. I had seen him on a CBS feature on starting the New Year right by getting your finances in order. It intrigued me so much that I had to learn more about controlling my finances and not letting them control me. Dave Ramsey prescribed what he calls the Baby Steps. The Baby Steps are no quick fix. They involve a lot of hard work over a period of time. But in order for them to work, both Barbara and I had to work together and combine our financial life sans debts. To start the Baby Steps, we first had to commit to living on a budget and learn how to use budgeting tools. I also took on an extra job to help pay down debt by working part-time at Radio Shack. We have found that there is also a spiritual component to controlling ones finances. So I have shown below the Baby Steps with some bible passages inserted that illustrate the point.
    How to get out of debt, stay out of debt and prosper
    The Baby Steps
    The famous Dave Ramsey Baby Steps…yes, we know it’s a borrowed catch phrase from the wildly successful 1990’s movie, “What About Bob?” but the concept really is a good idea. The best way to beat debt and build wealth is one tiny step after another. As Dave likes to say, “Do you know how to eat an elephant? One bite at a time.”
    The Baby Steps are no quick fix. They involve a lot of hard work over a period of time. But if you work the plan, it will work for you…every single time. And trust us, being debt free, being on the other side – is a wonderful feeling. It’s all worth it. If you’ll live like no one else, later you can live like no one else!
    1. $1,000 in an Emergency Fund

    After you do your first budget, save up $1,000 as fast as you can. Just take care of the essentials (housing, utilities, transportation, food, and clothing) and make the minimum payments on your debt until you get the $1,000 saved up.
    Why have an Emergency Fund?
    An Emergency Fund will help you keep your head above water while you’re getting out of debt. As soon as you start this journey, life will happen. Murphy’s Law goes into effect. Murphy might even move in with you.
    For example, your refrigerator might break down but guess what? You have an emergency fund to take care of that so you don’t have to stop your debt snowball.
    We should make plans–counting on God to direct us. – PROVERBS 16:9 TLB
    2. Pay off all debt (except the house) utilizing the “Debt Snowball”
    The debt snowball is simple, yet effective. First, list all your debts smallest to largest. Next, make minimum payments on all the debts except the smallest one. Put as much money as you possibly can on that debt.
    Once the smallest debt is knocked out, carry the money you were putting on your smallest debt up to the next smallest debt and attack that one.
    Over time, you’ll knock out debt after debt until they’re all gone!
    The rich rules over the poor, and the borrower becomes the lender’s slave. The Lord will open for you His good storehouse . . .bless all the work of your hand. . .you shall lend to many nations, but you shall not Borrow – PROVERBS 22:7, DEUTERONOMY 28:11 NAS.
    3. 3-6 months expenses in savings for emergencies
    Once your debt is gone, build a larger emergency fund of 3-6 months. This emergency fund is important as it will serve you in case loss of employment occurs. This fund allows you to continue living the way you are without stress and fear. It gives you time to choose your next step and place of employment. It allows you to stay on the plan.
    A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. – PROVERBS 22:3 TLB
    4. Fully fund 15% into pre-tax retirement plans and ROTH IRA, if eligible
    Once you’ve reached this point, it’s time to put a little away for retirement! Take advantage of your company’s 401k if they have one; put money in mutual funds…whatever it is, just start putting away 15% of your income.
    There is precious treasure and oil in the dwelling of the wise, but a foolish man swallows it up. – PROVERBS 21:20 NAS
    5. College funding
    You have kids? Guess what…high school graduation comes before you know it! What better gift to pass on to your children than a college education. They might not understand now, but they will someday!
    Let each of you look not to your own interests, but to the interests of others. – PHILIPPIANS 2:4 NRSV
    6. Pay off home early
    It’s time to own a home! On Baby Step 6, you pay off your home as fast as you can. Put as much extra money as possible toward your house payment.
    Once that house is paid off, you just gave yourself a raise because you have NO PAYMENTS, BABY!
    7. Build wealth!
    Keep socking away money and making it work for you so that you can retire with dignity.
    By the time you hit Baby Step 7, guess what has happened? You lived like no one else so that later you could live and give like no one else.
    Don’t forget to be kind to strangers, for some who have done this have entertained angels without realizing it! – HEBREWS 13:2 TLB.

    1. J. Money March 23, 2020 at 7:42 AM

      This is great man, thanks for sharing your personal thoughts on this! so glad it’s helped you out like that! Might need to re-share this on the blog to remind people of these steps as well as another “side” to it all :) Look for an email from me…

  44. Kyle April 22, 2020 at 5:14 PM

    I wonder why people always feel the need to mention a well known individual’s name when making a point. Why can’t you just mention those points without saying Dave’s name and how wrong he is? Why not just say, here’s why you should dot dot dot, fill in the blank. Seems like a pretty lame thing to do for anyone making a point about something. You shouldn’t have to bring someone else’s work down to uplift your own.

    1. J. Money April 22, 2020 at 5:32 PM

      That’s what we do in all of our other 9,000 posts :)

      The point of bringing up Dave Ramsey or any others is to compare our thoughts on their specific tips/advice so the community can get more perspectives… Especially when those experts tend to be pretty hardcore on their stances.

      Bloggers will do the same thing to other bloggers too in our community which is great! The more opinions the better so readers can come to their own conclusions!

  45. nimaj May 1, 2020 at 6:13 PM

    Great article! I agree with the advice and think it is a good middle ground that many people can be successful with. Self control is something to be learned, and it goes a long way. The rules can be relaxed some (per this article) if self control is not a problem.

  46. Jana May 13, 2020 at 11:48 AM

    My husband and I have been Dave Ramsey-ish for about five years.

    #1. Using Cash Envelopes —> Agree. We’ve never done the cash envelopes. Just way too much work.

    #2. Cutting Up Your Credit Cards —> Disagree. Getting rid of credit cards was extremely freeing for me.

    #3. Paying Off Your Smallest Debt First –> Agree. We worked the “debt avalanche” method rather than the “debt snowball.”

    #4. Never Buying a New Car Unless You’re a Millionaire –> Disagree. Used cars are where it’s at – no sense driving around a huge chunk of your net worth.

    #5. Putting Your 401(k) Contributions on Hold While You’re Paying Off Debt –> Agree. I won’t pause my 401k for anything.

    #6. Pursuing Your Financial Goals With Maximum Intensity –> Disagree. But only because I’m a maximum intensity kind of person haha.

    1. J. Money May 13, 2020 at 11:56 AM

      Fun to read – thx for sharing!

      I’m typically a “maximum” type of person too :) And also switch where my maximum’ness is going when I’m bored, lol…

  47. Devin July 21, 2020 at 7:32 AM

    Miss Christine,

    Great article, thank you for your insight. I am a Dave Ramsey fan, but do not agree 100% with all of his teachings.

    I especially enjoyed reading all of the comments, it is nice to read all of the different perspectives.

    Thank you again,


    1. Christine Luken August 17, 2020 at 9:37 AM

      You’re welcome, Devin! It’s important to learn from the experts, but not to blindly follow their advice as gospel.

  48. Paul Strauss August 15, 2020 at 3:22 PM

    With respect to #3, I agree with the basic premise of the DR approach– there’s something about seeing a small debt disappear while simultaneously watching the next smallest debt start to go away faster by applying the payment on the first one to the next and so on. However, what always miffed me about DR is that often in the same breath he will put people on extreme financial crash diets– all of the sudden you’re supposed to work 9 jobs, we’ve sold the car at a loss, moved into our parent’s basement and eat rice and beans beans and rice and you’re not going to see the inside of a restaurant or go on vacation for 3 years. Poppycock. This approach doesn’t work for the same reason (he says) the debt snowball does. It’s just inconsistent.

    1. Christine Luken August 17, 2020 at 9:41 AM

      I agree Paul! The extreme financial crash diet approach is why the vast majority of people don’t stick with his program. It’s teaching people binge-and-purge financial behaviors, rather than teaching people how to be financially healthy. They only know the 2 extremes! I knew there were shortfalls to his approach when my first wave of coaching clients were people who had complete Financial Peace University but fell off the wagon. And some of them were worse off than they were before they took the course!

  49. Paul Strauss August 15, 2020 at 3:35 PM

    I also seriously don’t understand why on the one hand he says cars depreciate 30% the day you drive them off the lot (actually, they don’t– it wasn’t even really true during the height of the popularity of this notion in 1975) and on the other hand tell you to pay cash for a car? I got .9% (point nine percent) financing in June of 2012 on my Honda Civic EXL. At the time, the DR’s of the world would have said “pay cash for a used car” or “fix the old one”. My options were $15,000 cash for a 2010 with just shy of 30K miles on it, repair the 1997 with 213K miles on it for $3,800, or sell the 1997 to a tuner for $5K (Honda Civics are in HIGH DEMAND if you know how to find the niche market that loves them) and finance a brand new, ain’t nobody ever broke the leather in it but me, 0 mile 2012 in June of 2012. I went with the last option. Still have it– now has 117K miles on it. Every dollar I paid on that 60 month .9% simple interest loan was worth less than the dollars I borrowed. I still had my $15K cash to invest- which I did. In fact, I even speculated with some of it buying gold and bitcoin– nothing I couldn’t afford to lose– and I used the proceeds of both to pay off all other debts and buy a REALLY nice car, but that’s another topic. The point is that I would NEVER come cash out of pocket for a crap purchase like a car. I look at it like this: if you wouldn’t sell $30,000 worth of your retirement fund to buy a car, then you shouldn’t pay cash, either.

    1. Christine Luken August 17, 2020 at 9:43 AM

      I’m not against buying new cars, Paul! I’ve bought two brand new Hyundai Sonatas and they’ve been amazing cars for me. I did save up and pay cash though. :)

  50. David Mann October 29, 2020 at 5:23 PM

    Like most people that have studied DR, I understand that his advice is very specific to a group of people. My main issue is when he says people that don’t agree with him are not smart. I would like to invite Dave to please look up the word “arbitrage,” If a car loan is at 1% and according to Dave you can make 12% on your money. If you take out the car loan and investing the rest of the cash Dave wants you to spend on the car you make 11% a year on the money you borrowed “arbitrage”. It seems smart to me to help your money work for you. This idea also works for home loans and a reason the 15-year loan might not always beat a 30-year loan. But as Dave would say “I am not smart,” Hopefully, math and a time value of money calculation will prove me right. It will also work if you only average a 6 or 7% gain on your money.

    I fully agree Dave does help many people with some good advice around overspending, Unfortunately, It is also obvious his main focus is to sell his product, not give his clients the best possible advice he can on their whole financial picture.

  51. David Mann October 29, 2020 at 5:32 PM

    To truly find out where the break-even point of paying off the debt vs continuing to fund the 401k is you need to run a time value of money calculation using the number of years to retirement as a guide. For someone who said “I always advise my readers to avoid oversimplification of this topic and look at the actual numbers” it seems you might be doing just that in your example. Straight-line math does not account for the compounding effect of money growth in later years.

  52. modviz November 11, 2020 at 8:01 PM

    I agree with you on the 401(k) contributions. If someone is in debt and their company has a match, put in a least enough to get the full match from the company and use what’s left to pay down debt.

    Matching contributions are basically a risk free rate of return.

    1. Joel November 12, 2020 at 12:47 PM

      Yep. This also slowly teaches people how to invest, which is important because once their debt is gone they’ll already be familiar sumwhat with putting money into investment vehicles. 401k matching = free money!