Dave Ramsey – My Thoughts

I’ve been reading a lot about Dave Ramsey in the personal finance blogosphere lately and I thought I would share a few thoughts about him.
For those who aren’t familiar with the name, Ramsey is an American personal finance “guru” who promotes a fairly simple approach to dealing with excessive spending and debt. Dave Ramsey’s methodology is outlined in his financial planning course, Financial Peace University.

Dave Ramsey’s Baby Steps

  1. Make a commitment to get out of debt
  2. Start a cash emergency fund
  3. Pay off debt using a debt snowball
  4. Save 3-6 months of expenses in savings
  5. Save 15% of household income into retirement savings accounts
  6. College funding for children
  7. Pay down mortgage quickly
  8. Build wealth and give

I disagree with Dave Ramsey

Anyone who has been reading this blog can probably figure out that the Ramsey method is not something I would ever use. I don’t have problems with excessive debt or spending, I like my credit card for convenience and never carry a balance. I don’t have a cash emergency fund and have no problem with moving unsecured debt to my home equity line of credit. I also use borrowed money to buy investments. The idea of paying off lower interest debts before higher interest debts makes my blood run cold – however as a certified financial geek who measures his MERs to the nearest thousandth of an inch, even I have to admit that not everyone in the world thinks the same way I do. 🙂

All of these things that I do go against the “Ramsey” way but that’s ok because I’m not in need of any kind of financial rescue. I haven’t always been financially responsible however – my “turn around” occurred about twelve years ago when I finally clued in that I had to spend less than I earn and needed to pay off my debts. Even though I don’t agree with Ramsey’s specific methods, I think that had I been exposed to him before my turnaround, he might have been able to help me, since his fairly basic methods were a huge improvement over how I had been dealing with my finances.

I believe that for a lot of people, Ramsey’s methods can be very beneficial. It doesn’t matter if not every detail is perfectly accurate or maybe doesn’t fit every situation exactly, for someone who is literally drowning in debt and can’t find the way to the surface, Ramsey might just be their saviour.

Here is a great series on Dave Ramsey and his financial methods by the M-Network:

More information

A plan to be debt free – Learn how to pay off your debts.

21 replies on “Dave Ramsey – My Thoughts”

My feelings towards Dave Ramsey are the same as your’s. He’s not for me, but I think he could help some people.

His ideas are definitely more useful for negative networth individuals rather than positive networth individuals.

Your views are very similar to my views, and pretty much because I am not in debt. I’m not an expert by any means, though… and I always try to keep an open mind.

It’s also good to know the basic theory that helps many others because inevitably you will find someone very close to you who needs this kind of information. 🙂

Mr. C – exactly.

FB – there are a lot of rules and steps for his method.

Patrick – good point – I know more people who would benefit from Dave Ramsey than they would benefit from my financial advice!


I think it’s a good program – if you stick to it, it’s guaranteed to work, and it’s not as hard to stick to as other slightly more beneficial methods.

It’s not the only good way of doing things though. And it’s not as bad as A.A., another method that devotees believe is the only way of doing things.

I think Ramsey’s plans are sure way to be well off financially so that is good. Their are no gemics and if you follow it you will be better off 100% that is the positive.

Now if you just follow his plan(s) then you are leaving yourself short. I think you should think about his plans as the base of your financial house. Then you start adding on lays of complexity to improve your return. At least that is what I think about when reading his books.

Plonkee – agreed that it works but is not the only way (but try telling that to a devotee!)

Pete – I think one of the strong points of DR’s program is his motivational ability which is a pretty good thing.

ME – I suspect that a lot of Ramseyites probably figure things out for themselves once they get out of debt and start investing.


Well said Mike… beauty is in the eye of the beholder. I related to everything you said about yourself, except I don’t use margin anymore. And I agree Dave Ramsey’s methodology serves a vital purpose for those that need serious help getting on track.

Chalk me up as another in your boat. It’s funny that all the PF bloggers are responding with the fact that we don’t think that way; but when you think about it, PF bloggers are GOOD with their money.

That’s why people read our blogs! Yes, it would be interesting to read the blog of a person that is immensely in debt, I’ve read a few, but that isn’t to learn, that’s to investigate and maybe help.

Dave Ramsey as a whole isn’t my guru, but I agree, is certainly helpful to a niche, but not ours necessarily…

I’m a DR fan although I haven’t drank the Kool-Aid to the dregs.

@ Mr Cheap: I’ve been a successful investor since long before I ever heard of DR, but still had the ball and chain of debt dragging me down. There’s lots of positive net worth persons who are DR fans.

DR is especially good at helping ordinary-income Americans to get their house in order and become prosperous. He shows how to do it in such a simple (but not easy) way, that a person gains HOPE. It’s Practice the goat vs. the gazelle and the cheetah. DR fans know what those things mean. LOL

DR also understands event risk, a sophisticated concept that can be done with MBA math, but is also accessible to all by listening to one’s heart and gut.

Life is also a great teacher, if you refuse to learn the easy way. 14 months of unemployment and underemployment taught me a lot; as did fighting with an insurance company to pay for my cancer treatment bills totalling over half a million dollars. (All paid up and current now, as of last week.) Actually, I used skills learned from how DR coaches people to stand up for themselves against misbehaving bill collectors. I was all over Humana like a dog with a bone!!!

I don’t think DR’s way is the only way, but a lot of PF gurus/authors start with advice targeted at people at Baby Step 4…they totally ignore the mess people are in and have no help to offer how to get that under control.

BTW I’m debt free today! Paid off the student loan…tired of having it around like a buzzing gnat.

I’m debt freeeeeeeeeeeeeeeeeeeeeeeeeeeeee!

I think Dave is OK, but just think every time he sells a book or makes an appearance he’s going to the bank with some poor souls money. Yeah I think he’s come up with a good plan and he benefits the most.

Love Dave Ramsey’s approach… It’s a clear-cut way to live worry-free about money.
I am currently on Step 6, myself.
I’m blogging about how I plan to pay down my mortgage by age 30.
Check it out if you want.
I am living a happy life, and now a less materialistic one… thanks to Dave.
And I didn’t have to buy any of his books because all the information is available online. Bonus!

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