by Beks
I received a lot of comments over the years that I should stop listening to Dave Ramsey. There are better, faster, easier methods to pay debt, earn, save, and grow money.
Why do I still listen to him? Two big reasons…
1) I’m debt free and I’ve stayed that way for 5 years. It’s like telling someone who lost a ton of weight that their diet plan sucks and there are better ways to lose weight. I’ve lost the ‘weight’. I’ve kept it off. The method was effective. To me, that’s kinda all that matters.
2) 2017 happened. I had the money to pay off my debt in 2016 but ‘Dave said’ to push pause on paying debt when pregnant and pile up the cash just in case something went wrong. I had three very healthy, very easy pregnancies up to that point. This just seemed like bad ‘Dave’ advice. Way too conservative. Then my son’s heart stopped. Emergency c-section. NICU. Rough recovery. Never once did I worry about money because I had plenty piled up just in case. I was able to solely focus on my son. It was worth every single extra penny I paid in interest.
Dave is very low risk. He leans heavily on Tortoise moves. Sure, I could do WAY better, more complicated, things with my money than pay cash for my house. I could finance it and invest that cash. There ARE better financial moves. Moves that involve more risk and more reward… but quite possibly, more loss. But here’s where I’m at. I can own my house outright. I can continue to invest 15% in retirement. I can continue to only buy things I can afford.
…And I’ll retire just fine.
I choose the tortoise.
Beks is a full-time government employee who enjoys blogging late into the night after her four kids have gone to sleep. She’s been married to Chris, her college sweetheart, for 15 years. In 2017, after 3 long years working the Dave Ramsey Baby Steps, they paid off more than $70K and became debt free. When she’s not working or blogging, she’s exploring the great outdoors.
Popping in to say once again for those who don’t know, Dave Ramsey is a sexist, misogynist jerk. No one should ever give him a penny for his books or work. Google “dave ramsey misogyny” and see his laundry list of transgressions against women for yourself. Not to mention his backwater beliefs – men and women at his company aren’t even allowed to be alone together.
Lots of other financial writers have the same advice to give without the harm and right-wing evangelism.
Ha, I love this comment! His covid beliefs and response are garbage too
I totally get what you are saying but that doesn’t change financial wisdom for me. The financial advice is what I follow.
Yep, his trash response to Covid and other beliefs have ensured that I won’t bother with him. I’ve read a couple of his books and even though he has some good advice, I won’t contribute to promoting him. Bleck.
I benefited from his program years ago and have loosely followed him since then. I usually don’t boycott companies or take a stand on leadership drama, but the way the company treated Melissa Hogan vs Chris Hogan was a deal breaker for me. Everything that has come out since then has made me glad I stepped completely out of that sphere. I personally can’t even listen to him because I don’t want his numbers to increase so he gets more as revenue. I understand some people may solely follow his financial advice, but it reminds me of people who say they just read playboy for the articles. No offense to you as a person, but I’m personally debating if this blog is even worth following anymore if it’s endorsing DR.
Your statement is a bit flawed and, in my defense, I’d like to explain why that’s important. The mission and vision of Dave Ramsey is to help people gain financial freedom. The mission and vision of playboy is misogyny. You have lost some respect for me (and this blog) because of some of the side values of DR and in all honesty, I’m sorry, I haven’t heard about those things. I have no idea what you are talking about with the Hogans. It’s like being upset that I read playboy after they had an article on women’s empowerment when all I’m there for are the nudes.
Is it fair to say that I should ‘read the articles’ before I put on my stamp of approval, yes. You are right. But I didn’t. And I probably should do more research but it’s just not where I spend my time.
What I should clarify is that I support the conservative financial beliefs of DR because they work for me.
If you haven’t heard of these things then you should do some googling and educate yourself. It’s funny you say it’s a false comparison because Playboy is misogynistic when DR is a huge misogynist. There are plenty of other places to get sound financial advice without supporting or endorsing him.
Apparently I wasn’t clear because you completely missed my point.
You can still follow advice, buy a chicken sandwich, shop at a store, watch a movie, enjoy a basketball game etc with people, owners, stockbrokers, actors, athletes you don’t agree with – sheesh!
To play devil’s advocate here….. Your 2nd bullet is essentially supporting the idea of investing money versus putting it towards an asset. You’re saying you took his advice to save up cash for emergencies in order to lower your risk. That’s essentially what is being advocated by saving or investing 100k versus taking it off your mortgage. Even i-bonds are giving 7% guaranteed right now. You could buy 20k of those, earn the 7% and be ahead 4% with no added risk.
If you got 30k of medical bills the day after you bought a house do you have somewhere to pull that money from easily? Or would you have to set up a HELOC to pay it?
Obviously you don’t need to answer to everyone. But these are the types of questions you should think about before taking blanket advice from anyone.
-How much difference in money are we actually talking? Have you done the math?
-Do you have enough money in accessible buckets to cover emergencies (large home repair, new car and/or deductible, medical bills, etc)? Enough to cover emergencies if you also lost your job at the same time?
– What’s better for FAFSA considerations?
-Will you be inclined to spend more money when you have no mortgage payment or would you be diligent enough to not fritter it away?
-Do you anticipate any need for this money for future opportunities like opening a business or buying a rental property? If you wanted to do these things where would you pull the money from?
Really great things to think about! To answer the emergency question that’s come up a couple times, the money we spend on the house will not touch our six-month emergency fund. That’s a separate bucket as are all our other ‘sinking funds’ like care replacement, home repairs, medical bills, etc.
The difference is the risk was known and likely. I was having a baby. The chances are much higher of having a medical emergency while pregnant or delivering than in normal life.
I like the way Dave puts it, why not take out all the equity on your house and invest it? Why not pull out every single cent? Why pay down debt at all? Risk. Like I said, I could be WAY more creative with my money, but that’s not how I like to do things. This blog is called Blogging Away DEBT after all. ; )
Beks,.
I completely agree with you, I don’t hear of many people financing a paid for house to invest in the stock market.
I can’t imagine how negative my life.would be if I had to worry about business owners personal beliefs when I have never met these people. I just placed an order with Target, I have no clue who owns Target and I’m not interested in finding out!! Everyone knows who owns Amazon, but it has nothing to do with my busy, happy life,. I’m just glad my kitchen drawer pulls I ordered from there arrived!
What joy there is to be had in contentment.
I love this.