Disagreeing with Dave Ramsey is taboo. One might as well claim that red, white, and blue are awful colors for a flag. Or that the IRS is a joyful part of our lives. Those who say such things are considered odd at best.
Disagreeing with Dave Ramsey produces the same result.
There is no upside to disagreeing with him. He has an army of rabid minions who will immediately pounce and dismantle anyone who disagrees with him.
Even when he is wrong (*gasp*).
He has risen to superstar status and his word is often considered irrefutable.
That is scary. Especially for Christians in light of commandments #1 & 2.
Who Is Dave Ramsey
Dave Ramsey is the best-selling author of The Total Money Makeover (TTMM). TTMM is the Dark Side Of The Moon of personal finance books. It has sold close to a kajillion copies.
Hundreds of thousands of families have graduated from Financial Peace University. The Dave Ramsey Show is heard by millions on radio stations across the country.
Dave and his team have helped thousands of families get on a budget and get out of debt.
So why would anyone believe that disagreeing with Dave Ramsey would be helpful?
Dave’s books and articles are not canonized. They are neither inerrant nor infallible.
His financial advice on many things is rock solid. Some of his ideas, however, should be challenged, scrutinized, and summarily discarded.
Let’s review some of the ideas and concepts in which disagreeing with Dave Ramsey is healthy. If you have a sense of humor, here’s an article in the style of The Babylon Bee about Dave Ramsey.
Don’t worry, disagreeing with him won’t send us to hell — at least I hope not.
Paid For Mortgages Generate Wealth
Dave is extremely conservative when it comes to mortgages. He only recommends the fifteen-year mortgage. Another conservative Dave rule is that the payment cannot exceed 25% of your take-home pay. Strict compliance with these mandates is required to be on Team Dave.
Paying down a mortgage does not guarantee wealth generation. Dave has studies that state just the opposite. However, correlation is not causation, even if it’s repeated ad nauseam.
Paying off a mortgage early might increase personal net worth. It also depletes cash. There is also an opportunity cost involved. When money is sent to the bank it can’t be used to purchase mutual funds.
A debt-free home might generate a smile but it doesn’t always generate wealth.
Resist making debt destruction an idol.
Private Colleges Are Overpriced
Tuition at private colleges can be salty. However, you don’t get what you don’t pay for. Conversely, private colleges often have better aid packages available.
Value is more important than price.
Ramsey Solutions offers a personal finance coaching course. The cost is nearly $2,000. Plus, the coaches pay close to another $2,000 per year for leads from Ramsey.
Expensive? I think so.
Valuable? It depends on the coach.
The same applies to the college and the student.
Public colleges are now indoctrination machines. The plurality of colleges train students on what to think but not how to think.
Private schools are slipping in many instances as well. Parents must be cautious.
I would resist sending my kids to state schools now.
Where should they go? I recommend kicking tires on these three schools: Hillsdale College, Grove City College, and New Saint Andrews College.
Our son attended Grove City College and we are thrilled with his education. Plus, it was less expensive than the nearest directional college in Illinois where we lived.
Blindly following Dave’s advice could be costly in multiple ways.
Disagreeing with Dave Ramsey on college choice might be the best thing for your children.
“We cannot continue to send our children to Caesar for their education and be surprised when they come home as Romans.”
Voddie Baucham Jr.
Debt Is Dumb
Dave begins every new segment of his radio show saying, “Debt is dumb, cash is king,” and then talks about paid-off mortgages and denigrates BMWs.
Is there such a thing as good debt? Does the Bible truly discourage going into debt as Dave claims?
Debt is not dumb. It is risky.
Debt, in many instances, shines a light on our motives. When debt is being used to purchase a lifestyle not yet earned we’re likely discontent or selfish.
Buying a house with a mortgage is not dumb. In many instances, borrowing money to start a business is a good move.
Taking out a student loan can be appropriate. It should be the last resort but not dumb in every instance.
Dave seems to hate debt more than God.
The Bible does state that the borrower is a slave to the lender. The book of Proverbs, however, is a wisdom book that often uses poetic language. It can be read poetically and not necessarily in a literal way.
Also, when this Proverb was written a person could be taken into slavery to recover a debt. Those days are long gone.
We should live within our means. Contentment is a virtue. However, Dave’s demand that debt is avoided in every situation is not Biblically accurate.
Disagreeing with Dave about debt is permitted.
A Credit Score Is An I Love Debt Score?
“A credit score is an ‘I love debt score’,” Dave opines. He then thunders on about people bowing at the altar of FICO.
Does he have a point? Are credit scores unnecessary? Can we live our lives without any debt?
Debt, in many families, is a serious problem. So is food. Yes, certain foods should be avoided or at least minimized for our own health. Food, however, is not eliminated.
Dave doesn’t need a credit card because he is a bazillionaire. For convenience, a credit card is nice to have. It also protects us in certain circumstances and situations.
Dave has made this stance his schtick and it is a profit center for him. The rest of the financial community has zigged and he has masterfully zagged. Additionally, Dave is irreverently and inaccurately abusing the Bible to make his point.
A good credit score will make life easier for most of us. Insurance rates, job offers, and other necessities are tied to this magic number.
Disagreeing with Dave Ramsey about credit scores is authorized.
Gazelle Intensity Is Biblical
Humans are not gazelles. Gazelles are prey. Lions are predators.
Dave paints a ghastly picture that big banks are predators and humans are their prey.
He is quite melodramatic on this point.
The bible verse he uses about gazelle intensity is also taken out of context.
Proverbs 6:1-5 specifically pertains to making a pledge for a neighbor. The closest idea we have to such a thing is co-signing a loan.
The writer of Proverbs is making a point that co-signing is quite risky.
Dave conveniently pulls this verse out of context and superimposes his hatred for debt on it.
Debt is risky. Unsecured debt should be put on notice and permanently evicted. We don’t need to misuse the Bible to make that point though.
Tortoise tenacity is superior to gazelle intensity.
Timothy Kiser
Gazelle intensity works for some but not everyone. I believe Dave states that one of his favorite personal finance books is The Tortoise and the Hare. Tortoise tenacity just might be better than gazelle intensity for you.
Disagreeing with Dave Ramsey on gazelle intensity just might prevent an uprising at your home!
It’s Wrong To Pause Giving While In Debt
Dave states that a person should budget 10% of their income to give charitably. He indicates that Christians tithe and that the Bible is clear about that mandate.
In one video he states, “Your baseline, starting point for your generosity, for those of us who have a faith walk like that, is a tithe, a tenth of our income.”
Not so fast, cowboy!
I would never discourage someone from giving charitably. I practice and promote radical generosity. Mandating that a person give ten percent of their income is not biblical, though.
Biblically, a tithe was food and not money. Offerings were given (but not necessarily 10%). A temple tax was required.
Tithing was not money.
Dave is dead wrong on this subject.
Giving should always be cheerful and never out of reluctance or coercion.
There is no starting point or baseline when giving. Charity begins at 1 cent and not at 10 percent. Here is a link to the Ultimate Tithing Guide.
Disagreeing with Dave Ramsey on this subject is Biblically accurate.
Live Like No One Else
For many years Dave would state, “If you live like no one else now, later you can live like no one else.” A few years ago he added, “You can live and give like no one else.”
This catchphrase is brilliant. Dave comes up with some great ones. My favorite is “Act your wage.” I love that one and it doesn’t fan the flames of greed.
Encouraging the idea of “living like no one else” promotes greed, pride, and selfishness.
Winning at wealth without losing our souls is more important than living like no one else.
Disagreeing with Dave Ramsey on this idea would align you with Jesus.
Responsible Credit Card Use Does Not Exist
I have had one credit card since 1987. It’s paid off long before charges are billed. Nothing is ever charged on it that can’t be paid immediately.
So why not just use a debit card?
A few reasons. Dave Ramsey has contested most of my reasons here. One thing that was not included in the article was longer warranties. Credit cards often extend the manufacturer’s warranty. When buying large items that can be helpful.
Millions of families use credit cards responsibly. Responsibly means that they are not carrying a balance from month to month.
No one will get rich with a credit card cash-back program. However, a hundred bucks is a hundred bucks!
Disagreeing with Dave Ramsey on credit card use just might pocket you a Benjamin or two.
It might also free you from hypocrisy. I guess that thousands of Dave Ramsey Fanboys and Fangirls secretly use plastic. They do so in shame and hide their perceived “sin” from others.
Pause Investing To Get Out of Debt
Lost time can never be recaptured. The hardest part of investing is simply getting started. Make time your ally and not your adversary.
The idea that a family needs to be totally out of debt before investing is ridiculous. It’s also irresponsible for a financial talking head to state such nonsense.
You would never turn down health insurance from your employer because you’re paying down debt. Why would you pass on a 401(k) match?
The financial planning community universally rejects this advice from Dave Ramsey.
You don’t need to drop 15% of your gross pay into retirement funds on day one. Pausing your 401(k) to get out of debt could do irreversible financial harm.
I started contributing 1% to my 401(k). The company matched it at 100%. Free money! As I felt comfortable, I upped my contributions. I never paused my contributions — even when going through FPU.
This one concept is why I stopped my coaching partnership with Ramsey Solutions. I could not in good conscience recommend this terrible advice. Since I was representing Ramsey Solutions I would not misrepresent their brand.
Disagreeing with Dave Ramsey on this point will align you 100% with financial planners and registered investment advisors all over the world.
One Size Fits All
Dave created what he calls the 7 Baby Steps. He emphatically states that these steps work for anyone and everyone.
Personal finance, at Ramsey Solutions, really isn’t personal. It’s clinical. Mostly, it’s about Dave and reflects his personality. He imposes his risk tolerance, dreams, and vision on his audience.
It’s his way or the highway.
I couldn’t care less about a ski boat or a chalet in the Rockies. Neither of those is wrong. They just aren’t important to me.
Paying off my house is not an obsession for me. I am generating sizable wealth with a mortgage. Many would love to have a mortgage-burning party. Good for them! It doesn’t guarantee financial peace, though.
Financial plans should include personal hopes and dreams. Forcing a square peg into a round hole is painful.
One size does not fit all.
Disagreeing with Dave Ramsey can free you to discover what you want instead of mindlessly accepting what Dave wants.
Agreeing With Dave Ramsey
I agree with Dave on many things. Just not everything and that should be okay. Total agreement is required in cults.
My parents are Southerners (Missouri & Tennessee). Growing up, two common cliches were often shared that fit this entire situation.
“Don’t throw the baby out with the bathwater” was one such cliche. The other one is “Eat the chicken and spit out the bones.” Both indicate that in every situation there is good and bad.
We must discern the difference.
Take what you can from Dave and his team. Just don’t be afraid or bullied into agreeing with everything he says as gospel truth.
I dare you to profit!
PS — there will be some who make comments such as, “You owe Dave or are in debt to him because he helped you early in life!” That’s incorrect. I bought The Total Money Makeover. I also paid for a lifetime membership to Financial Peace University (those don’t exist anymore, oops). The tuition for his master’s coach certification was not free.
I owe him nothing. We’re even Stevens. I didn’t follow the 7 Baby Steps. I found them restrictive and legalistic but was caught up in the Dave Ramsey zeitgeist.
Now, I am free.
FPU is a great program for the person who wants to be told what to do but not why. If you love blindly following orders you will be helped.
Yippy Ki-Yay!