Are The Dave Ramsey Baby Steps Out of Touch with Today’s World?

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I have recently read several posts, opinion articles, and forum comments, all with the same common thread; Dave Ramsey and his baby steps are out of touch. I’m a Dave Ramsey fan. He was one of the first resources I found when I began my personal finance journey back in 2010. 

I don’t regularly listen to his daily radio show because I’m at work but do download his podcast and listen at night and weekends. I’m still inspired every time I hear someone perform a debt-free scream on his show.

Dave Ramsey offers practical, common-sense advice for those just starting to organizing their money, budgeting, saving, and get out of debt. His baby steps outline seven easy steps to get you started in turning your money management skills around. 

When my family and I needed information, the Dave Ramsey baby steps were very helpful in getting us on the right track. His book The Total Money Makeover is a great read and helped motivate us to take the plunge to get our Financial life in order, build a monthly budget, paying off debts, and starting an emergency fund.

Over time I have found plenty of other great resources too, which have also helped shape my financial plan over the last few years. So as I move forward, I’m a combination of all of this great information I have collected included bits of the Dave Ramsey baby steps. 

I don’t believe in taking everything he says and run with it, I listen and see what fits or doesn’t for my personal finance situation. So why just straight-up bash the guy when his advice helps others?

Dave Ramsey Baby Steps – The Complaints

I’ll summarize, because I don’t want to call attention to the information I’m referencing, but a quick Google search will find several articles on the topic. You may have even read some of them on your favorite personal finance blogs or financial planner websites. Here are some of the chief complaints:

  • The Debt Snowball Method Doesn’t Make Sense – Your rack up interest charges.
  • Paper Currency is a thing of the past – Millennials don’t use cash.
  • Dave’s investing advice is weak – 12% returns are impossible.
  • Emergency funds – Three to six months of expenses does not work for everyone.
  • Mimicking Rich people’s habits doesn’t work for everyone – poverty-stricken people don’t have these opportunities.
  • He mistreats callers, especially women.

Let’s review each of these and understand the beef with Dave Ramsey and his baby steps.

Dave Ramsey – The Reality

Let’s review each of the above points.

The Debt Snowball Method Doesn’t Make Sense – Your rack up interest charges.

My family and I used the debt snowball technique for over four years, and we paid off over $109K worth of credit card debt. I was able to negotiate with my creditors and lower my interest rates to as low as 1.5%. The snowball has worked for me. The debt snowball has worked for many others too. 

Yes, depending on your situation, the debt avalanche where you attack the highest interest debt first, might be better for you. Either one will work. We found that by following the Dave Ramsey Steps, using the snowball, we built momentum, and reduce money stress in our life.

The fact that I read and learned the Dave Ramsey steps allowed me to learn about the debt avalanche too.

Paper currency is a thing of the past – Millennial’s don’t use cash.

I’m a Gen X kid, and my choice of payment is a debit card, sometimes I use cash. So just because Dave states to only use cash as a way to organize your financial goals, you take shots at him and not think for yourself? 

I don’t care what age or generation you are, use what method of purchase that works best for you, but the point of it is, pay yourself first, have a spending plan, and always try to spend less than you make.

Dave’s investing advice is weak – 12% returns are impossible.

I agree Dave’s investment advice or project returns percentage isn’t the strongest, but if you know nothing about investing, dropping your retirement money in mutual funds and let them bake for 20-30 years isn’t an evil plan. Yes, you will not see consistent 12% returns, but I’m sure your net worth will grow.

I think that’s Dave’s point he’s trying to give general tips to a broad audience. If, at the very least, this should give you a retirement planning start and sparked the interest to seek more information.

Emergency funds – Three to six months of expenses does not work for everyone.

Any type or amount of cash savings is a good thing. Life has a way of punching you in the face from time to time. Insert global pandemic of 2020. Dave’s advice to save at least three to six months’ worth of expenses is a general guideline.

How much money you save is totally up to you. If you happen to have an irregular income, you might want extra money in your e-fund. If you lose your income, how quickly could you replace it? That’s only something you can answer.

I’d suggest nine to twelve months might be better, given the uncertainty we are seeing in the economy at the moment. 

Mimicking Rich people’s habits doesn’t work for everyone – poverty-stricken people don’t have these opportunities.

I read books, listen to podcasts, and watch videos about successful people all the time, my goal? To learn from others who have become successful and try to duplicate it. 

Isn’t this is the basic principle of the book widely popular book  The Millionaire Next Door? The author interview millionaire and reveals their secrets on building wealth. Anytime you try to learn a new skill or increase your knowledge on a topic, you’re leveraging someone else expertise to do so.

He mistreats callers, especially women.

I agree Dave can be rude and abrupt with some of his callers. When you call his show and ask a question that bends or breaks the rules of his baby steps, I expect you get a virtual slap in the back of the head.

I’ve heard him scream at men, women, young adults, and elderly callers. He’s consistent and doesn’t discriminate. If you ask a stupid question, expect a firey answer.

They do call it a rant for a reason. A rant is defined as to speak or shout at length in a wild, impassioned way. Hell, his best rants can be found on YouTube, labeled as “rants.” Dave is also hosting a radio show; yelling and screaming do add some entertainment value.

I’m a dad of three children, two sons, and a daughter. I want the best for all three equally. I don’t sugar coat lessons for my daughter because she’s female. All three get treating similarly good and bad, depending on the situation.

Final Thoughts on Dave Ramsey

I still believe many of the things Dave talks about and teaches are relevant today, no matter when you were born or your gender. My approach with this information is I find what best for my situation, whether I’m trying to pay off debt, saving money, or reach financial independence. I do this with all of the books, blogs, podcasts, etc. that I consume. I never just blindly follow someone’s advice. 

They call it personal finance for a reason.

I’m sure people like to take shots at Dave Ramsey for the sheer fact that he’s been so successful for so long. Many of us want to try to knock the guy off on top because it usually draws attention. Keep up the great work, Dave. I’ll continue to listen with a grain of salt, and make the best of the information you provide for my situation.

Key Takeaways:

  • Dave Ramsey’s Baby Steps are a great starting point for someone looking to stop living paycheck to paycheck.
  • Paying off debt should be a priority.
  • Read other resources to have a well-rounded understanding of the topic.
  • Create a budget, pay yourself first, and learn to invest to build wealth.
  • Leave Dave alone.

What do you think of Dave? Do the Dave Ramsey steps still offer value in the personal finance world?

25 thoughts on “Are The Dave Ramsey Baby Steps Out of Touch with Today’s World?”

  1. No. He’s not past his prime. His advice is sound and timeless: Stay out of debt (A borrower is slave to the lender). His general advice and methods are Personal Finance 101. Many PF bloggers have graduated and are capable of successfully modifying his advice (like you are doing) to there own personal circumstances and goals. You should always take peoples advice with a grain of salt. But I agree that the serious bashing is baseless and uncalled for.

    • Agreed. His information was very useful when first starting out and as we’ve learned more we’ve molded it and adapted at we’ve gone along.

  2. I don’t personally follow Dave Ramsey because I have my own no nonsense gal to follow here in Canada, Gail Vaz-Oxlade. She advocates using cash like Dave does. Certainly based on facts, debt snowball is not as advantageous as debt avalanche, but in the grand scheme of things, for some people who are having trouble staying on track, it is still an excellent strategy. I think he is catering to the lowest common denominator but that’s okay. One size does not fit all. He is trying to reach the masses of people who are just starting their debt journey and need some common sense knocked into them. His delivery may be a bit over the top (screaming) and may alienate some folks though, that is really my only negative comment to say about Dave Ramsey.

  3. I’m pretty neutral about Dave Ramsey – I definitely don’t hate him, but I’m not crazy in love with him either. I read his book and the fact is that his method will work for a lot of people. I don’t agree with everything he says, but I’ve never read a book or blog where I agree with everything the author writes. He catches a lot of heat for his stance on credit cards and I too disagree with him there, but that doesn’t mean the rest of his methods are terrible. When you’re that famous, I think you just naturally become an easy target.

  4. I wrote a full post a while back on my thoughts about Dave, and I sprinkle it in every now and then. I find his tough love approach doesn’t work for me. Like, if you are not all in eating Ramen and beans and rice you aren’t doing it right (or at least that is the feeling I get listening to his show and reading his books). Sure, I’d love to be out of debt as quickly as possible, but if you have YEARS of scraping by ahead of you, that’s a pretty sucky life. We’ve opted to be a bit more gentle with ourselves and we even recently got a credit card. All that said, I have serious respect for Dave and his message.

    • I agree with you Kirsten. With a family of 5 it was difficult for us to go that extreme, but have made slow and steady progress with our debt repayment base on the debt snowball technique.

  5. You know, it’s really just personal finance people who take pot-shots at him and I’d say we all clearly have a higher tolerance than most of the population for wading through facts and figures and trying to get the best deal. Furthermore, most of us aren’t in debt or are on a pretty good path to getting out of debt in the first place.

    Dave Ramsey’s techniques clearly work for the masses, so I’m all for his method. They actually started Financial Peace University at my parent’s church a few weeks ago and I tried really hard to get my mom to go. I don’t think his investing advice is the greatest, but ANYTHING that motivates people to get their financial act together and get out of debt is a good thing.

    • He was like a genius when we first needed help, but talking to a friend recently and asking if he still listen to the show he said no its the same thing over and over. I guess that’s true once you understand the basics, you can more on.

  6. I haven’t used his advice, but I read an article about how he exploits the Christianity thing. I don’t agree with that aspect, but I bet you’re right: it’s easy to take shots at big names. Goes with the fame I suppose. The psychology of the snowball method is good if it gets someone paying off debt that normally wouldn’t, but it is not the most logical approach. That’s not to say it doesn’t work.

  7. The debt snowball absolutely works — that’s how we were able to pay off a car and our student loans early. The idea isn’t unique to him, I know, but he makes it simple. Cash envelopes did not work for us at all. Cash burns a hole in my pocket, I’m super worried about losing it, I hate dealing with coins, and I couldn’t have my husband stop at the grocery store on his way home from work if I had the cash with me.

    Overall, I think Dave Ramsey still has a lot to offer. Reading Total Money Makeover really helped kick my butt into gear, and I saw things from a different perspective. I do think some of his advice is dated, though. I suspect that people who have “made it” have a tough time keeping abreast of things and really being in tuning in with the people who are still in the trenches. I see it a lot.

    • I think you can take what works for you from Dave;’s plan and make it your own. I have seen a lot of people agree with the cash method not work for them.

  8. I don’t think he is past his prime and listen to what he says…but then I modify it to fit my needs. I could be out of debt faster if I went with “gazelle like” intensity…but that approach will cause burnout for me. There is something for the adage “slow and steady wins the race”

  9. I agree that he’s taken some serious heat lately, but I don’t think he’s at all past his prime. He does have a lot of great, sound advice for any age or stage. I think he says many things that are hard truths for people to hear (spend less than you make being chief among them).

    The debt snowball works! I think his focus on gazelle intensity is critical too… if you don’t SEE the wins you’re racking up, you’re not going to stick with the program. He’s right on a lot, however he’s knocked.

    • I like the idea of focused intensity. If you try and do to many things at once you typically fail. Just focusing on debt repayment has worked for us.

  10. I used to really like Dave Ramsey and the Debt Snowball works, HOWEVER, I can’t stand all of his yelling. I’m tired of yelling and people not listening to one another. I don’t want to hear people called names or talked down to. There has to be a better way to inform and treat people. I recently wrote a post about how I had to “quit” him. I haven’t listened to Dave this whole summer and I’m a lot more relaxed because of it.

  11. Im a big Dave fan, and his information was the first that truly made sense to me when I started this debt free journey. While I fallow most of his advice there are still a few things that I don’t my way.

  12. I followed Dave’s plan and paid off $24,000 in 9 months. Congrats on your debt journey too!

    I think Dave’s debt advice is sound… And for 100% of people struggling with debt. What ends up happening after you pay off your debt is you’ve got a lot of steam. You’re confident in your ability to budget. You’re more disciplined. Which you weren’t when you started. And I think that’s his goal. Dave’s plan is to help you get out of debt and learn to control your finances. He isn’t past his prime or irrelevant… We just move on to bigger and getter things.

  13. In my experience a 12% rate of return on investment is not a valid criticism. In Dave Ramsey’s defense he does say that if he is even half wrong you will still be a big winner! My vanguard has a lifetime return of 7.2% over 10+ years while my JP Morgan had a lifetime return of 11.02%. Vanguard weathered the 2008 crash and is strong today. JP Morgan was opened in early 2010. 11.02 is pretty darn close to 12%. If I rebalanced the account it would likely have exceeded a 12% return. Dave is less than half wrong and I am a big winner. You can win!

  14. The problem with really generic financial advice that you are trying to help a lot of people with, is that it’s great when you first come across Dave Ramsay or TheSimpleDollar etc. But once you’ve learned their main message, there’s nothing new to learn from them. They say the same things for new-to-finance people but for advanced people it is no longer relevant.

    I have never listened to a Dave Ramsay show but I can guess what it’s like. I don’t really read thesimpledollar anymore, same reason I’m sure lots of people don’t find him good. If he’s doing the same stuff and you liked him before, then clearly you would have liked him before and new people like him now.


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