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What Dave Ramsey Got Wrong

why dave ramsey is wrong - get out of debtDave Ramsey is an incredible human being that has helped guide thousands of people to debt freedom. And, let’s just say, I’m a bit of a fangirl. However, even the best people and teachers get things wrong. Here’s why Dave Ramsey is wrong on certain personal finance topics, and why you should always do things that are best for you and your financial situation.

You Only Need $1,000 In Your Emergency Fund

This is one of the first things that I believe Dave Ramsey is wrong about. Now, I get the gist of this. For many people, they don’t even have enough money to pay for a $500 emergency. So having $1,000 in your account is supposed to give you peace of mind that you didn’t have before. It’s also supposed to keep you from turning to credit cards or personal loans, thus getting you into debt or further into debt when you’re trying to be financially independent.

However, for many of us, $1,000 is just not enough.

For example, I have a family and I’m the sole income earner. So $1,000 is not enough if I were to become disabled and not able to work, or if we all got into a car accident and ended up in the hospital (knock on wood, I hope that never happens).

So, for my family and me, a larger emergency fund isn’t just wanted, it’s needed. It’s a requirement and I made sure to save at least three months of expenses just in case.

I also got…

  • disability insurance,
  • life insurance,
  • and more…

…but that’s a story for another time.

If you’re just starting out in your personal finance journey, are single, and live in a low cost of living area, $1,000 may be enough for you. But if not, you need and should save more.

You Can’t Do ANYTHING While In Debt

This is another thing that I believe Dave Ramsey is wrong on. When my husband and I were paying off our debt, we went through Dave Ramsey’s book “The Total Money Makeover”. And one of the things that we determined is that we were not going to sacrifice our entire lives just because we wanted to be out of debt.

Don’t get me wrong, I think being gazelle intense is great for people who need to stay dedicated and have a hard time focusing. You do need a certain amount of dedication and hard work ethic to be able to succeed in being debt-free.

However, if you have six-figures of debt, have a lower income, or have a family…you most likely won’t be able to be gazelle intense at all times.

For example, my best friend of 12 years got married while my husband and I were paying off debt. Had we been super gazelle intense and listened to Dave Ramsey, we wouldn’t have gone because “that money could pay off debt”. But instead, I saved up the money and we cut costs while traveling so we could attend but not dig ourselves into a deeper hole.

It’s totally okay to treat yourself every now and then while paying off debt!

  • Just do it in cash, and
  • don’t go overboard.

But if you’re always gazelle intense, you’re going to burn out fast. You could also possibly go back to bad habits once the debt payoff is done. Everything in moderation.

ways to improve your financial mindYou Have To Pay Everything In Cash

While I get that paying in cash stings and thus can keep you from overspending, I don’t believe cash is king.

Cash only spending doesn’t work for everyone, including my family.

I get paid directly into my bank account, and my bank isn’t anywhere near me. So, if I wanted to take out cash, I only have the option of doing it in $20 bills, and then trying to break those down into smaller denominations to fit my budget. I’d also have to pay a fee for using an ATM that’s not my bank, and I’m just not about that life.

So instead, I use “cash envelopes” online through a digital personal finance app. This allows me to see where my money is going, without carrying around hundreds in my wallet and having to figure out how to break down each $20.

If cash works for you, great! If not, that’s okay too. Use a debit card, but track your expenses and make sure you don’t overspend. It is possible to still stay on budget without using cash.

Credit Cards Are Bad

Dave Ramsey believes that credit cards are all bad and that no one should use them. And while I think that’s the case for some Americans (because let’s be honest, some people are irresponsible), I don’t think that rings true for everyone.

I have a credit card. And I only spend $30 on it every month for gas. Then, I pay it off before I get charged interest. I don’t have any credit card debt, and I’m smart about the way I utilize it. I only do this for the credit score.

Related: Top Rewards Credit Cards

And yes, Dave Ramsey also says you don’t really need a credit score, but I don’t agree with that either. Most people will never be able to afford something like a house in cash. But they can utilize their credit score to get better deals on mortgages.

I do think Dave Ramsey is right in saying that many people get into credit card debt because they have a credit card. I’ve seen it first hand. Your first credit card is super tempting and for many people – it’s free money – and then they overspend and get into debt. If you know that you’re that type of person, DON’T get a credit card.

But, if you’re like me and just want to build your credit, and can pay off your bill in full every single month, I don’t think having a credit card is a bad thing. It can absolutely be a tool that you can use to your advantage.

Related: 8 Reasons Your Credit Score Matters…and How to Improve It Quickly

Why Dave Ramsey is Wrong (& Why I’ll Still Follow His Advice)

As you can see, there are a few things I disagree with when it comes to Dave Ramsey. However, I still admire him and his quest to make Americans more financially savvy. And again, that’s not to say that he’s really wrong about the things he says. It’s just that all of his advice isn’t applicable to me. And that’s okay. It’s called personal finance for a reason!

What are your thoughts? Do you think Dave Ramsey is wrong about some things??

Get Out of Debt Money

AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.


  1. Agree with you. Love Dave Ramsey’s passion to make people be financially successful. I listened to him for motivation but I dont follow his credit card advice bec am anal about paying my credit debt on time or beford time. And yes, i enjoy life in moderation, within my means. I invest on my own bec i studied the stock market on my own and knie how to do it than relying on mutual funds.

  2. I don’t believe Dave Ramsey got it wrong with a $1000.00 dollar emergency fund.
    He explains it as a starting point for saving. When you have the $1000.00 in this fund you can attack your other debts and eliminate them that much sooner and then you can build the emergency fund up to the 3 – 6 months as suggested/

    • This has got to be my Uncle Dennis. Welcome to the page!

      Yeah, he doesn’t necessarily have it wrong, just a little out of date at this point. $1,000 doesn’t get you all that much these days. A blown transmission or furnace will quickly leave you dead in the water with just a thousand bucks. This should probably be bumped up to $2,000 in this day and age.

  3. Dear Kim Studdard,
    I enjoyed reading your piece.
    What do you think about his “one size fits all” approach to:
    1. Credit cards’ payoff (“snowball”)?
    2. Investments (Mutual Funds) and his ELPs (Endorsed Local Providers, who pay $350 a month for Dave to promote the MF salespeople who sell Front-End Load MFs (loaded with commissions to the ELPs) which are not proven to perform any better than No-Load MFs. The cookie cutter advise is alright for those struggling with getting out of debt; but, his investment advise is biased and out of date.
    He can’t back-up his claim to have a heart of a teacher while being less than 100% honest AND transparent about the undisclosed kick-backs and failing to truly educate people so they have knowledge and understanding.

    • Hi Gary! I’ll give you my take.

      1) I love the debt snowball. I used it myself and paid off more debt in a shorter amount of time than should have been humanly possible!

      2) I’m not mad at Dave for leading us to his ELP’s. If they can earn people 11-12% on their money and have fees of 2%, then people are still earning 9-10%, where they would have been earning probably 4-5% doing something super-safe on their own.

    • Hi Gary! I think the snowball payoff is great! My husband and I (when paying off debt) did that and it worked well. However, if someone has super high-interest rates on credit cards or loans, I actually suggest the avalanche method.

      As far as investing, I don’t think anyone has the right answer. It’s so personal and I believe everyone needs to do their own research on what works best for them and what will help them in the long wrong.

  4. Love your take on some of Dave Ramsey’s teachings! I use to be a pretty black & white thinker when it comes to managing money but we’re all unique. Like you, we also use credit cards to our advantage & then pay them off in full each month without interest. And we’ve built up a healthy savings account. As you suggest above, the key is to “know thyself” (honestly!) when it comes to how you handle money & then do what works best for your family. Yes, there’s the future to think about—but we also have to live RIGHT NOW!

    • Yup. It seems that there are a ton of people that are good at living in the present, and then a good amount of people that live solely in the present. Then, there are just a handful of us that have learned to do both. It’s not easy!!

  5. Hi Derek and Kimberly – This winter we went through a two week period where; Furnace, Water Heater, Car, and Computer all decided to be at end of life. Your thoughts on using “emergency funds” vs. “emergency credit”?

    • The key is to do everything for as cheaply as possible until you have the funds to cover it. Maybe do without the car for a bit? Maybe you and a friend can figure out how to fix the furnace and water heater? Instead of fixing your computer, maybe you can get things done with you phone or tablet?

      The key is to understand that you don’t just have to fix everything and always have professionals do it for you. That’s the most expensive route and isn’t always necessary.

  6. Re: Dave WDGW yes & no for me personally. A few years back a Church I was attending sponsered his Financial Peace University sessions, which by the way did not come cheap. I was single at the time and the lessons/steps were geared more for married couples. Oft times I felt like a fish outta water trying literally trying to get in where I fit in, until I just donated my materials to a couple, dropped out and decided to just work the book TMMO on my own/at my own pace. And even though all of his advice and guidelines did not apply to my situation at the time, I did gain a sense of hope and optimism reading it. Especially his candor and wit in sharing his personal financial journey and lessons he learned on the way. I to this day still apply his strategy whenever I purchase a big ticket item. Too funni, but does it work.:)

    • Great comment, Carla! Thanks for sharing!

    • I love Dave Ramsey and his ideas. His snowball method is the best way for anyone too tackle debt. The only thing I disagree with him is too stop all investment while getting out of debt. The opportunity for growth is worth the little bit of money for investing along the way.

  7. You Bet! Awesome Resource you have going here. Regarding my previous comment re: WDRGW I meant to write *but Boy does it work! There was no option to edit once I hit submit. In anycase Thnx 4 the reply.:)

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