I’ve often chatted about Dave Ramsey and the “Baby Steps” here on the blog. Ramsey hocks it as a tried-and-true way for anyone to get out of debt and get their finances on track. While his seven-step program is a great way to improve the fundamentals of your money management, especially if you are a novice, it doesn’t work for everyone. Like anything else with finance, there is no “one size fits all.”
What Are The Dave Ramsey Baby Steps?
If you aren’t already familiar, the Dave Ramsey Baby Steps are this:
- Save your first $1,000 emergency fund. This is a starter fund! You’ll add to it later.
- Pay off all of your debt, minus your mortgage. He suggest using the snowball method, which is effective.
- After that, you’ll fully fund your EF. For Ramsey followers, he suggests having three to six months worth of expenses stashed away.
- Once you have enough money for a serious emergency put away, it’s time to invest! Dave tells people to invest 15% of your income into retirement.
- Save for your child’s education. Some people will be able to skip this one entirely if they don’t have kids.
- Pay off your home early if you have a mortgage.
- Build wealth and be charitable.
On his site, Ramsey sells this as an “Anybody Can Do It” money management plan. While the Baby Steps are solid, many fin-influencers don’t agree with Ramsey’s philosophies. Most can agree that there is no single financial plan that will work for everyone.
Why Some Fin-Influencers Don’t Like Dave
As mentioned above, the main issue most people in the debt-free community have with Dave Ramsey is that he acts as if there is only one approach to your money. Anyone who has been in the trenches of their own debt free journey knows that not everything goes according to plan. My own debt-free journey has had a lot of ups and downs. We have paid off quite a lot of debt over the last few years, but we have also strayed away from focusing solely on debt.
Fin-influencers on social media roll their eyes at Ramsey’s advice a lot of the time. Usually, they say, the information he is sharing is fairly obvious. Many fin-influencers also don’t like how much money he has made off of people who are down on their luck. For example, he takes calls on his show to provide advice. Ramsey isn’t particularly nice to the callers and is blunt about their financial situation. Then he tells them a “one size fits all” solution exists and they have $200 to access all of the details.
Others simply don’t agree with his approach. For instance, our family does better with more than $1,000 to fall back on, especially with our new baby. Fully funding our EF is a priority right now. After six months or so of expenses is set aside, we will be able to start cutting down debt quickly.
At the end of the day, you’ll know what works and what doesn’t for your finances. You need a budget and a plan of attack. Beyond that, your financial journey is your own.