Why I Don't Follow Dave Ramsey Anymore
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- Опубліковано 24 лип 2023
- I've made the decision to stop following Dave Ramsey. While I've learned so much and will forever be grateful for his teachings, I've decided to move on.
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About Sara:
Sara is a wife, mother, and creator of Frozen Pennies. With a degree in English, a former teacher, and a Certified Financial Coach, there is no better place to learn about debt freedom, budgeting, and overall frugal living.
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I’ve noticed one thing that Dave Ramsey has failed to address and that is how to get out of debt when someone is homeless and who doesn’t have a close family or any family for that matter.
I feel the same and thought maybe it's just me. I found Dave Ramsey after I became debt-free and learned a lot about managing money from his plan. But I've reached a point where it doesn't make sense. It works great if you have decades to invest but not if you are already retired. If I followed the Ramsey plan at my age, I'd have to work 3 jobs and be gazelle intense until I drop dead. I'm debt-free with a fully-funded emergency fund and live frugally on my pension & Social Security. Now I want to enjoy my few remaining years.
That makes sense.
You're only supposed to be gazelle intense while you pay off debt. He encourages people to enjoy their money, invest, and give once they're out of debt.
Gazelle intense is the term he uses in relation to getting out of debt.
As well you should!
I had a total of $200k in student loans and $360k in a mortgage. I wanted to start investing but did not know where to start. I came across Dave and started following his steps. 9 years later, Im completely debt free. My wife and I have a nice chunk in retirement, about $160k in 529’s, and a 6 month emergency fund. We opened a taxable brokerage account this April where we are investing our extra money. Thank you Dave!
Dave Ramsey's snowball method is THE best method for getting out of debt IMHO. His tips on budgeting , cutting expenses, and going gazelle intense on paying off debt are top notch. However, I did not stop my 401-k contributions up to the company match, didn't cut up my last credit card (but stopped charging), and saved $5k in my emergency fund. That is what worked and was best for me at my age and stage in life when I still had debt. I would not have slept well at night by completely stopping my 401k investment (up to match) and only having a $1k emergency fund.
Dave Ramsey is solid for people who are in debt trouble, he has helped so many people and his way absolutely works.
However, it's mostly for the irresponsible person (people).
Once a person has gone through the steps, begins to appreciate a dollar, learns how to save and only purchase items that you are able to pay for, then I agree, walk from away from Dave.
Credit scores ARE important, credit cards can make you money and once a person is responsible with money, then use them..
The only thing I would never do, that you mention in your video, is buy a car on credit.
A mortgage I had because it would take too long to buy in cash but everything else, only buy it if you have money in the bank to pay off in full.
Great points! Thanks so much for watching!
@@saraconklinfrozenpennies oh I meant to also mention, great video!!
We are at exactly the same place. Not to mention the thousands of dollars of travel points and free hotel nights we’ve got since being able to now responsibly use credit cards and never have a balance.
That sounds absolutely dreamy!!
Fantastic video! Thank you. Much love
Glad you enjoyed it! And thanks so much for watching!
I've followed Dave for years, even when my late husband wasn't entirely on-board. He did agree to a monthly budget, not using credit cards, and other parts of the Ramsey plan, but not all of it.
Now that he's been gone for a bit, I agree Sarah, that life is much easier with a good credit score. I am debt-free, but I did/ do a bit of work to have and keep that good credit score.
And I still listen to Dave's program. He no longer recommends just using the envelopes, although the Ramsey Store still has envelope wallets. And he is NOT against auto payments or using debit cards; in fact, awhile back, he went on a rant about people who think debit cards are bad, and who equate using banking e-services with evil.
I think a lot of it has to do with the lives individuals lead. We are different, and that means our finances, too.
I fully agree with you! With cash I didn't really have a record of where my money went, but with a debit card I can easily scroll through my bank app and easily see where I spent money.
It is definitely easier to track of where your money goes. As long as you can be disciplined about it. That’s the trick… adulting is hard! ☺️ Thanks for watching!!
I charge everything to my credit card because the company I use has impeccable customer service.
I am able to track exactly where I spend my money and then I pay that credit card off the day before the statement prints so I never have interest. Expense but I do get cash back. On everything.
Well, the receipts should show you where your cash went.
@@rebeccaa.3121 but I'd have to be able to keep track of a bunch of receipts and that's difficult for my brain
Dave advice seems to be with people who have high income they just make bad decisions. Seniors, single mothers and those on limited incomes who cannot get a second job are the ones who need more practical advice on how to manage $$. Grateful for UA-camrs sharing doable tips to save with what we can
You're correct.
It isn't usually possible for a single parent to get a second job. And seniors aren't usually the first, or third choice for employers. I've learned a lot from channels like Frozen Pennies, Frugal Fit Mom, See MindyMom. I think this channel is my favorite!
Great video here. I think some people need the structure of Ramsey advice more than others. Many of us have had examples of financial success and time to learn from them while others haven't
Thank you so much and thanks for watching!!!
Years ago we followed Mary Hunt and did the snowball method - life changer not having debt hanging over you. Also if we listened to a finance adviser when we bought our home in 1999 we'd be in a world of hurt today. Followed my gut - knowing what is right for our household. I'm thankful everyday.
I just found your channel in the algorithm where it popped up on my YT feed! I just subscribed to your channel! I totally agree with your way of thinking 💯! I like Dave Ramsey but I’m financially responsible with a debit card as well as a credit card too. I guess some ppl have trouble in that area though.
Awesome! Thank you!
I am a highly distractible person, and sometimes with Podcasts, not just yours, my mind wanders off and I forget to actually listen. But what I actually want to say is, I just find your voice comforting and soothing playing in the background, regardless of whether or not I comprehend your content. 😊 But no worries, I typically rewind! And I agree with no longer needing Dave Ramsay. He was a good starting point, but we got this!
Thanks so very much! I do hope you are able to catch a few golded nuggets here and there!
@@saraconklinfrozenpennies Oh, most definitely!
I had no credit card until I was close to 40 and had no credit record. I was turned down for a department store credit card. I got a capital one card with a $300 limit and now have an 800 credit score. I charge about everything I buy, but always pay it off monthly and never pay any interest. I track my spending on my statement with different colored highlighters for the different categories. If I were buying a house on credit I would want a good credit score and not be put in a bind looking for a bank to manually override a loan for me.
This is an excellent point!
It's called manual underwriting, not overriding. Lol
@@TheLiberty1999you are both right. He would lose an excellent deal while they be overriding things, that takes time. The term is underwriting.
Dave has an affiliation with Churchill Mortgage, one of the few lenders who do manual underwriting. So when you're forced to do manual underwriting because of no credit score, he benefits!
Have you ever done a house tour video... would be cool to see your pantry and how you organize your stock
I have done a tour of my stockpile. But not a full house tour. The thumbnail says The Pantry Stock Up. It’s an older video
@@saraconklinfrozenpennies I'll check it out, yeah a house tour would be nice as well, when I browse other channels I always look for house tour videos, don't know why but I love seeing how other people decorate their homes
I agree with your take on Dave Ramsey. I like some of his teaching and principles, such as having a good emergency fund, avoiding debt and budgeting. But I disagree with his advice on credit cards, investing and credit scores. He's too rigid in some areas. But he has helped me a lot and I am grateful for his teaching.
Several issues I have. Credit Score is important even if you never borrow money. Your auto insurance takes that into account. So do some jobs you might apply for. Also, doesn't he advise prepaying your mortgage? If you have a 3.5% mortgage that is foolish if you can get 4.5% in a CD.
I’ve never heard of a car insurance running a credit check. I have heard of jobs and apartment rentals doing this. He does recommend paying off a mortgage as soon as possible.
@@saraconklinfrozenpennies Check some back issues of Consumer Reports. Some insurance companies penalize those with low credit scores like drunk drivers.
Thankfully I found an insurance broker that represents smaller companies that don't look at credit score and I saved 55%!!!! My driving record is perfect and that's what should matter. There's only 3 states where basing auto insurance on credit score is illegal
Don't forget you have to pay taxes on that CD, but paying down that mortgage isn't costing you tax money so that 4.5% CD after taxes is about 3.7% or less. I think at that point I'd stick with paying down the mortgage.
A 1% spread keeps you from paying off your mortgage? That is no where near worth the risk of keeping a mortgage. You don’t understand how simple interest is different from compound interest, and taxation, and the added advantages of not having a mortgage.
Using a credit card responsibly is way better than using cash, especially in the modern world. Haven’t carried a balance in 25 years, but take a lot of free flights. Also much easier to keep track of spending.
I like Caleb Hammer's' idea of having a larger emergency fund than Dave Ramsey would advocate..I dislike that they are both screamers
What's a screamer?
Credit scores matter a lot when you're shopping for insurance, particularly auto insurance. If you do not have any determinable score, or have a poor credit score, you will be charged much higher rates.
Another person said this too. I’ve never had a credit check done when shopping for insurance before (that I’ve known of). I may have to call my insurance company.
@@saraconklinfrozenpennies Insurance companies look at not only your credit history but also the number of accidents, number of tickets, commute and/or mileage, age and other factors. Once you give them your name, address, phone and SSN# on an application, they have permission to access a lot of records without letting you know.
how do you rent an apartment without a credit score?
How long did you do the Dave Plan ? 🤔
About 5-7 years to get out of debt.
Thanks for the reply 😊💐
I followed Dave Ramsey (mostly) to get out of debt and change my habits after the sudden death of my husband. I didn't have massive debt but what I had was stressful to me. And, I learned how to budget, something I had never known how to do. From working with a friend who walked me through FPU, I learned what I needed and wanted, and moved on. I got kicked out of a DR Fb group because I'm not a DR purist and admin wanted no comments that diverged in any way from FPU ... oh well.
I think DR is a very good stsrting point for those who are drowning in debt and have no savings, whatever their income is, and have no knowledge of what to do. But, at some point, for many, it's okay and even preferable to move on, on our own.
Dave Ramsey has been around for most of my life, so I can't imagine how I would feel about money, if he wouldn't have been around trying to educate people. I do not think everyone is a debt "addict" and must follow his no debt program. I believe that people with debt can be responsible, have a credit card (oh my) and even pay off a 30 year mortgage without taking a 15 year loan. I feel like his program is a "12 step" for debt, but not everyone is an addict and doesn't need to follow a program that is basically for debt addicts. I recommend his steps be tweaked to one's personal circumstances. There is more than one way to pay off debt and build wealth. I do love the community that has developed over the years around his work/podcast, although the tee-totalers can be quite harsh sometimes 🤣
This is super interesting. I followed his program for years and don’t feel like I was an addict. I do feel like I was uneducated. And learning from his theories allowed me to form my own opinion. I’m grateful.
I think the every dollar app makes the envelope system obsolete so I really do not think they push that anymore. We cannot argue that those who follow his plan are or are well on their way to becoming millionares. Think I will keep following the plan-- I am almost there. Let us know when you reach the millionares point on your plan, if that is your goal.
Hi ❤
Hello 😊
Hello from Germany 🙂
I went to my bank today and canceled my Dispo , so I can no longer be in minus 😀
I think its a personal thing. Ive always said that Dave Ramseys theories are amazing for getting out of debt, (except I think you need a larger ER fund than $1000) but his idea of how and when to invest needs updating and work to make sense. You dont HAVE to use cash, but most people who are in debt got there (including you and me) due to mis using and being irresponsible with them. The envelope, cash system teaches a person how to make a budget and stick to it, rather than just to track your over spending. My hope is that once you get out of debt using his methods (which you dont need to buy his book nor attend his pricey university to do) you will also learn to be more responsible with credit and debit cards. I find it kind of fun, as well, to handle and count the money. Is that weird? lol Im sure there is a name for my condition. lmao I use a kind of reverse theory of the avalanche and snowball methods to save for my fun sinking funds. i.e. vacation spending money, a golf club, the too spendy of tennis shoes I want for my hip problems, a new to us car fund at some point and a new to us camper fund (to put in a seasonal spot at a campground) to spend summers when we retire. I put them in priority to me order in my binder and stuff it with funds I earn from rebate and shopping apps, my husbands occasional OT, excess money from my grocery budget, money I receive from selling something, monetary gifts I get etc. For the car & trailer, we put the money into the bank in $500 increments and use a placeholder to remind us how much we actually have saved for that fun thing. We mostly fund the most important or the one coming up the quickest, first, while I put a minimal amount every time into the rest of my envelopes. When that first one is fully funded, I move on to the next in line to take priority, to me. But, the important thing is, I still do it with all cash. We are not in debt anymore, except we have a couple of years left on our mortgage. Its fun to watch the stacks of cash grow and its the best when we get to go purchase the item we have saved for, and can pay in cash. Well, we wont pay for the car or the park model trailer with cash but the other stuff we do. The binder is called our Fun binder. I will never not have one.
I love all this!! Big Congrats on your debt free journey - sounds like you're almost to the finish line!
@@saraconklinfrozenpennies I watched a video on Dave Ramsey responding to an audience member about $1000 in 2023 being less value than 2003. Hoqever, the 1st step ER fund was never even meant to be $1000 exact but only for small, unexpected stuff, like a flat tire. This is to prevent people from resorting to credit cards or paydays loans when something blows their budget. While he is against the idea of letting even employed youth from living with family, I am weeks away from paying my $15k student loans! The issue is that I am not to certain on grad school, which would risk bringing me back to step 1.
Wow ❤❤❤😊😊😊
Thanks for watching!
Dave Ramsey gets you to manage money better. You can’t get ahead if you are behind.
This is so very true!!!
Where you live and where you drive your vehicle dictates a lot about how much money you'd be spending on a car wisely.. It is life-threatening to have inferior vehicles in rural settings, subzero winters, With car repairs tripling in price I am better served by a new vehicle for the extended warranty bumper to bumper. I am unable to walk more than 1 block ..cant affird to be stuck on the side if a road when it's -20°. I save on car insurance by using insurance by the mile. Other frugal choices cover my car expense.
I’m not sure I agree with that. I’m in a pretty small town with super cold winters. You can have a reliable vehicle without buying new.
How do you have a credit score if you have no debt?
This is a great question that I get asked a lot. Years ago, I had no debt in my name. Our mortgage wasn’t even in my name. And I had a decent credit score of 650. So I did some digging. Come to find out, utilities in your name impact your credit score. My cell phone also did. Because most of our bills were on auto pay, that really helped. I didn’t have a Ny credit cards at all since I buried myself in the early 90’s. So it is possible to build credit without credit cards and loans.
@@saraconklinfrozenpennies There are many financial transactions that might be factored into a credit score - rent, utilities, phone, streaming subscriptions, student loans, medical bills - basically any revolving or installment payment. If you pay on time, you're good. If you pay late or miss payments, you're in trouble. I used to work for a credit bureau so I can confirm that is true!
I once listened to him snd read his books. But I find him rude, condesending and demeaning to his listeners. He is suppose to be a Christian, but he does not speak like one. I have read that he does not treat his workers well. Same for Suzie Orzman. She seems out of touch with regular, average people. She, too, is rude and condesending.
I listen to Clark Howard on youtube. He is honest and treats his listeners with respect.
🤪🤔😒
Dave Ramsey has helped a LOT of people. But he lost me during the pandemic when he told a caller that just because their renter lost their job and couldn’t pay rent, it was not the landlord caller’s problem. No, it wasn’t, but…Ramsey said he had no obligation to work things out with them, or barter property/ landscape maintenance with them, or help devise a way he could get the value of his rental property without making people homeless.
I haven’t had to face this, as I own my house, but I remember thinking, “You selfish, amoral, greedy so and so. There’s an effing pandemic. Don’t encourage people to be heartless jerks when there might be ways to make things work.”
That's always been my issue -- he's HARSH to the majority of people, and always works from the business owner point of view. And the whispers about harshness to his own employees really exploded these past few years as well. I'm originally from that area and worked in/around real estate for years, had heard the stories all along.
Very misleading caption!!
Really? I don't think so. I go into the reasons I think he's wrong. But thanks so much for the feedback and thanks for watching!
Why?
The fact you felt it wise to throw a man under the bus who helped you along your journey tells me alot about your character. I subscribed and binge watched your videos until I came across this one. Very disrespectful. I'm out. Be well.
I find myself rather perplexed as to why you would feel the need to publicly disavow Dave Ramsey, considering that it is because of his method that you and your husband's finances are sound. It was because of Dave Ramsey that you have a job as a certified Financial Coach and successful UA-cam channel. I notice that you released this video when there is controversy going on, so you feel the need to cash in on it by making a video with the phrase "Dave Ramsey Scandal" as one of your tags to make sure your video gets seen and you get plenty of views and monetary remuneration from it. You don't even know if the rumors about him are true, yet you are ready to turn traitor and then profit off the scandal, which is completely UnChristian.
Now that you no longer follow Dave Ramsey, are you going to get certified through another organization so as not to be a total hypocrite?