Dave Ramsey has helped countless people pay off debt and transform their relationship with money. His clear advice and easy-to-follow rules resonate with many of his devoted followers. 

While I can’t deny the value in helping people get out of debt, his advice is not for everyone. 

At best, his all-or-nothing, shame-filled approach just doesn’t appeal to everyone. At worst, some of his advice is actually harmful and people would be better served by not following his advice. 

Here are some of the reasons why you should think twice before following Dave Ramsey: 

His advice is full of shame

If you’ve ever listened to his show, you know that it isn’t uncommon for him to talk about “stupid” or “dumb” things people do. If being berated for your life decisions motivates you, great! But being immersed in guilt and shame can also stop you in your tracks, making you want to curl up in a ball and wallow in self-pity rather than do something about it. 

I remember seeing a story once of a person who called one of Dave Ramsey’s advisors for help after taking out additional student loans for an extra year of college after his father died. He received no useful advice from the advisor, only reprimands for making a bad decision. This person walked away feeling worse than before. 

The two biggest problems with shaming people are that financial problems are often not their fault and it’s not constructive. It doesn’t help people get out of their situation. 

The guy who took out additional student loans after his dad died was doing his best with a challenging situation. He needed empathy and advice on how to move forward, not a dose of shame. 

As a financial coach, I do not shame people. While I sometimes have to give honest feedback that can be hard to hear, my promise to my clients is that I will always compassionately walk you through the steps to move forward without berating you for how you got there. 

The debt snowball isn’t necessarily the smartest choice

Dave Ramsey famously advocates for something called the debt snowball, which involves paying off debts in order of smallest balance to highest balance. The benefit of this method is that you get a mental/emotional win faster, which often provides people with the momentum to keep going. 

For those who struggle with motivation and find themselves wanting to give up, this can be a good approach. But there is a big downside: it could cost you time and money. 

Paying off the debts with the smallest balance first might mean that you are leaving a larger debt with a higher interest rate unpaid for longer. This gives it more time to accumulate interest, meaning that it will require you to pay more and take longer to pay off. 

The tradeoff here is between mental wins and financial wins. 

While I’m not going to say that the snowball method is never the right answer, it shouldn’t be the standard advice. You need to understand the financial ramifications before deciding what is right for you. 

I help my coaching clients look at the whole picture to come up with a strategy that is right for them. We analyze the financial aspects (how much it will cost) as well as habits, feelings, and other circumstances that surround their debts. 

He thinks debt is always bad

I follow Dave Ramsey on Instagram and yesterday alone I found two posts advising that one should never finance a car and NEVER get student loans. That’s on top of his constant admonishments against the use of credit cards. 

While it’s true that people can and do get into trouble with overextending themselves with debt, it is not true that debt is always bad. 

This unyielding advice is in line with the conservative Christian idea that the solution to bad behavior is to remove or prohibit the source entirely. It comes from a belief that humans cannot overcome temptation and the only way to avoid sinning is to avoid the cause. In this case, credit cards and debt are seen as the cause of overspending and financial trouble and therefore must always be avoided. 

This worldview fails to acknowledge that credit cards and debt can be used responsibly and can even be helpful financial tools. 

Student loans can help people significantly increase their earning potential and get out of poverty. 

Car loans can enable people to have a reliable vehicle so they can get to work or school. 

Mortgages can help people start building up equity and increase their net worth. 

Credit cards offer additional security protections and help you increase your credit score. 

As long as you are responsible, make all of your payments in full on time, and don’t overextend yourself, debt is not a problem. 

In fact, sometimes taking on a mortgage or car payment rather than paying cash in full can be a better financial decision. Rather than depleting your savings all at once, you can reallocate your money so that it can grow. Financing your car or house can free up money you can save for retirement. 

Dave Ramsey doesn’t get what life is really like for average people

Yes, Dave Ramsey has had personal experience with debt and bankruptcy. BUT before he declared bankruptcy he was making $250,000 a year and by the age of 26 had a net worth of over a million dollars. (https://www.daveramsey.com/careers/about-dave) When you have the ability to make that kind of money, it is much easier to pay off debt and get back on track. 

Most people are not in that situation. His experience, while certainly teaching him valid tools for attaining what he calls “financial peace,” are not the experiences of everyday people struggling to find enough money to dig themselves out of the hole of debt. 

For evidence of his lack of understanding the plight of people who are struggling economically, look no further than his insensitive comments on Fox a few weeks ago: “I don’t believe in a stimulus check, because if $600 or $1,400 changes your life, you were pretty much screwed already.” 

When Ramsey yells at you for taking on student loans to invest in your future, he’s not understanding that those student loans may be the only thing giving you a chance to improve your financial position. He’s not taking into account the real struggles of paying for medical insurance that will keep you out of crippling debt when a catastrophic medical emergency hits. 

Things have changed a lot since Dave Ramsey was declaring bankruptcy and sometimes circumstances beyond your control derail your best laid plans. And that’s no reason to make people feel like crap.

Dave Ramsey’s no-nonsense approach and kick in the butt are exactly what some people need, but if you’re looking for a place to learn about personal finance and get tools that leave out the shame, I hope you’ll follow me. 

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