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StitcherYou’ve probably heard of Dave Ramsey and his famous Baby Steps. But do you have to follow someone else’s financial blueprint to make progress with your money? In this rerun, Jen and Jill revisit Dave Ramsey’s advice, where they agree, where they’d do things differently, and how finding other voices in personal finance helped them figure out what actually works for them.
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Why Everyone Needs Dave Ramsey and Why You Should Ignore Him
This article by Choose FI highlights Dave Ramsey’s popular “baby steps” or “blueprint” in what we do with our finances, which might be outdated and no longer serve you in 2024.
What Jen + Jill have to say:
Jill suggests updating the starter emergency fund (Baby Step #1) recommendation from $1,000 to around $2,000, considering the changes in income and the cost of goods over the past 30 years. Jen advocates for the debt snowball method in Baby Step #2, emphasizing its focus on behavioral psychology and the importance of building confidence with upfront wins.
Jen and Jill also discuss steps, highlighting the significance of intentional financial planning, critiquing Dave Ramsey’s investment advice for actively managed funds, and recommending a 529 plan for funding children’s education. They also express personal preferences for steps like paying off the house (Baby Step #6) and endorse the wealth-building and giving aspects of Baby Step #7.
A Defense of Dave Ramsey
This article by Campfire Homesteading stands out as one of the few online articles defending Dave Ramsey that hasn’t been published by Ramsey Solutions.
What Jen + Jill have to say:
Frugal Friends wants to give both sides and quoting this article is not meant to promote approaches or strategies Jen and Jill don’t agree with. There is no need to completely vilify a person for the things that don’t work for us. Jill highlights key critiques of Dave Ramsey, including accusations of being outdated, not considering diverse financial situations, and using harsh motivational methods. Finding other resources you can relate to, rejecting shame, and favoring kindness for positive change.
Jen notes Ramsey’s use of strategies perceived as angry and shame-inducing, contrasting it with her preference for encouragement, flexibility, grace, and community. Finding other resources you can relate to, rejecting shame, and favoring kindness for positive change. Frugal Friends prioritize psychological well-being in their approach, acknowledging that while Dave’s methods may be efficient, they can also be unhealthy. They advocate for a path that may take longer but results in fewer emotional scars.
Some of the most helpful advice we’ve received in ‘thinking for ourselves’ on our financial journey
Jill realized her own circumstances were different from the people she used to hear personal finance advice from, so she sought out other resources, and they taught her permission for freedom, which is the opposite of shame. Same as Jen, who discovered podcasts such as Choose FI and Stacking Benjamins that have helped her in the beginning of learning more about personal finance in a deeper aspect.
Bill of the Week
Thank you Kate for sharing your bill of the week about your first mortgage payment and ability to pay 10% down payment! Congrats!
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