Dave Ramsey and I Disagree on This One BIG Thing
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- Опубликовано: 9 сен 2024
- In this video, I react to one of Dave Ramsey's most popular pieces of advice. ******Grab this month's budgeting printable at the Savvy Budget Girl Shop! ➡️ savvybudgetgir...
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About:
What does Dave Ramsey get wrong about the baby steps?
Disclaimer: I am not a financial advisor; this is simply what works for my family and me and how I like to budget. Please see the link for our disclaimer policy for all of our videos on the Savvy Budget Girl channel. savvybudgetgir...
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Hey Wendy, great topic! Came back to comment after watching. I definitely see both sides. I think it’s helpful to try to build the er fund beyond 1k and also pay off debt as much as your budget allows at the same time.
Agreed! Thanks for watching and commenting!
When I started my journey I started with Dave Ramsey exactly as he said, I paid off $8,000 in 9 months and had a 3 months emergency fund, then as I got educated about what it takes to buy a home in Canada I learnt I need a good credit history and credit score above 680 to qualify for a mortgage, so I'm back in debt. I also learnt that I need $1,000 for emergencies, $1000 for my tenant insurance deductible and also my business needs it's own emergency fund. I might need more for my health insurance deductible as well.
So Round 2 of financial independence I stopped listening to Dave Ramsey plus I'm in Canada and the country has an ENTIRE different financial system and strategies for debt management, mortgages and the complex disability system I'm tired of and feel stuck in until I can earn and invest enough to exit out of it.
Anytime I hear this caller is from Canada, I yell Canadians stop calling an American for advice.
You make a good point about the difference in systems. I wish you the best this time around!
I'm unemployed for the next two weeks. Don't have a pot to piss in right now, let alone a $1k emergency fund.
Life sux.
I'm sorry about the unemployment situation. But things are looking up for you as you start your new job in a couple of weeks. Just worry about one day at a time. God bless!
Your ears are open but you’re not listening. The 1k is for average emergencies. There’s no way to save up for a fully funded emergency fund if you’re in a massive amount of debt. You just end up in a vicious cycle of paying minimum payments or being behind and going further into debt. At 1k you can attack debt quicker. Pay more on principles instead of interest. And get out faster. If you lose your job FIND ANOTHER JOB. You can’t say he’s wrong if it’s working for the Majority of people. Also using your example if you have 20k Dave WOULD say save 1k but he would also say BUDGET the 19k. Not just smack it on debt and starve. If you listen to his show like you say you do you know this.
I appreciate your response. My analysis of Dave's recommendations come from listening to his show since the mid 2000s and hearing him give that exact advice about taking savings down to $1k and applying the rest to debt. As a former FPU student and coordinator, I am very familiar with his views of debt, savings, and money in general.
I also don't think he means for this to cover the average emergency. He stated in that video I reacted to that it wasn't meant to be enough. I just don't think $1k sitting in your bank account until you pay off debt is enough to properly handle most potential emergencies. Also, if you read his book and listen enough to his show, he also says that if you make $20k/year or less, then he only wants you to save $500.
Of course the answer to losing a job is to find another. I never implied that it wasn't. But there are people out here who have been struggling to find a job for 3 months or more. It took me and my husband 2 months to find our jobs and they still haven't started yet. That $1k would not have gone very far in between paychecks.
In the end, if you have to pay for an emergency and don't have the cash to fully fund it, most people will turn to debt to make up the difference. Dave knows this. My only point is that if you pay the minimums on your debt and save up the full emergency fund (of whatever length and amount you determine it to be), then you'll be a in stronger position to weather a job loss, government shutdown, and more without resorting to more debt because you only had $1k in your emergency fund.
Thank you for the comment. Have a great night!