Budgeting / Essays & Confessions / Relationships

5 Reasons Why The Dave Ramsey Method Didn’t Work For Me

By Monday, October 05, 2020

Photo of fanning money in front of face

Dave Ramsey is touted as the “get out of debt fast” guru. Most likely, you’ve heard about his show, read his books or even done the Dave Ramsey program. It’s not rocket science.  Basically, you switch to an all-cash payment system, budget your expenses to the T, and focus on “snow-balling” your debt payments. It’s a great plan; I know multiple people who have had success with it and continue to use it long after their debt has been reduced to just an ongoing mortgage payment. So I tried it — I really did — but it just didn’t work for me. Here’s why:

1.  Credit Cards Are More Convenient Than Cash

Ok, this is a no-brainer and honestly, this is part of the reason why a cash-based program like Dave Ramsey’s works for so many people. The ease of payment distances you from the actual money outflow so you don’t feel the “sting” of the purchase. Credit cards are super simple to use – you don’t have to wait around at the register while you count out your nickels and dimes, and wait for the cashier to count out their nickels and dimes. Plus, online purchases are quick and easy as well (although Ramsey does suggest using a debit card for the “limited” purchases you make online.)

You can even use platforms like Amazon that save your information and a purchase can be made in one-click – talk about a time saver! Plus, I have found myself purchasing online more this year because of COVID.  Aside from the grocery store or Wal-Mart, these days, I rarely go shopping. Instead, I can research and compare options online and skip the stores.  I have both a Chase and Discover card because of the rewards offered by using them; the cashback program is literally free money for what we are spending anyway. If we used a cash-only system, as advised by Ramsey, we would not have access to those extra bonuses. I know some people who use their cards to rack up airline miles and plan their entire family vacation each year based on these miles.  Essentially, you are flying for free! Of course, you have to be purposeful and pay off your balance each month and to avoid high-interest rates and going into debt. However, if you are paying your balance off each month, and using your card(s) wisely, it can be a very useful financial tool. 

Not to mention I haven’t stepped foot in a bank or drove to an ATM in literally years!  Seriously, I know someone who currently follows the Dave Ramsey method and plans two weekly trips to the bank. I don’t have time for that (and honestly, carrying around a bunch of cash gives me mugging vibes!)  For my husband and me, the benefits just didn’t outweigh the hassle. 

2.  I Had “Healthy” Financial Habits Already

If you read Dave Ramsey’s book, one of his top recommendations — or “rules,” if you will — is to buy used cars. The drop in value as soon as you drive a new car off the lot is ridiculous.  Good thing my husband and I both had used cars coming into our marriage, and we really don’t plan to buy a brand-new car anytime soon.  I mean, maybe when we are rich and it doesn’t matter, right? One can dream…  But really, we take care of our cars, get them serviced regularly and budget each month for routine maintenance and repairs. Another aspect Ramsey emphasizes is the reduction or limitation of “frivolous” spending. This means no dining out, not going to the movies, no extravagant gifts, etc. Basically, live simply (which sometimes feels like living in boredom). It’s not.  Believe me, it’s not that hard.  You get used to cooking from home, having a potluck get-together instead of meeting up with friends at a trendy restaurant downtown, and substituting a simple walk in the park for a date night movie.  Also, coffee is coffee. Buy a French press and make coffee from home. Dining out eventually becomes somewhat of a special occasion (and support local as much as possible when you do, please!).  

A coffee date means catching up with a valuable friend, instead of waiting in a drive-thru running late for work each morning. It really does change the way you value and appreciate those “little” things. Luckily, my husband and I already were pinching pennies and limiting these expenses so Ramsey telling us to do so really had no impact on us.  We also had debt.  Like many others, we had school loans and a car loan, but we made payments on time and put extra money towards it whenever possible. No way was I going to owe more than I took out, once that interest-free grace period was over!  If you have loans or debt, do yourself a favor and know the terms – not all loans are created equal!

3. My Rolling Budget Simply Wasn’t Compatible

In his program and books, Dave Ramsey gives worksheets for developing a monthly budget.  It’s specific and detailed. The premise is that you write down literally everything you use your money on. The specifics help guide you to know exactly how much you spend each month and when to know if a purchase is worthy of your money or not. The cash aspect of the program means when you are out of cash, you are out of money — period.  I don’t agree with this thought process. Obviously, if you are in debt and won’t be able to make a credit card payment, don’t over-spend.  Simple math, right?  But when you do have some savings or “extra” money, I think you should take advantage of a sale on something that you know you will be buying in a month or two anyway.  

Our household operates under a rolling budget. In simple terms, if we go over in say, food/grocery expenses one month, it’s ok, because we just take that into account in the coming months. We are looking at the big picture and trying to make progress long-term, not just for that month. In my home, we track every single expense in our budget spreadsheet. We know where our money is going at all times, and when we have, for example, a month of high medical expenses, we know to decrease our trips to the chiropractor or massage therapist in the next several months to make up for it.  We know that being diligent will even things out and get us back on track despite a “bad month”. 

4. It Requires 100% Commitment

I know, I know. If it hurts, it’s working. The more effort you put in, the more you get out of it. I get it. But I just can’t get on board with that logic, and half the reason why the Ramsey method works for so many people is because it forces you to think about money constantly while working really hard to save or gain it. It shows the results of your efforts as you pay off debt and build savings. However, I think you can still accomplish these financial goals without the drastic measures he prescribes. When I tried doing the Dave Ramsey method, it was too hard to have my husband and myself follow all of the “rules”.  I will admit that if it were just me, maybe I could have had more success.  Obviously, when more people are involved, it takes more coordination, communication, and overall moving parts. I also think this works better for people of a certain mindset. Some people I know from college went through money like it was nothing, and after good ol’ mom and dad’s money was gone, they racked up credit card debt, in an effort to still live a pricey lifestyle.  For people like this, I can imagine how a strict, no-excuses program would be beneficial. It literally teaches you to think about money differently, and it trains your brain through repetition. But for my household, the “buy-in” just wasn’t there when we couldn’t see substantial enough evidence of its worth. 

5. We Want Our Money to Work for Us

Not all debt is bad. Some people may disagree, and this mentality certainly doesn’t jive with the premises in Ramsey’s book. He is trying to help people become debt-free — sweet and simple.  I think everyone can agree that credit card debt is not desirable (hello, sky-high interest rates)!  But he goes so far as to suggest buying cars with cash and even a home. Now, if you have lots of extra cash laying around, by all means, go buy a car with 100% cash. But my husband and I agree that we would lean towards signing a low-interest loan over pulling from savings. If you have good credit, there are loan options available that are interest-free for the first year. This allows us to leave our money in savings and invested so that we can be making money instead of taking it all out for a cash purchase. Usually, you can make about 7% on stocks and sign up for a loan with a lower interest rate. Obviously, you need to be careful and not get a loan that is too big for you, and you need to be reasonable. We can’t all live in mansions and drive Porsches. Again, this is what is comfortable to us and is not necessarily for everyone. To each his (or her) own, right? 

So, is Dave Ramsey wrong? Heck no! He has helped millions of people get out of debt! He knows his stuff. I think everyone can glean some helpful takeaways from his books, programs, show, etc. However, at the end of the day, financial management comes down to a belief and operating system that works for your household.  This includes habits (both past and present), thought-processes, and comfort level.  After giving it the old college try, I can confidently say that his program isn’t for me, but if interested, I suggest you try it for yourself! Who knows, you may become a millionaire. But if you’re like me, you’ll develop your own personal approach that works just as well. 

Jessica is a busy stay-at-home mom of two toddlers and wife to an Air Force acquisitions officer.  My days are filled with lots of crying and whining, house chores, and cooking —  and plenty of coffee and tea!  With any spare time, I am constantly reading: blogs, TFD, and books, books, books!  I call the mountains home and try to find balance in each day: with food, exercise, self-care, and spending.  

Image via Pexels

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