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I disagree with Dave Ramsey! (It's a bit shocking coming from someone who got their Certified Financial Counselor designation from him 15 years ago.)
Money guru, Dave Ramsey, has been a prominent voice in the personal finance space for over 20 years. Much of his advice is solid. But after coaching thousands of couples and divorcing women, I've realized that particular pieces of Dave’s advice can be damaging to people's long-term financial well-being.
In this podcast, I break down these points of contention and give you an alternative point of view from my many years of being "on the front lines" of personal finance.
I disagree with Dave Ramsey on these things:
You have to use “Gazelle Intensity” to get out of debt.
Dave advocates getting extreme, cutting your spending to the bone, working overtime or a 2nd job, and “selling so much stuff, the kids think they’re next.” The problem?
Most people don’t have the stamina to do that for months or even years at a time. They burn out and abandon their efforts altogether. In fact, my first paid coaching clients were Financial Peace University dropouts!
My take? Slow and steady wins the marathon! Create a balanced plan to pay off debt while enjoying life. Refinance your debt to accelerate the process.
Never use credit cards.
Dave doesn’t want you to use credit cards at all! He doesn’t think that anyone can use them responsibly. Yes, some people get out of control. But others use them to their advantage to purchase with 0% for X months, or to earn cash back and other rewards. Plus, credit cards provide more fraud protection than debit cards, and cash can be stolen.
My take? You’re a grown adult, you can decide for yourself if and when you’ll use a credit card.
Stop contributing to retirement while paying off your non-mortgage debt.
Dave recommends putting all your muscle into paying off debt, which includes temporarily stopping retirement contributions. I strongly object to this one! (As do all of my financial planner friends.) If your company matches, you’re forfeiting FREE money. Plus, even small contributions compound to large amounts over time.
Find out my take on balancing debt payoff and retirement investing by listening to the podcast. (I also reveal my beef with Dave's advice on e-funds and the thing he says to never buy unless you're a millionaire.)
Here's the bottom line: Don’t blindly follow ANY financial guru or expert verbatim! Listen, learn, and take what works for you. I am so grateful for the Christine Luken fans out there! But I never want blind followers who are “Christine Luken Fanatics.”
Related: Entrepreneurs, Know Your Numbers!