Dave Ramsey’s Most Unpopular Financial Advice

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Dave Ramsey is a well-known financial personality whose YouTube channel has nearly 3 million subscribers. While his “Baby Steps” approach to financial planning gets rave reviews from most of his followers, there are times when some of the information discussed on the show gets panned by some viewers.

In a recent video, Ramsey’s daughter Rachel Cruze, along with co-host George Kamel, took a lighthearted look at some of the most unpopular financial advice on the channel, as noted by “mean tweets” the two received. Here are the tips generating the most hostility, along with an explanation of why the hosts still feel the advice is sound.

Couples Should Combine Finances

The first controversial opinion offered by the hosts is actually the subject of popular debate. Ramsey’s daughter Rachel has always advocated that couples should combine their finances, but some viewers complain that money should be divided by who earns it, and that sharing it isn’t a fair way to go.

Cruze and Kamel, however, suggest that couples share everything else anyway, and it shouldn’t be too big of a problem to simplify your financial life by combining your finances. They do both recommend, however, that each spouse keep a separate pile for their own individual expenditures, which can help alleviate some of the conflict that may arise through having all of the family money in a single bucket.

It’s Cheaper To Eat at Home

This one doesn’t seem like it should be too controversial, but apparently the hosts have been berated for suggesting that it’s cheaper to eat at home than to go out to a restaurant. Kamel noted that based on his real-world research, it costs him about $4 per serving to eat at home, but more than triple that, $13, to eat out.

Some of the complaints among the viewers were nonsensical, such as the suggestion that you can’t go to the grocery store and spend just $4, while others claimed that once you factor in your time, it “really” costs more to eat at home. But the hosts stuck to their guns that you can save a lot of money by eating at home instead of going out.

Don’t Use Credit Cards

The complaint against the often-quoted financial advice to avoid credit cards is that when used judiciously, you can actually earn more benefits out of using the right cards. While the hosts acknowledge that there is a scenario in which this could happen, for the average person, it involves too much financial planning and tracking of rewards and benefits to make sense.

If you were to slip just one month and start paying 20%-plus in interest on a credit card balance, it would likely negate your benefits right off the bat, so the hosts advocate avoiding the whole problem in the first place. Cruze’s advice to listeners is, “Don’t use a bank’s money, just use your money.”

Put $1,000 Into Your Emergency Fund

Critics of the Ramsey “$1,000 Emergency Fund” suggest that it’s not enough to pay for real-world emergencies. The hosts acknowledge that a $1,000 emergency fund won’t cover all of life’s surprise expenses, but they stress that that’s not the point.

A $1,000 emergency fund will cover many of your garden-variety emergencies, such as a broken window or a flat tire. This alone can help keep you out of debt. If you have bigger emergency expenses, you can stop funding your retirement plan to pay for them, or draw the money from other financial buckets you have been building up instead of your emergency fund. 

Use the Debt Snowball Method

One of the financial principles Ramsey is most associated with is the debt snowball method. According to Ramsey, you’ll pay off your debt faster if you attack the smallest balances first, rather than the debt costing you the highest interest rate.

Although the hosts acknowledge that the opposite is true mathematically, they stick by their claims that getting “wins” by knocking off your smallest balances first will motivate you to the point that you’re more likely to pay off your entire debt. 

Avoid Supporting Adult Children or Grandkids Financially

A bit controversially, the Ramsey co-hosts suggest that helping out adult children or grandkids financially is a mistake, particularly if your financial assistance comes in the form of a loan. They insist that loaning money to family members or sustaining them over the long run puts strain on those relationships, which are the most important in the world.

While they suggest that helping out seasonally or occasionally is OK, they stress that it becomes a problem when it becomes a pattern.

Pay Cash for Cars (and Buy Used Cars)

“The Ramsey Show” hosts endorse the idea of paying cash only for cars, and generally recommend buying used cars instead of new ones. They claim that viewers who buy new cars and take out extravagant loans are acting primarily out of vanity, and that while new cars are nice, the function of a vehicle is to get you from point A to point B, not to be showy.

Cruze in particular harps on the poor financial sense of paying interest on something that’s going down in value. As American culture is built around cars (and some would even say consumerism), this strategy draws a lot of flack from viewers.

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