10 Life Hacks From Dave Ramsey That Will Save You Money
Written by
Heather Altamirano
Edited by
Chris Cluff
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Dave Ramsey has helped countless people get out of debt, adopt healthier financial habits and work toward financial freedom. The personal finance expert is known for his straightforward, practical tips that do require sacrifice and discipline, like cutting down everyday expenses, keeping track of every dollar spent and living minimally.
Ramsey has structured his life around tough strategies and continues to guide people out of financially bad situations. From building an emergency fund to removing debt, here are 10 life hacks Ramsey swears by.
Have a Budget
Before investing, spending or doing anything with your money, Ramsey says you need a plan and goals to work toward. Not knowing where your hard-earned cash goes is like throwing money away.
“But budgeting is seriously so empowering,” Ramsey Solutions staff wrote in a blog post. “And that’s because when you budget, you are telling your money where to go so you can stop wondering where it went.”
Follow the 7 Baby Steps
Ramsey is famous for his seven baby steps and urges his millions of followers to use the approach.
- Have a $1,000 emergency fund
- Pay off all debt — except for the mortgage — using the snowball method (smallest to largest debt)
- Save three to six months of expenses
- Invest 15% of your household income for retirement
- Save for your kid’s college fund
- Pay off your house
- Build wealth and give back to others
No Credit Cards
Ramsey is often perceived as a controversial figure due to his strict views on certain issues, such as avoiding the use of credit cards. He encourages people to pay cash for everything.
In a TikTok video, he said, “Personal finance is 80% behavior. It’s only 20% head knowledge. And several different studies have confirmed that when you pay for things with plastic, you spend more than you do with cash.”
Ramsey has always been adamant about not using credit cards and wrote back in 2019, “You don’t build wealth or save money by using credit cards, and you’re naïve if you think you’re going to play around with a multibillion-dollar industry and beat them at their own game. The only way to win against credit-card companies is by refusing to play!”
Do Not Go on Vacation When You’re in Debt
Everyone loves a fun-filled vacation, but they’re not cheap. Unless you’re out of debt, Ramsey disagrees with booking a trip.
“Vacations are great, but if you’re working on paying off debt or saving up your emergency fund, stay focused,” he wrote in a Facebook post. “Once you’re debt free, you’ll be able to save for really nice vacations and pay cash. Use that as motivation to pay off your debt quickly.”
He added, “But don’t forget, you still need to budget for it. I still budget for my trips. The best kind of vacation is the one you’re not still paying for after you’re back home.”
Do Not Buy a House Until You’re Married
Living with a partner before getting married is a common practice, but Ramsey warns against buying property together until officially tying the knot because it’s a major financial risk and it gets messy if things don’t work out.
In response to a person who asked Ramsey for financial advice on buying a house, he replied, “I will not advise you to buy a house with someone to whom you’re not married. You’re talking to a guy who’s been doing this for 35 years, and I’ve heard all the horror stories that go along with, ‘We bought the house together, but we didn’t make it to the altar together.’ Talk about an ugly breakup!”
Do Not Upgrade Your Car If It’s Totaled
In an episode of “The Ramsey Show,” the best-selling author reiterated dumb financial mistakes people make — and one of them is upgrading your car after an accident. He explained that if you’re driving a $6,000 car and it’s totaled, you get a check for that amount, but then people want to buy a car for more than what the check amount is.
“Suddenly $6,000 cars aren’t good enough for you. That’s dumb,” he said.
If the $6,000 worked fine before, he said, you can find another one for that price.
Buy a Home If You’re Financially Ready
The housing market has been a wild ride of high interest rates, low inventory and soaring housing prices. While things are shifting, buyers are still faced with challenges and many are waiting it out until costs drop. But Ramsey advises to do the opposite because waiting is a bad strategy.
In a blog post, Ramey Solutions stated, “While it’s always great to have a lower interest rate on your mortgage, that doesn’t mean you have to wait years to buy or sell a house — or to refinance if your current loan just isn’t working for you. You get to decide when to buy a house based on what’s right for you and your family — not the Fed.”
Stop Making This Big 401(k) Mistake
In an interview with Rebecca Mezistrano, producer of The Street, Ramsey shared that the biggest financial mishap people make with their 401(k) accounts is not staying in the market long enough.
“They freak out when the market goes down,” Ramsey said. “They stop, they start, they try to time the market.”
He said the “steady investor” does the best and people should stop trying to “time the market.”
“In spite of my emotions, in spite of anxiety, in spite of celebration when things are great on the market, I’m a steady investor,” he said.
Watch Your Online Spending
With a click of a button, we can have anything we want. Whether it’s a food delivery, a movie or a new pair of jeans, we have things on our doorstep in no time. But it’s easy to lose track of what you’re buying online and budgets can get blown quickly.
Ramsey Solutions offers the following to help save money:
- Delete shopping apps from your phone
- Think about a purchase overnight before buying
- Clear your cookies on your browser so you get fewer targeted ads
- Check in with your budgeting accountability partner
Married Couples Should Combine Finances
When it comes to married households, Ramsey strongly believes the only way to manage finances effectively is together — and incomes should be combined.
“My wife has not had an earned income for 30 years,” he said in a TikTok video. “She stayed home with our children. I do not have an income. We have an income. It’s as much hers as it is mine.”
He went on to explain that if his wife did get a job, her wages would be added to their income and shared equally.
“I don’t get more votes if I make more money,” he said. “We both have a vote.”
Ramsey said married couples aren’t roommates; and, to achieve financial success, both partners need to work together to contribute in different ways.
Ramsey’s money advice may seem drastic to some, but his approach can help others change their mindsets to keep more money in their pockets and make better financial choices that prepare them for retirement and help build long-term wealth.
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