Millions swear by Dave Ramsey’s advice—but what if following it blindly is costing you more than you realize?
In this episode, Steve opens up a respectful but honest conversation about:
- Why Dave’s advice works for some… and hurts others.
- The hidden cost of the “pay it all off first” mindset.
- Why relying only on debit cards might be riskier than you think.
- What the U.S. Constitution says about bankruptcy (yes, really).
- How lost retirement time can quietly rob you of a million dollars.
- The moral guilt around debt—and whether it’s helping or harming you.
We’re not here to bash Dave—we’re here to question what’s right for you. Because financial freedom doesn’t come from one-size-fits-all advice. It comes from critical thinking, compassion, and math that actually works.
🧠 It’s not about rejecting everything Ramsey teaches—it’s about making room for options he often leaves out. Like legal bankruptcy relief, better credit habits, and protecting your future instead of punishing your past.
This isn’t a takedown. It’s a talk. And if you’ve ever felt overwhelmed trying to “do the right thing” financially, this might be the episode that finally sets you free.
🎧 Listen in and decide for yourself.
Here are the two links I mentioned in the podcast:
Those That File for Bankruptcy Do Better: https://getoutofdebt.org/86125/those-that-file-bankruptcy-do-better-than-those-that-dont
Pound Foolish: https://www.amazon.com/Pound-Foolish-Exposing-Personal-Industry/dp/159184679X/
Transcript
[0:00] Hey there, friends. Steve here. If you’re a returning listener,
[0:05] welcome back, and always great to have you with me. If this is your first time, go ahead and boop that like button. Give the episode a little love. It helps more people find these honest, no-pressure conversations. And hey, swing by getoutofdebt.org for the show guide and all sorts of tools to help you move forward.
[0:27] Today, we’re tackling a big, big topic One that is probably going to stir some feelings Today, we’re talking about Dave Ramsey, Now, before I go any further, let me just say something up front, What I’m about to say about Dave Ramsey may trigger some of you And I totally understand that, A lot of folks are deeply invested in his message It feels like common sense, it’s rooted in faith, and for many, it’s been the first lifeline they’ve had when it comes to taking control of their money. But all I ask is that you do two things. Number one, listen with an open mind. And number two, independently research what I’m about to share.
[1:17] Come up with your own opinion, not one that anyone, including me, hands to you. Because your future deserves your critical thinking Alright, let’s just dive in.
[1:31] Let’s get something straight right off the bat. Dave Ramsey has helped millions of people. He’s a strong voice in the personal finance space, and he’s gotten folks to pay attention to their money, take control, and stop living paycheck to paycheck. That’s not nothing. That’s huge. But just because someone has a big microphone and a passionate following doesn’t mean they’re always right for you. What bothers me is this idea that there’s only one right way to get out of debt, And that you should follow it like a religion, Cut up all your credit cards, live on rice and beans And suffer for 5 or 10 years Before you even think about living again.
[2:17] And that’s the part that really gets me That lost time You see, it could cost you over a million dollars in lost retirement We’ll get to that in a second, If you’ve ever turned on the radio, watched YouTube, or strolled through a personal finance aisle at a bookstore, you’ve seen them. There’s Dave. Bold voice, strong opinions, and a step-by-step plan known as the baby steps. Or as I like to call it, tiny feet. He created the debt snowball, encouraging people to pay off the smallest debts first for momentum. That strategy works for a lot of folks. No argument there. But what happens when the plan doesn’t work for you? Or worse, what if the plan actually makes things harder in the long run?
[3:09] Let’s keep it balanced. Dave’s done a lot of good. But he’s also received valid criticism over the years, even from former followers and finance journalists. Dave says never use credit cards, instead use debit cards, so you’re only spending what you have. But from where I sit, that’s terrible advice. Debit cards don’t build credit. You could spend your whole life swiping and still get denied for a mortgage or rental. They offer fewer consumer protections. If someone gets your debit card info, they have direct access into your checking account. That’s like handing your house key to a stranger. You don’t get rewards. Unlike credit cards, you get nothing back. And when people say, but Steve, I can’t trust myself with a credit card. I get it, but let’s reframe that. You know, if you can own sharp kitchen knives and not stab people with them, or you can drive your car down a road and stay on your side of a painted line, then guess what? You have the opportunity and the ability to use a credit card responsibly. Use it. pay it off weekly or daily or monthly. But don’t write off a tool just because it can be misused.
[4:30] Dave frames bankruptcy as a moral failure, something that we should avoid at all costs. But here’s the truth. Not only did Dave file bankruptcy, but bankruptcy is a legal tool. And it’s so important it’s even written into the U.S. Constitution. Don’t believe me? Look it up. That’s right. Our founders recognized that sometimes people need a fresh start. And in many cases, it’s the smartest option you have. In fact, I have a post on getoutofdebt.org Where the Federal Reserve found that people who file bankruptcy Actually recover faster and do better financially, I’ll put a link to it in the description for you.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
[5:13] Now let me be clear I am not saying everyone should file bankruptcy, But I do believe Dave and anyone giving serious financial advice Should present it as an equal option worth investigating Whether it’s right for you depends entirely on your situation, Telling people to avoid bankruptcy no matter what is like Having a bias against life preservers And telling a drowning person, don’t grab it, You’ve got to use the tools available to keep yourself afloat, I’ve seen people spend 7, 10 years paying back debt out of guilt And end up with nothing Meanwhile, others filed bankruptcy, started fresh, and began building savings immediately. And here’s something I’ve always wondered. How many people in their 20s, 30s, and 40s followed the pay-it-all-off advice and in doing so unknowingly threw away a sizable retirement fund? Those are the people I feel bad for because they were trying to do the right thing. But the right thing for who?
[6:22] Some folks argue that people should pay every penny because they made a promise to the creditor. And I get that. Morals matter. But is it really how life works? I mean, don’t people also have a right to do what’s best for their future, what’s allowed under the law, and to protect their finances for the years when they’ll need it most? Is it more moral to pay now and fail later? And let’s not forget, some advice in this space has even encouraged people to stay in financially strained or even toxic relationships just to stick to the plan That’s a controversial stance, and potentially harmful if not evaluated carefully, People deserve options that put their safety and long-term well-being first And that’s a serious question worth thinking about.
[7:17] Years ago, I interviewed Helene Olin, author of Pound Foolish, exposing the dark side of the personal finance industry. In her book, which I’ll leave a link to in the description, she takes a hard look at personal finance gurus like Dave Ramsey and points out that a lot of the advice that people follow is more about emotional appeal than actual outcomes. Olin’s work is a reminder that just because something sounds motivational doesn’t mean it’s the most effective strategy. And here’s the truth. Emotion is the worst accountant. We’ve got to stop making decisions from guilt or shame and start looking at what the math says. After all, as I’ve said all my many decades of helping people, debt is just math wrapped in emotion.
[8:07] So this is the part that keeps me up at night. You’re told to suffer first. Rice and beans, no credit, no joy. Just pay off all the debt and maybe start saving for retirement. But here’s the math. Let’s say you’re 35. You finally pay off your debt by 45. Sounds great, right? Except you just missed the most powerful compounding years of your life. I’ve got a calculator on getoutofdebt.org that shows how much that delay could cost you. And for a lot of people, it’s over a million dollars. That’s a huge mistake. That’s not being dramatic. That’s just the math. So let me be fair. You know, Dave gets stuff right, too. People do need structure. The debt snowball does work for motivation. And living below your means, it’s always smart. But when it comes to credit use, bankruptcy, or long-term investing, the advice needs to be updated for the real world. Meet Mark. He’s 38. He follows the baby steps perfectly. No debt, no credit cards, strict budget, but it takes him seven years to become debt-free. Meanwhile, his co-worker, let’s call her Sarah. She files bankruptcy at 38, starts saving right away, and by 45, she’s got 200K in retirement. Two people, two strategies, two very different outcomes.
[9:36] So remember that million-dollar mistake we talked about at the beginning?
[9:40] It doesn’t have to be your story. All I ask is this Don’t follow a voice just because it’s loud Follow the numbers, ask hard questions Make decisions that actually serve you and your future And don’t do just what’s popular Do what works.
[10:04] So that’s it for today, friends. If this resonated with you, I’d love to hear your thoughts. Have you followed advice that felt right but didn’t add up? Drop a comment. Let’s talk about it. And before you go, boop that like button, subscribe, and check out getoutofdebt.org for calculators, guides, real-world help, and no judgment and no shame, just options. Until next time, stay awesome, be kind to one another, and remember to do good things. See ya. Got a money question keeping you up at night? Well, don’t just Google it. Get real answers from real people who actually know what they’re talking about. Head to getoutofdebt.org slash podcast to ask your question and you might hear it on an upcoming episode. But hey, if you’d rather keep it private, Damon Day has your back. Visit d-a-m-o-n-d-a-y.com because getting out of debt is easier with the right help. That’s getoutofdebt.org slash podcast, where smart money questions lead to smarter money moves.
