The fifth post ever on 20somethingfinance (and one of the most popular to this day) was a disagreement with Dave Ramsey’s view on credit cards, which I think is short-sighted and actually a bit extreme. If you’re not comfortable with the risk, then don’t do it. “Dave and I have a bit of a history (I’ve written about him once and he has no idea who I am).”. There we go again with that cheapskate name-calling. We are happy renters and plan on being renters until at least our children go off to college (which we will help with but not cover entirely) or possibly even retirement. You say “The money is indeed not an investment, it is a type of self insurance.” I agree with what you literally said, but not what I think you MEANT. His 1,454 square foot garage is bigger than my entire home. pretty sure our net worth is not even 1/4 of that. We recommend 529 college savings plans or ESAs (Education Savings Accounts). That could be a few “free” hundreds of dollars at the end of the year. Cutting these revolving expenses is the easiest way to generate available money for emergency savings. So, no, DR does not intend that to say that investing is more important than paying off the mortgage. The income wouldn’t be to bad if we had RRSP room but of course we’ve maxed that out too (I’ll save that problem for another day). An environmental steward, he is not. If you actually take the FPU class or buy the DVDs, he says that you can include your employer’s match as part of the 15%. But then your not out of debt which is the whole point. How much are you willing to risk for a couple of points of interest (assuming your investment goes perfectly?). I got news for all you to smart for Dave’s advice people. If we only had $1,000 it would not be sufficient. Sorry, I’m an old guy, so bear with me. Dave Ramsey's 7 Baby Steps will show you how to save for emergencies, pay off all your debt for good, and build wealth. Don’t really understand how this is the “better version”. I will leave you with this. I was just curious to see if anything has changed for you or if there was another plan for you to follow? But that is because 50-80% af America has it’s collective financial head up it’s a$$. Best part? The snowball method is just easier to complete, motivationally speaking, for the majority of people. Take that money you were throwing at your debt and build a fully funded emergency fund that covers 3–6 months of your expenses. It’s just assumed that you should save for your kids college (because everyone goes to college) and that you should pay for it. *If you have no children, invest as much as possible into your own further education or retirement. Although now he does list them in order of priority. Dave Ramsey has helped thousands of people around the world to get out of debt. My piece of mind and confidence are with the stock market because even when it dips significantly, investors all over the world still know that the U.S. is the best place to invest money long term. My home is shelter. Who could possibly turn that down if they understand it? One months liquidity up front plus one months’ funds that will be available in a month, another in two months, … up to a month’s assets that will not be liquid for 5 months. People that choose to pay off the house early are removing the risk involved in having a mortgage sooner, and willing to give up the potential earnings to do it. But his very popular 7 baby-steps? Dave doesn’t get in to specifics on how much you should save for college, what percentage of your kids college you should pay for, or any other particulars. Get your employer’s full match first, potentially up to the maximum 401K contribution, before you look at IRA’s. He suggested that if you did pay off your home, then reinvest part of that idle money into a property and build equity and hopefully the value grows, too. I paid off my credit cards before listening to Dave and I did so using the mathematical method vs Dave’s snowball. I finally gave that up, took all the credit cards, gave her a debit card and put her in charge of paying bills every month. It’s fine to disagree, but don’t discourage people from using this system. Like a said, not a slam on what you said, but some clarifications. Risk is a matter of perspective. I think that it all depends on your situation. Millions of people have left their money worries behind by working this plan. Your emergency fund will cover those unexpected life events you can't plan for. Get a FREE Customized Plan for Your Money! . More than 25 years ago, Dave Ramsey fought his way out of bankruptcy and millions of dollars of debt. ex: The average person would be much less likely to spend $2k on an upgraded vacation/car or other discretionary expense if they only had $5k in their bank account vs $80k. But I would amend the rule to be something like this: “Complete one fifth of a fully-funded emergency fund.” You own nothing. It seems like some of us could have much larger portfolios if we investigate further, but who knew this stuff???? It is meant to spoon feed some of the very basic ideas to people who let their lifestyle inflation spin forward ahead of their finacial abilities. He has a syndicated radio show on over 500 stations, a plethora of books, a TV show on Fox Business, Sean-Connery good looks, and all kinds of high priced online courses and seminars that you can find out more about at his popular website, Daveramsey.com. Anyone can do it! If the market goes up, you’ve just increased your emergency fund. your emergency is covered. Actually no, I have listened to his podcast for a while and at least once an episode he clearly states “employer match first, then Roth, then traditional.” Podcast/radio show/Youtube channel totally free.

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