Dave Ramsey Tells Millions What to Do With Their Money. People Under 40 Say He’s Wrong.

On their own for the first time, young professionals are craving sound financial advice. They just don’t want to hear it from Dave Ramsey.

Ramsey, the well-known and intensely followed 63-year-old conservative Christian radio host, has 4.4 million Instagram followers, 1.9 million TikTok followers and legions more who listen to his radio shows and podcasts. His message is brutal and direct: Avoid debt at all costs. Pay for everything in cash. Embrace frugality.

Plenty of 20- and 30-year-olds are pushing back, largely on TikTok. The hashtag #daveramseywouldntapprove, for instance, has 66.8 million views. Many say they don’t want to eat rice and beans every night—a popular Ramsey trope —or hold down multiple jobs to pay off loans. They also say Ramsey is out of touch with their reality.

Rising inflation has led to surging prices for groceries, cars and many essentials. The cost of a college education has skyrocketed in two decades, with the average student debt for federal loans at $37,000, according to the Education Department. Overall debts for Americans in their 30s jumped 27% from late 2019 to early 2023 —steeper than for any other age group. And home prices have risen considerably, while wages haven’t kept pace.

“What Dave Ramsey really misses is any kind of social context,” says Morgan Sanner, a 26-year-old who runs a résumé-advice company in Columbus, Ohio, and has shared her feelings about Ramsey on TikTok.

She began paying off $48,000 in student loans (a Ramsey do ) and also took out a loan to buy a 2016 Honda (a Ramsey don’t ). Her rationale was that it was safer to pay extra for a more reliable car than a junker she could buy with cash. She feels these sorts of real-life decisions don’t factor into his advice. Her video about this has 875,000 views.

Through a spokeswoman, Ramsey declined an interview request. Direct messages to Ramsey went unanswered.

For Ramsey—whose TikTok posts often contain incendiary tidbits from his radio show—the pushback might be part of the plan. After all, uncomfortable advice is a key component of his success.

‘Pretty much screwed already’

Naiomi Israel began watching Dave Ramsey’s videos on YouTube when she was in college at New York University, before TikTok became the go-to platform. (He has more than 500,000 subscribers on YouTube.)

“Not knowing about money feels scary, especially when you’re a young adult and have to pay your bills,” she says. “You wonder, ‘Should I go on a trip or invest in the S&P 500?’ I’m just looking for the right answers.”

Israel, who now at age 23 works for a company that develops finance curricula for schools, says she was initially drawn in by Ramsey’s no-nonsense advice. He recommends setting aside some money for emergencies. She did.

But eventually, some of his messages triggered a different response from her: “Wait, what?”

When she saw a comment from Ramsey online about how people receiving pandemic stimulus payments were “ pretty much screwed already ,” Israel felt it came across as shaming people. The pandemic shutdowns ended a decade-long economic expansion for Black Americans , a disproportionate number of whom lost their jobs and relied on those checks.

“Moralising financial decisions is very damaging to marginalised groups,” says Israel, who is Black.

From bankruptcy to broadcasting

Ramsey’s anti-debt evangelism arose from personal circumstances. He says on his website that he took on too much debt while accumulating real estate as a young man. He also bought a Jaguar, jewellery for his wife and a trip to Hawaii. In 1988, he filed for bankruptcy.

How did rich people stay rich? By not paying interest to banks, he concluded.

He started a radio show in 1992 to answer callers’ money questions. It became the top-rated show in Nashville, Tenn., and eventually became a nationally syndicated call-in program with about 20 million weekly listeners.

The radio program begot Ramsey Solutions, a 1,000-person company that encompasses a podcast, 23 money-management books, a budgeting app and personal-financial coaching. Dozens of Facebook groups are devoted to following his methods. Ramsey’s net worth is estimated at more than $200 million.

No credit scores?

Many young adults scratch their heads over his advice that people should let their credit scores dwindle and die .

People need a good credit score, says Mandy Phillips, a 39-year-old residential mortgage loan originator in Redding, Calif. She uses TikTok and other social media to educate millennials and Gen Z about home buying. Scores are vital when applying for mortgages and rentals.

She also takes issue with Ramsey’s advice to only obtain a home loan if you can take out a 15-year fixed-rate mortgage with a down payment of at least 10%. Few younger buyers can pay the large monthly bills of shorter-term mortgages.

“That may have worked years ago in the ’80s and ’90s, but that’s not something that is achievable for the average American,” Phillips says.

Ramsey acknowledges on his website that his views aren’t always in step with conventional economic thinking. “I have an unusual way of looking at the world,” he notes, nodding to his past debt troubles.

Housing is a particularly hot-button topic. He advises people to only buy a house with their lawfully wedded spouse. Yet many young adults are pooling their finances with partners, friends or roommates to buy their first homes.

The debt snowball

Ramsey is perhaps best known for advocating a “ debt snowball method ”: People with multiple loans pay off the smallest balances first, regardless of interest rate. As you knock out each loan, he says, the money you have to put toward larger debt snowballs. Seeing small wins motivates people to keep going, he says.

Conventional economic theory would be to pay off the highest-interest loans first, says James Choi, a finance professor at the Yale School of Management, who has studied the advice of popular finance gurus.

“What Dave Ramsey would say is, ‘I don’t care if paying down the highest-interest debt first is cheapest, because if you give up midway through, that’s more expensive.’ I think the jury is out on that,” Choi says.

Ramsey’s advice has helped a lot of people reduce their spending.

A University of Copenhagen researcher conducted a study that found that when Ramsey’s radio show entered new markets between 2004 and 2019, households in those cities decreased their monthly expenditures by at least 5.4%.

Embracing debt

Ramsey’s save-not-spend message sounds logical, young adults say. It’s his all-or-nothing approach that doesn’t work for them.

Kate Hindman, a 31-year-old administrative assistant in Pasadena, Calif., who has taken an anti-Ramsey stance on TikTok, ended up with $30,000 in credit-card debt after she and her husband faced income-reducing job changes. They’ve since turned it into a consolidation loan with an 8% interest rate and pay about $1,200 a month.

She wonders if the debt aversion is generational. Perhaps younger people are less willing to make huge sacrifices to be debt-free. Maybe carrying some amount of debt forever is a new normal. Hindman’s video about her credit-card debt journey—and how it doesn’t align with Ramsey’s perspective—has more than 745,000 views.

Hindman said in the TikTok video: “I’m sorry, I’m not willing to do anything to get out of debt. I’m not willing to eat rice and beans every day.”