When it comes to financial celebrities (because that is clearly a thing), Dave Ramsey is on top of the list. He has made a huge career for himself and has helped many get out of debt and on a path towards financial freedom. He definitely provides some great advice, however there are a few places I strongly disagree. (Gasp!) Yes, I know… as Dave says… anyone who disagrees with him is a “complete moron”, but nevertheless, here are my gripes.

1. Never ever use a credit card: Dave HATES credit cards. He’s quite passionate about it. He thinks “responsible use of a credit card doesn’t really exist” and “there’s no positive side to credit card use. Even if you pay the bill on time, you’re not beating the system”. Well frankly, I disagree.

First of all, irresponsible credit card usage can absolutely destroy a person’s financial health. However, responsible credit card usage can help you build credit, which is important when buying a house or renting an apartment. Secondly, credit cards can come with fantastic perks. Credit cards might not be free, but I have found substantial value in the benefits (all without ever paying anything in credit card interest). While it is important to read the details and understand the annual fees and obligations (that 100K point bonus doesn’t come without doing anything), there is real value in credit card usage.

2. Start with an emergency fund of $1,000: Dave believes your emergency fund should be $1,000 while you have debt (including student debt) and then later built up to 3 – 6 months living expenses once all debts are paid off. I think waiting until you are out of debt is far too late to build up a solid emergency fund. For many, $1,000 would not be enough of a cushion to help them through this COVID-19 pandemic. Dave Ramsey’s $1,000 amount is arbitrary and not based on any individual situation. It will all depend on the size of your family, what and how you live and what makes you sleep comfortably at night. For one person it might be $1,000, for another $100,000.

3. The debt snowball: Dave believes you should list all your debts (excluding your home) from the smallest to largest balance. He then suggests making minimum payments on all your debts and putting extra money towards the smallest debt balance. Then, once the first and smallest debt is paid off, you can work towards the next largest debt. In Dave’s mind, this strategy allows you to celebrate small wins as you move towards debt freedom. However, this does not take into account the interest rates on the different payments. I think a better plan is to first pay off the highest-interest debts that are non tax deductible and then move down the ladder to the lower interest rates debts. This way, you’ll end up paying less in interest. Often this method is referred to as the debt avalanche method.

4. Retirement savings: Now this is where things get heated. Dave believes you should only start saving for retirement once all of your debts have been paid AND you have a 3 – 6 month emergency fund. I understand the balance between saving for retirement and paying off high interest debt, but I think there are a lot of other considerations that Dave ignores.

Many companies offer a 401(k) contribution match. This is incredibly valuable. It’s free money! By prioritizing debt (and not contributing to your 401(k)) you are missing out on an incredible opportunity. The best advice I give my peers regarding retirement is to start early. As Warren Buffet said, it’s all about time IN the market, not timing the market.

5. Living with debt: Dave believes that while you’re paying off debt, you should essentially live in seclusion. Never go on vacation. Never go to a restaurant. Never go shopping. (Sorta sounds like life in a pandemic?!) While sure it is important to live on a budget and pay off debt, you gotta live a little! Don’t get me wrong, you should work towards paying off your debts, but you should also enjoy time out and about with friends and family. (Especially once we are actually allowed out of our houses.) There’s a balance between saving and enjoying and I don’t follow Dave’s preaching that it should be one or the other while you have debt.

6. Home ownership: Dave thinks you should only buy a house if you can do so with all cash. Good joke, Dave. If you’re like the majority of us, putting down 20% is a huge accomplishment. It is important to understand the full cost of ownership (mortgage, property taxes, insurance, monthly upkeep, etc.) when determining if a house is “right” for you.

Overall, I think the advice you follow will greatly depend on your individual’s situation. This is why I find it hard to follow Dave’s blanket advice. Find the right balance for you. It’s ok if you don’t listen to Dave.