Dave Ramsey Vs. Suze Orman: Should Your Financial Guru Be Changing His/Her Advice?


Should Financial Gurus Be Changing Advice?

In 2009, Suze Orman shocked a lot of people (including probably Dave Ramsey) and drummed up a lot of press when she changed her long-running stance on aggressively paying down credit card debt.

As many of you know, Suze has basically started to advise people to only pay the minimum payment on their credit cards and to instead increase their emergency fund to at least 8 months worth of expenses.

8 months… Really? Her justification is that many credit card companies are lowering limits and even canceling cards on those who pay them down.  She points out that if you lose your job due to the economy, you might not be able to access as much credit through the credit cards.  If you had a big juicy emergency fund, you’d be much better.  While the advice seems to be well-intentioned, I have a couple issues with it:

  1. Why 8 Months? For the majority of people, I think 8 months is a little extreme.  Especially considering they are struggling with credit card debt.  I’d be much more comfortable had she advised something more along the lines of an extra month of expenses.
  2. Increased Temptation. Suze is making the assumption that her audience can responsibly save up a large amount of money without finding an excuse to spend it.  Again, this is targeted at those people with outstanding credit card balances, meaning they’re already dealing with the issue of spending more than they make.  I know from experience that much more temptation exists when you have $10,000 in your emergency fund opposed to $1000.  That’s just a fact of life.
  3. Credit Cards Aren’t An Answer. I don’t think credit cards should be an answer, in the first place, to the solution of economic hardship.  Therefore, Suze’s whole justification falls a little short for me.  I prefer advice that suggests keeping a basic emergency fund and instead drastically cutting your lifestyle (ahead of time) in preparation for the possibility of losing your job.  After all, you can always go back to spending more than you earn once the economy rebounds.

Dave Ramsey’s advice hasn’t changed. Is that good or bad?

Dave Ramsey Total Money MakeoverIf I had to pick one financial guru that I agreed with the most, it would be Dave Ramsey.  Although, I can nit-pick some minor differences here and there, I’m a big fan of his overall guidance.  Lately, I’ve heard a lot of talk from both Ramsey and his devout followers about how his advice hasn’t changed.  His baby steps have always been and continue to be:

  1. $1000 Emergency Fund – Despite the economic conditions he’s stuck to this number in both prosperity and hardship. I am not sure why it’s just $1000 as it feels like it should be more like $5000 now in 2022 where inflation runs rampant.
  2. Debt Snowball Non-Mortgage Debt – Again, no change in how he’s advising people to attack debt.
  3. 3-6 months of expenses saved – Even after debt, Ramsey has suggested only 3-6 months.
  4. 15% for retirement – Ramsey hasn’t changed his investment strategies either.  He’s still a fan of mutual funds and has kept his 25%/25%/25%/25% diversification consistent.  He still hates gold, and still recommends a steady 15% at this initial level.
  5. College Funding – No change in when he suggests to prioritize college.
  6. Pay off your home early – He has also remained consistent on his policy to buy homes only once you are debt-free, on 15-year fixed mortgage, and so the payment doesn’t exceed 25% of your take-home pay.  Dave admits it’s a fantastic time to buy a home, but hasn’t switched his priorities.
  7. Build wealth and give! – No reason to change the ultimate goal of it all!

Dave Ramsey is a no-bs sort of individual. For example, he does not endorse Primerica and has stated on his Twitter that their insurance is expensive.

At first, I’ll admit I was a little proud.  “My financial guru is better than your financial guru!” But as I thought about it more, I wondered what was truly a more desirable trait.

Is it more desirable to follow a system that:

  • Sticks to its “guns” and doesn’t change with shifts in economic stability, or
  • Is open and willing to take in new information and adapt to external circumstances?

“Solid Principals” or “Ability To Adapt”…  which is more beneficial.  This has become a really difficult question for me to answer for myself.  Of course, a balance of the two is most likely the real answer.  Maybe Suze is onto something.  It’s not like she’s flip-flopped her entire message.  She’s just changed one part of it in response to an economic downturn.

For me, it all comes down to integrity and intent.  I’ve watched, read, and listened to enough of Dave’s content that I firmly believe his top priority is changing people’s lives for the better.  Unfortunately, I can’t say the same for Suze.  In fairness, I’m not nearly as familiar with her content.  The big question that I keep asking myself is:

Why has Suze Orman changed her advice?:

  • Has she truly been exposed to new and credible feedback/information and has realized a different approach would provide a greater benefit for her audience? (certainly possible)
  • Or has she simply bought into regurgitating a hyped-up state of fear.  Is she leveraging this new change in order to create buzz, garner attention, and ultimately sell more of her heavily-sponsored products?  (certainly possible)

Once again, I honestly don’t know. I am dismayed by this sort of reasoning though. But this isn’t just about Suze or Dave.

It’s about your own set of financial principles and beliefs. Hardly anyone follows a specific guru or system 100% of the time in all situations.  We each build our own financial habits and principles based on what we feel is convenient, smart, and reasonable.

Ultimately, most of us realize a nice foundation of time-tested principles is essential to long-term success.  However, this doesn’t mean we have to ignore a new set of circumstances when they are presented.

The ultimate answer may lie in doing our best to process and form opinions on new information, while still double-checking any changes we may want to make against the principles of our core beliefs.


Do you prefer and approach like Dave Ramsey or Suze Orman?  Let everyone know below!

403 thoughts on “Dave Ramsey Vs. Suze Orman: Should Your Financial Guru Be Changing His/Her Advice?”

  1. I don’t think much of either, Orman or Ramsey. The $ is getting weaker because the Fed Res just keeps printing money. As the $ gets weaker, gold increases in value. Why not buy gold? Total debt is over $50T (Fed, state, muni, personal). There is less than $10T from all sources to pay that debt. Where does the money come from to pay the debt? Answer:
    Either increase taxes (would have to be 100%), or keep printing money. If we keep printing money, that money will buy even less. The products have not increased in value; the money has decreased in value. The only other way to fix the debt problem is for the country to go in default.

  2. @John K
    Who says we have to fix the debt problem? Yes, I understand the basic math of it all and that we’re headed toward not being able to service the debt, but my point is that our system was built on using the debt tool, and I doubt very seriously we’ll get away from that any time soon. So we’re probably going to live with solutions for the status quo rather than a major overhaul.
    I understand what you’re saying, but this is sort of the same argument for peak oil production. The sky would fall if we fall off the slippery slope, but suddenly the US is in a major position to shore up the world supply.
    I could be totally wrong and you could be completely right, but I don’t believe we’re headed for a cliff.
    Therefore, my take is that no matter who’s money philosphy, there is no substitute for getting out of PERSONAL debt. The national debt scheme is a different animal. They can print money but I can’t. A person can choose to invest in gold, good or bad, but you can’t buy a loaf of bread with gold.

  3. I will have to agree with Mr. Ramsey. I listen to both and I find it harder to adjust to Ormen’s advise then it is to adjust to Dave’s. So I am sticking to dave’s opinion and plan. I am nowhere near getting out of dept, but I am sticking to FPU to the best of my ability.

  4. Dave Ramsey rules! Suze Orman was recently in a commercial promoting leasing a car. She is a sell out. She rather endorse products then offer legitimate financial advice. Dave has never endorsed a product that didn’t follow his principles. That may not be easy but his integrity definitely wins out. Also Dave has stuck to his principles because he is right. That is the beauty of his advice it was right in the 80’s, 90’s and the 21st century and it will be dead on 100 years from now. The fact is it is common sense. Suze Orman is probably working on a deal selling credit cards, she has no integrity – why would anyone listen to her?

  5. Dave Ramsey doesn’t believe in FICO because he does not believe in borrowing money for any reason expect a 15 year mortgage. With credit cards, no car loans, no debt! your FICO score is not getting you anything!

  6. I learned about both of them on the documentary Maxed Out (http://www.imdb.com/title/tt0762117/). That video inspired me to strive for debtlessness. (Cue Handel music, LOL). I’m down to a whole life policy loan and my mortgage–yes, I’m working on both, as well as trying to amass a significant savings cushon. I pay the balance on my one credit card bi-weekly (when I’m paid). The rewards points (I put as many expenses as I can on that card) will go to a cruise, within the next few years;).

    My approch was the most similar to the debt tsunami described on this site. I paid on the biggest PITA first and was pumped when it became an unpleasant memory.

    I lean more towards DR than SO. While I agree his starter emergency fund is kind of low, it is truly a baby step in the right direction. I catch clips of his show now and then. I like the tools on his website. Principles are timeless.

    Suze lost me when she once hawked a pre-paid debt card, which had a fee to look at it (no, I’m not exaggerating much); not to mention the blatently fraudulent claim that the debit card would boost a credit score. Also if this article (http://www.amodernquest.com/suzeorman.html) is to be believed, Suze is a glorified editor, rather than an actual researcher or expert. That being said, I watch her show almost entirely for the entertainment value. I have to wonder about the priorities of some of the callers for her Can I Afford It segment.

    As for credit scores in general, if you were to read what goes into an actual FICO score (http://www.myfico.com/CreditEducation/articles/); you could be forgiven for wondering if you were reading a chapter of Catch-22. DR may be onto something when he recommends taking steps to make it a moot point.

    I like Gail Vaz-Oxlade’s CNBC (at least in the US) shows ’til Debt do us part and Prince$$. Those shows contain more individualized plans and challenges to get solvent. SoapNet’s defunct Bank of Mom and Dad with the finance expert (the name I can’t recall, Mid-East sounding) was another good example of this.

  7. I listen to Dave Ramsey on the radio. I watch Suze on her weekly program. They both have a lot of good points. I like the bluntness of both of them. They try to wake people up to the economic reality they are living in. Dave’s program is biblically based which I like. The biggest thing is the Financial Peace University programs held all over the nation to help people get debt free. I like Suze’s “Can I Afford It ?” segment. I like Clark Howard too even though you didn’t mention him. I am not following any particular plan right now, just trying to pay bills and get by.

  8. I listen to both Dave and Suzeand get something from both. I have not heard either discuss the advice for the elderly as what to do with money, (cash). Any advice?

    1. There isn’t a single financial guru who will provide advice to the “elderly” regarding what to do with their money. They all like to concentrate on 20 and 30 year olds. It’s a very safe age group to advise: make sure you save up to the match amount on your 401K, open a Roth, save as much as you can because you have time on your side, etc. etc. Anyone can give that advice and look like a genius. For those who are “elderly” (and what does that mean anyway? over 55? over 60? over 65?), you’ve missed the boat. There are no rabbits to pull out of the hat. Most in that age bracket never had the opportunity to pay into a Roth, and unless you worked for the government, there’s no pension to look forward to. I don’t think Chad (above) necessarily meant people who are ready to keel over when he asked about advice for the elderly. I think he meant people who are nearing or at retirement age and who are very concerned about their finances. This is an area that is never discussed on Orman’s show. I went cold on her years ago when she was saying people should take their Social Security as soon as possible (early) because there was no guarantee it was going to be around. Now she says wait till you’re 70. Bah. Her show is infotainment.

      1. wrong, Suze mentions on her shows that you need to save money for retirement. You need a 401 k for everyday expenses, while you should also have a Roth IRA for emergencies. When you are old & retired it’s called ” being on a budget.” What else
        Would you do with your money at that age? People who say Suze doesn’t address it
        Don’t listen to her show on a regular basis.

        1. Lisa, I don’t think you read my email at all. Of course Suze says save money for retirement, fund a 401K and a Roth, blah blah blah. That’s all fine and good if you’re young and have a long career path ahead. But if you’re older, you probably didn’t even have access to a 401K till near the end of your working life, and you can’t fund a 401K or Roth 401K unless you’re working. No employer I ever worked for offered a 401K till 2003. As for your comment about “when you’re old and retired it’s called being on a budget,” all I can say is how arrogant of you. Do you realize how most retired people struggle with inflation and taxes? I’ll repeat what I said: no financial gurus seem to want to tackle the idea of advice to the “elderly” about what to do with their money. That’s ’cause there’s nothing they CAN do.

  9. You can’t take it with you. Give it away. Depending on your tax situation and amounts, you can consider giving it to qualified charities to offset taxes. Otherwise, why not leave cash for the next generations?

    1. Steve, how about using your money to live off of? None of us knows how much time we have or if we are going to outlive our money.

  10. Dave Ramsey rules. His steps are not about being rigid, refusing to change. To me it’s just common sense, more so steps 1-3. Heck anyone can change them to suit their circumstances. My wife and I did after step 3. We own rental properties in a different country (where we are from originally & intend to settle later) because real estate is booming there.

  11. I am debt free now for 7 yrs. now. I am 49 yrs. old and I have my house paid off 5 yrs now no car payments no credit card debt and i use a debt card only.I have a emergency fund built up of about 5,000 dollars a 401 k plan of about 15,000 dollars and Ira ‘s a roth and a traditional combined about 30,000 dollars. I have to 2 jobs combined salary about 41,000 a year. I am single no kids. What changes do you suggest I make if any.Give me your take ? Thanks

    1. Baby Step 1 done
      Baby Step 2 done
      Baby Step 3 done
      Baby Step 4 done
      Baby Step 5 done
      Baby Step 6 done
      Baby Step 7 Build wealth and give!
      That is where you are at. Congratulations and welcome to the club. What I am doing is trying to max out my Roth IRA, 401K and keep the significant other happy. Recommend spending a little bit of money. I know if is hard but do something you have always wanted to do. I am having that challenge right now. We are in a better position than most people. We can pay cash for what we want or need.

      Good Luck and Enjoy!!

    2. Mark – It sounds like you have a a LOT going for you financially. I salute you for having a second job. You didn’t mention if you have a defined benefit plan (trad. pension) at your full time job, but even if you do, I would suggest you focus on the retirement plans. You’re 49, retirement will be here before you know it. If you can’t contribute any more, have you looked at what you are investing in? Are they LOW cost mutual funds? I prefer Vanguard index funds. A LOT of people will charge you more promising to beat the market, but statistically, they can’t do it. Do you really want to pay someone more to “gamble” your money on beating the market? How are you doing with asset allocation? Do you understand asset allocation along with your risk tolerance? If you want good advice to help you, I suggest you look up these people (on the Internet, the library, or both): John Bogle, Paul Merriman, Tom Cock/Don McDonald, Rick Ferri, Larry Swedroe, Allen Roth, Dan Solin & Mark Hebner. They give sound investment advice using low cost funds. These people have many internet columns, websites, podcasts and books to help you. Good Luck, sir.

      Assnap Kined

  12. I don’t believe it is a fair to ask which is more beneficial between Dave Ramsey’s “Solid Principals” to Suze Orman’s “Ability To Adapt”. His principles do not need to be adapted. If they do I have yet to hear anything he suggested that was taught in a better way somewhere else. The ONLY thing I can think of is where his Debt Snowball is not as efficient as Suze’s idea of paying off the highest % rate first…which of course is more logical. If you could do one as easily as the other, then Suze’s will put you ahead in saving money. However, Dave admits that this is not the best way if you are able to do it but that the Debt Snowball is a motivating tool. I know it worked for me because paying off the debt with the largest % rate would have been tougher psychologically for me to handle. I do not follow everything Dave says because I still have credit cards (for my convenience), but I make payments to them twice a month and do not spend any money unless I know I already have it. I am down to owing only on my house and about 10k left on my car with my 1k emergency fund and 5 months of cash in the bank. I am thankful from what I have learned from both of Suze and Dave.

    1. Keith, you shouldn’t have 5 months cash in the bank if you still owe on your car. Put that money towards payoff on your car. Just a bit of advice from an outsider looking in…

      1. Saves snowball is faulty. You pay the highest card or debt off first & get rid if it. Then lower debts after. Dave says his way just gives you ” psychological gratification ” to motivate you. You don’t need a head game to motivate you. You need to pay highest debts first. That should be motivation enough for anybody. Common sense.
        Secondly, everybody knows you can’t bleed your bank account dry. Use some money to
        Get ahead on that bill. You need extra for an emergency & 1000 dollars won’t be enough.

        1. The psychological gratification is good for those of us that need it. however paying off the lowest debt is good just to get rid of it. so many people out there have small collections or medical or store cards(which tend to have the highest interest rates) that need to go away and it is that quick fix that most humans need and the peace of mind that those are gone. the car bill or the student loans take longer and usually have a low enough interest rate that it doesn’t hurt to knock them out after the little crap is gone. Also, in the beginning of any plan you tend to not have as much “extra” money, at least not until you get a sense of budget and get some of the bills knocked out. I have two “emergency funds” one is a car account for tires or bigger repairs since I own older vehicles and the other is the $1k for the oh crap account and granted if the air conditioner needs replaces that wont cover it. However if you know its old and could go out, the whole Dave thing is plan for it and it wont be an emergency. that is cash flowing the funding of that big ticket problem you know is going to happen. that’s what I get out of listing and reading his plan.

  13. Like some of the others have said, I take some advice from both Dave and Suze. I tend to side more with Dave, but there are things I disagree with him on. Suze’s advice is to have 8 months in case you get laid off, but Dave does advise people to increase their emergency fund(and stop debt repayment) if they feel that there could be a need for money(layoff, baby, medical expenses) in the near future.

    Dave Ramsey: I think he is more realistic about how people work with money. They need to learn the difference between wants and needs. My main point of disagreement with Dave is on student debt, if its managed properly,

    Suze Orman: I will admit Suze’s advice seems to be scattered and seems to change all the time based off what I see on her show. I don’t care about FICO as much as she does because when you have cash, even a low FICO doesn’t matter as much. I don’t like the emphasis on FICO because if you add up all the INTEREST payments you send the these banks, you’ll realize how much money you are wasting every month to have a high FICO score.

    At one point, I was paying $1500/month JUST IN LOAN INTEREST PAYMENTS. That is when I realized why I have a small house in a rural area, and the banks have huge buildings downtown areas. I have a plastic, foldout table in a small carpeted room to work from. They have huge offices, when marble floors and giant mahogany desks.

    1. FYI – You may not care about your FICO, but potential employers (and others) may!!!! Some of the main components of the FICO score are paying your bills on time, the amount of credit you have available and what percentage of that available credit you are using. You can have (for example) 3 no annual fee credit cards with $10k limits and you simply charge a couple of things a years (to keep the accounts open) and pay everything off within the grace period. If everything else in your credit file is clean, you will have a nice FICO score and it’s not costing you a penny in interest.

      Assnap Kined

    2. Yes & banks also have huge overhead costs & lease payments too. Always remember they are in business to make money. Yes FICO scores affect everything you do. Renting, employment, insurance rates, ect. All are affected by your score because in
      Affect it is your financial iD. It shows everybody how financially responsible you are.
      Even if you were to pay cash for a house, they would still look up your FICO score.

      1. Actually when paying cash for a car or a home there is NO need for a FICO score. FICO scores are for those who live their lives as slaves to the lender. Even if you purchased a home with ALL cash and had a 0 FICO score you can buy. It just requires more effort on the underwriter to approve the purchase. To verify the funds are legit. To many individuals lead their lives based on a FICO score. As Dave would say CASH IS KING!!!

  14. I remember Suze saying “don’t sell, hold on to your investments” in 2000ish. Everything tanked. I re-read a book and astonishingly, she wrote to roll in your credit card debt into your home mortgage when refinancing. I couldn’t believe it!

    I do listen to and read both Suze and Dave, but my husband and I have found a middle ground. We have no debt, and are getting our kids through college debt free.

    I just saw the Queen of Versailles, and the show reiterated the financial “house of cards” that can collapse. When you own something, the government has a harder time taking it away,

    1. Suze MAY be OK for basic debt management/personal finance advice, but she has a very dubious history when it comes to investing advice. At one point, she was talking about investing in commodities to her followers. Many professionals consider dabbling in commodities speculation, not investing. A while back she formed a relationship with the Money Navigator, a market-timing newsletter. Later, she parted ways after The Wall Street Journal questioned some of the newsletter’s performance claims. This from a woman only keeps a very small portion of her own sizable wealth invested in equity markets. When Suze starts talking about investing, put the book down or turn off the TV/radio. Your portfolio will thank you!!

      Assnap Kined

    2. I think the government can take away your land even if you own it. It isn’t that hard for them. Look at what they do to land owners out west.

  15. Andy Richter

    Dave Ramsey has never changed his plan. The economy has changed drastically. Dave’s plan still succeeds in getting people out of debt. Therefore, it works.

  16. I enjoy Ramsey’s no nonsense stick to the “guns” advice that is never changing.
    I’m at baby step 2 with 10k of debt left. I will start baby step 3 this November after snow balling my debts. I have never stuck to my guns on a budget. Ramsey’s never changing advice is giving me confidence in his confidence of advice and strategies.

  17. Orman is a joke. I really can’t believe people listen or watch her show. If someone can’t pay off a credit card are they really going to save 8 months of living expenses. They couldn’t same 8 hours of living expenses. My favorite call in was a lady wanting to spend her life savings ($28,000) to take her body to see the monkeys in Africa. A real nice safari. Orman suggested she have a family reunion. A little racy but funny as heck.

  18. It’s bad advice to suggest you only have $1000 in our emergency fund. That isn’t even 1 month’s worth of expenses for most people. If you lost your job in this economy, you will be hard pressed to find ANY job in one month. I was unemployed for 4 YEARS before finding work that pays a third of what I was earning pre-recession. I’m not a huge fan of Orman but I think she’s got it right on this one.

    1. AlyR: did you see Dave’s baby step #3? This is where you accumulate more than $1,000 in an emergency fund. $1,000, is only the beginning.

    2. AlyR, the idea behind only having 1000 dollars in an Efund is only for a short period of time. 1000 dollars in the bank is only baby step 1 which is designed to catch life’s little things. It is there in order to have a little “Murphy repellent”. It is there to get people to stop using credit cards and to cut them up. If you cut up all your credit cards without 1000 dollars in the bank, you will go outside and find that your tire is flat or your roof will start leaking. Something will happen if you do not have this cushion. This is only until you get our of debt which is baby step 2. Get out of debt of everything but your house. Once you complete baby 2 you will then go back to the Efund on baby step 3 and complete it with 3-6 months worth of expenses.

      One thing that I have noticed in today’s ages is that 1000 dollars may not be enough for some people to complete baby step 1. I would say somewhere between 1000 and 2000 whichever make you feel comfortable. Remember this is only for a short period of time while you are getting out of debt. The idea is to stop paying all the interest on the debt which is why Dave does not want you to complete your eFund until baby step 3. It also allows people to have some quick wins with their finances also. Dave explains much like going on a diet. If you go on a diet and gain weight the first week, most likely people will stop the diet because it does not seem to be working. He wants you to have a some quick wins to boost your confidence in winning with money.

      If you have any questions please feel free to contact me.

    3. AlyR, please note that I do not work for Dave Ramsey in anyway or get paid by his company in anyway. I am simply a person who as followed his plans and have won.

    4. Yes, I prefer Suze Ormans straight forward advice also. She has helped many people get out of debt & even improve their relationships in the process. I don’t care for Dave Ramsey. For one thing he tells people you need 6 months worth of emergency funds. Suze tells you to at least have 8 months worth of funds. Dave Ramsey tells you to pay cash for everything & that ” credit scores are an illusion”. Suze tells you everything you
      Do financially is affected by your credit score. Many other people who only used cash &
      Never had credit cards will tell you they found they were at a disadvantage many times
      Because the basically have no credit score for companies to look at when approving them for purchases.

      1. Lisa, if someone is actually following Dave Ramsey’s plan they aren’t purchasing anything on credit. The only exception is a home mortgage and that would be after they are debt free with a fully funded emergency fund and 20% down. I’ve bought several homes and I feel pretty confident that anyone in this position will be able to find a reasonable mortgage. I’m not sure who you were talking to, but if they are financing cars, boats, etc. they are NOT following Dave Ramsey’s plan

  19. First read about ” Suzy’s” method in a book by Carol Keeffe “How to Get What You Want in Life with the Money You Already Have (Simple Yet Revolutionary Ideas for Reaching Your Dreams While Still Paying the Bills (1995). A main component is “pay yourself first”. It’s a very good idea.

    What makes you want to keep away from the $ you saved and not spend it, as you did with credit cards, is that you are seeing your cash grow and you are getting thngs and going places at the same time. It’s a great feeling and kind of a high to have real money in the bank. It’s amazing how quickly it builds. If anyone is interested I would get Keeffe book ,it’s a good read, you really can see how it might be the answer for many a credit card addict..

  20. Suze lost me when she started promoting car leases too. Dave’s advice works much better for me.

    That said, Dave advocates a 15 year fixed mortgage. That doesn’t work for us, so we have a 30 year fixed ($2,112/mo.) A 15 year fixed mortgage would be $3,190. It’s difficult for us to pay on a 15 year mortgage out of our monthly cash flow, but when my husband receives a quarterly commission check, we make a principal reduction of $3,234. That way, we can get the mortgage paid off in 15 years, but without the stress of doing it monthly. Our way of paying the mortgage is a bit convoluted, but the end result is the same.

    My husband also uses a credit card to travel for work. Though the company reimburses him, we do keep several thousand dollars in the bank to pay the bill in case him employer goes belly-up (it wouldn’t be the first time). We just prefer not to use our money to front his travel expenses, but we’re prepared in the event that something goes awry.

    We also continued to contribute to the 401K while we were getting out of debt. We’re over 40 and we couldn’t really afford to put retirement savings off until we became debt-free. It took us three years to pay off all our debt.

    -We paid off $1.5MM in debt, and with the exception of a $2K credit card my husband uses for work, we’re debt-free
    -We have a fully funded emergency account
    -We’re maxing out our retirement
    -We’re planning to cash flow our kids’ university education
    -We’re on track to have the house paid off in seven years

    Dave’s principles are solid, but a little tweaking here and there to make them best suit your individual circumstances isn’t a bad thing. In fact, DR has advised callers with almost the same situations as ours, to do things similar to the way we’ve been doing them. We’ve been able to accomplish all of the above since we started listening to him in 2010.

    1. How did you pay off $1.5 million in debt if you have trouble paying an extra $1100 in mortgage payment? That seems very unlikely to me.

      1. @ Ryan- I know, it does seem a bit counterintuitive. We went gazelle intense in paying off our debt. We sold a car, a house, used a <$100K tax refund, and used several big bonuses to pay off the $1.5MM debt. All of those sources of cash were non-recurring, and my husband's annual income has since dropped by <$100K.

        My husband's current base monthly income isn't high enough to debt service a 15 year mortgage, and give us enough wiggle room to live comfortably (food, utilities, insurance, spending money…we have no consumer debt).

        Every quarter when he receives commission, we make a principal reduction to the mortgage (to keep us on the 15 year amortization track), pump up the kids' (12 and 14) university fund, and we set aside the balance for quarterly expenses. I know, it's kind of convoluted, but at the end of the day, it works for us.

    2. NO! Suze has never promoted leasing a car! Suze has always said

      1. never lease a car,
      2. never finance a car for longer than three years
      3. buy a used car, and keep it until it’s worn to the ground (or at least 10-15 years)

      I don’t agree with a lot of things she says, but at least I don’t but words in her mouth.

    3. Suze doesn’t approve of leasing a car, unless you are the type to change cars every 3 years. In general she doesn’t like people leasing a car & says you should buy a good second hand car & keep it for 5 to 10 years if you can. You apparently haven’t been listening to her lately or on Facebook either.

  21. Pingback: Why Emergency Savings Aren't Always Enough - Forbes

  22. I’d heard about Dave Ramsey, so at the beginning of this year (2013) I bought one of his audiobooks and took a listen. I could not make it to the end of the book. It was utterly APPALLING and insulting:

    1.Ramsey listens/’prays’ for guidance from the voices in his head which he ‘believes’/attributes to a supernatural deity. And he keeps repeating it, over and over again. I’m not American and I don’t want religion shoved down my neck – especially in a book on finance by someone presenting themselves as an ‘expert’. In my country, sprinkling religious beliefs into your ‘expert’ advice is a sure-fire way to be dismissed as a crackpot and NEVER to be taken seriously. Which is exactly what I’ve done with Ramsay’s ‘advice’.

    2. Much of his advice holds no water outside of the US- i.e. superannuation (Google it), or long term investment advice varies greatly between countries.

    There are much better people around than either of these ‘gurus’ – MJ De Marco and dare I say – Adam who runs this blog. I’ll take their advice over these twits any day.

    1. I want to chime in and agree on the US comment – i follow Suze and have read (but was turned off by the religious stuff) Dave Ramsey. It’s very US centric this advice and while there’s always bits i can use the actual ‘how’ is completely useless unfortunately.

    2. I didn’t realize the world outside the USA was all atheist. Oh wait, it isn’t. But it has a number of people like you who are aggressive atheists. Those of us with reason expect people to have different beliefs. I’m confident in my beliefs– religious or not– and because of this I don’t respond so belligerently to those with whom I disagree. Your country must be a miserable one in which to live, if there are many like you.

      By the way, asking a financial expert to be fluent in the laws and customs of all the countries of the world is ridiculous. Europeans are particularly afflicted with this strange psychosis, in which they take offense that an expert might dare take to the internet with information appropriate for a country of 314 million, yet not be familiar with the economics of their country of 31 million.

      1. Steve E
        Not only Europeans but all people are particularly afflicted and take offence of the fact that American religious nuts think is ok to disrespect other peoples beliefs and try to proselytize their own American capitalist christianity. I am sure you prefer the word outreach and not proselytizing.
        It is offensive to pay money attend 9 classes of what you think is a seminar in finance and instead be bombarded with your religious crap.
        I thought I was going to a financial seminar that I paid for and should not have to endure a sales pitch on religion from the gate keepers of the venue where the seminars are held.
        What I find amazing is that religious nuts like you worship Jesus, a communist Jew.
        I was born a christian and I am a christian by default and the American’s notion that Jesus died for your sins was never part of the indoctrination.
        Jesus died because he went after the money changers (today’s banksters), so they killed him.

  23. @AJ – Don’t let your disdain (hatred, actually) of religion triumph over common sense. What better advise is there but to live debt free? Yes, of course, because of the European experience with state religion being shoved down your throat, and therefore anything to do with religion must be bogus, I do understand why you misunderstand Dave’s intentions. Yes, he is a God fearing man, and follows priniciples laid out in the bible. But the principles thereof should be looked upon with an eye toward literary historicity. Age old advice.

    Your superannuation advice should be relative to your own economic circumstances, not for what’s happening in the U.S. Dave’s audience is in the majority U.S. – based. Take what applies to you or is adaptable for you, and leave the rest. But surely living debt free is a good global principle.

    1. Europeans are bothered by the fact that so many people in the USA voluntarily choose to have belief without it being delivered at the point of a sword. They’re certain that this foolishness should have been rendered obsolete by the rise of science and reason.

  24. Dave even admits that you’d be a fool to follow what he says blindly. But a lot of his followers are lacking in common sense, so they need a basic system they can follow. Keeping things basic is good, but if you want to win you need to think on your own and see what fits your exact situation and adjust.

  25. Pingback: Layoffs, Emergency Funds and Cars

  26. I find Dave Ramsey’s approach is sound and foundational. do I think Him not changing anything over time makes Him rigid or unable to change when the strategy needs to, No, i think it is wise to stick with what you know, your convictions or knowledge until you see a need to change. Dave’s approach is sound, it has merit, and until HE sees a need to add, take away from or change anything He is doing right by not wavering on his strategy. If it works, why fix it?

    His timeless strategy works in many types of financial situations, whether our country is in economic upheaval or if we are the most prosperous we have ever been. It is full of common sense and He seems to truly care about the people who he is working with, who have attended his workshops and training classes. He isn’t out for the big money for himself, He wants everyone to be able to have that life of peace we all so desire. He is a good man,

    I have looked at both of their financial plans and packages, I can tell you that although I find them both interesting, I have found that over time, depending on the audience she is speaking to, Suze’s ideas, though she has some she hasn’t changed, she can change with the wind for TV viewing audiences, when she is working with another guru I have seen her change her stance to agreement with them, even if it is contrary to something she may have even taught the day before. I think some of her ideas can get out there some times, but I don’t know if it is because she is looking at her own bank account rise or if she really believes in everything she teaches, even if it contradicts with something else she taught…

    1. Please provide specific examples, I have not seen this at all (besides her increasing the emergency fund). Her core principles have remained unchanged. Her philosophy is people first, then money, then things. She attack’s people’s emotional response to money, and emphasizes that many of our relationships with people are often what lead us down the wrong path. She’s a refreshing face in the financial advising world that focuses too much on objective facts. I don’t agree with everything she says, but people connect to her advice because she can attack the problem deep down within the soul of the person she is advising. Ramsey and Orman pretty much agree on 99% of the financial advice, the one who will be most successful will be the one who gets their followers to actually change. I think both of them are good at this, but they have completely different styles that is all. Besides the emergency fund they actually have the same advice for the most part.

  27. How can anyone take Orman seriously? She’s a huge supporter of a POTUS who is all about spending money we don’t have? Give me a break.

    She’s just salesman pulling money out of people. I wouldn’t trust her in a second. Ramsey is about making money, but he’s also about people bettering their lives. And he practices what he preaches.

    1. George Bush is also all about spending money we don’t have. I go by the rationality of people’s financial advice not their political leanings. You clearly go by the other. You did not mention anything about Orman’s financial advice because you don’t know what it is. Obama has nothing to do with her financial advice, just like supporting bush wouldn’t have anything to do with her advice either.

      1. I’ve seen her show many times. She tells people to go no debt all the time. “Denied.”

        Then she goes out and supports someone who can’t spend enough. Give me a break.

        So are you saying she doesn’t believe in practicing what she preaches? Just another sheep. Think for yourself dude.

  28. If you are in serious debt, and can’t get any loans and have no way to move around money besides an emergency fund, you definitely need more than a $1,000 emergency fund to prevent becoming homeless in a real emergency. Now 8 months is a bit extreme, probably 2-3 months would suffice.

    However, my general advice is to set up a small emergency fund about 1,000 and then build up a “Roth IRA” emergency fund. Roth IRAs are exempt from bankruptcy and you can dip into it without a tax penalty (obviously you don’t want to dip into it – this is only for a true emergency). If no major emergencies occurred you have a great tax free retirement fund! But still once it has reached 2-3 months of expenses attack student loan debt and high interest other dept before building wealth.

  29. 3 months is nothing for an emergency fund. I have seen many friends and family hit road bumps and none of them bounced back to 100% any quicker than 6 months, some closer to a year. I’m talking about 10 people that I can think of in my circle, and if none of them could get back to normal within 3 months that seems like enough evidence for me that I need to put at least a years worth of money away to pay for necessities. One late bill snowballs into bigger things very quickly. I have to agree with Suze, and I like most of what she says. Money is just the symptom of a larger problem. . . I like the connection she makes about our emotional level and our financial standings.

    1. I’ll second that! 3 months is nothing for an emergency fund. After I was laid off from my full-time job 2 years ago (my industry has gone belly up), I have had to rely on contract work. it took me 4.5 months to find a contract job after loosing my full-time job, and that job was only temporary so I’m unemployed again. I’m in my 4th month of being unemployed. Although the contract work paid a lot better than my previous full-time job. My main focus was to save up as much money as I could. Fortunately, I have no debt, although I was practically broke when I was laid off 2 years ago. Now I’m working on some retraining, something I could never have afforded 2 years ago (and yes, the school I’m applying to is approved by the state unemployment office as a Eligible Training Provider).

      1. I agree that emergency funds are important, but everyone needs to take into account their own situation and risk tolerance for deciding how to and how much to build their fund. When I was working through the steps of becoming more financially solvant, I used the “kill as many birds with one stone” approach to everything. For example, I was behind on saving for retirement, so I put as much as possible into my ROTH IRA. I considered my ROTH part of my emergency fund while I was paying down debt. Once the debt was paid off, I started adding money to a savings account outside of my ROTH. I had no major emergencies over this time, so now I have more money in my ROTH for retirement. A win, win.

  30. Hi all. I’m happy to see everyone watching great advice from both. I watch both

    Dave: pro: I love his debt focus. con: he focuses on real estate which are large debt liabilities. Which may bring more headaches in repairs and maintenance. My sister is getting sued by her tenant. Too much trouble. Also. Dave is aweful at actual financial advice. Mutual funds are the past! EFT. Fixed Annuities. Safety and security in retirement should be advised not all risk all the time.

    Suze: pro: much better at advice. Con: not consistent and powerful enough on debt reduction.

  31. The suggestion to take your 5 month emergency fund and pay off your car payment makes no sense to me. So then what happens is you pay off your car and then soon after you lose your job. You haven’t had time to build back up your emergency funds with the savings from the monthly payment for the car. Now you don’t have an emergency fund to live off of and you don’t have income to be approved for a cash out vehicle loan. Yes it’s true that you’re going to make less than your emergency fund money than you’re paying interest on the loan but sometimes safety of being able to pay your monthly bills when something bad happens is well worth it.

  32. folks, they are financial entertainers. Neither one has any accountability as it relates to your own personal situation.

    Dave has some sensible things to say about getting out of debt, but his advice about investing borders on lunacy.

    As noted, Suze’s “advice” changes with the direction of the wind. What’s more, she doesn’t even follow her own advice, but thinks you should.

    Both have what borders on a cult following.

  33. I’ve paid off credit cards each month for years (really decades). I have heard that I’m called a freeloader because I avoid paying interest & fees. But they keep giving me a higher credit limits and, in mailings, urge me to spend more. I can only guess that they like the juicy merchant fee.

    Maybe they do cut your limit or cancel your card if you are bad pay; I can’t tell. The are in business to make a profit and if you cost them too much, maybe they can improve their profit margin by eliminating costly customers.

  34. Great post! I never really considered the comparison of each. However, I have been successful in getting out of debt using Dave’s simple, easy to remember, debt-escape plan. It works. It has worked for thousands upon thousands of people.

    I have read, and enjoyed, Suze’s books. She has great investment advice for investment for women. I didn’t get the seriousness of escaping and remaining out of debt like I got with Dave.

    With that said, Dave is steadfast because it works. Without fail.
    Suze changes, because her advice (investing) is based on the current economy. Which can fail (as we have all seen).

    I choose to go with the one that works.

  35. Just an observation from reading: Suze Orman suggests an 8 month emergency fund. If you read, Suze Orman defines an emergency fund as enough money to cover your expenses. The Dave Ramsey section says $1000 emergency fund and 3-6 months of expenses saved. So, Dave Ramsey (if you apply Suze Orman’s definition of what an emergency fund should be used for), is also approaching the 8-months worth of saved money.

  36. I think that both Dave Ramsey and Suze Orman have their good points and I take what is good from each and leave the bad.
    I have almost 12 months of expenses in an emergency fund….however I am still working on paying off my debt….I’m using the snowball method and plan to only have one more credit card left to pay off before the end of the year. no car payment but I do have a boat payment that I plan to pay off early…..I have a 15 year fixed mortgage that I plan to pay off early as well. Problem is….I’m having so much fun saving and watching my accounts grow that I hate to part with it in order to pay off all my debt immediately. Which I think is probably a good thing and I am OK with it, because I’m no longer using my credit cards unless an emergency.
    I also am growing my IRA while I’m paying off my debt and saving at the same time. I don’t agree with Dave to stay away from individual stocks. He assumes that we are all too much of idiots to figure out what stocks to buy, when to buy them and when to sell them and how to balance our own portfolios.
    Also you have to have a good FICO score in this world it just makes common sense. I don’t agree with closing credit accounts.

  37. Suze O. came to wealth because she was GIVEN money by a stranger and then hired without having to compete against anyone else. As far as I’ve heard her story go is she worked as a waitress at some diner and some rich old fart came in, grabbed her by her arm and offered her all these opportunities.
    She “won the lottery” because she was a girl. This would not have happened would she have been a dude.

    Now she gives financial advice about debt when she has NO experience whatsoever about how to actually get out of poverty on your own, without help from some old rich guy who probably wanted sexual favors but she won’t talk about that part …

  38. So many replies…so many opinions. Many feel doing all at once is the right way. Fund retirement, pay off debt, etc.

    Dave’s Baby steps if followed as designed will allow the individual to establish wealth.

    Given a choice would you rather invest $500 per month for 20 straight years and during this time continue paying off debt, cars, house, etc. OR invest $5,000 per month for 10 straight years knowing your debts are paid off, you have no car payments, your house is paid off, etc????? What solution wins in the end???

    For this example we will start with an existing balance of $0 in the investment account and the annual rate of return is 10% using After Tax Contribution.

    Option 1:
    Start Date 01/01/2016
    Maturity Date: 01/01/2036
    $500 p/month for 20 years.
    $ 343,649.99 – 20 Year Value ($223,649.99 interest + $120,000 contributions)

    Option 2:
    Start Date: 01/01/2026
    Maturity Date: 01/01/2036
    $956,245.48 – 10 Year Value ($356,245.48 interest + $600,000 contributions)

    This should be enough reason right there why to follow ALL baby steps and rid yourself off ALL debt.

    Good luck to all.

  39. Suze has no original thought of her own. She tends to follow the crowd. Prior to the economic downturn she gave one kind of advice. After the downturn she did a complete about face and changed her tactics. Smart choice to make some changes? No, the way I see it is what she was doing before didn’t work so she decided to try something new. Most people would have tossed her out in the cold had she continued in her old ways.

    The fact is investing smartly hasn’t changed for decades. For her to flip flop like this only shows she doesn’t know what she is doing.

  40. Ramsey sounds a bit more conservative, fiscally. Orman is more a ‘guru’, so to be viewed with a more critical eye. If someone changes their previous advice, he/she should be explaining very clearly exactly what made them change, and so demonstrate how everyone can learn from mistakes, even the experts. Investment gurus are the most dangerous; with hindsight, someone will always appear smarter, but we forget how many were totally wrong. Get Rich schemes relied heavily on the exact mortgage frauds shown in “The Big Short”, and the only rich ones not in jail were the cons selling the lectures, videos, etc.
    Work, save, avoid/minimize debt, invest for your future, not to speculate; never gamble with your savings and retirement funds, never leverage them to buy into risky “big payoff” deals. Early payments to buy down home loans may be the best, safest place to invest – even if slightly under water, you still will own the house, and long term it is more likely to go back up eventually unless you bought with really inflated value or bad terms. Defaulting is second after bankruptcy to destroy credit ratings; nonsense worrying over too little card debt and FICO. Two simple rules to financial security: Live within your means, and neither a lender nor a borrower be.

  41. Dave is excellent. Suze is ok, but is kinda wonky. Dave gives old school, common sense advice, that most people can actually use and benefit from. Suze does seem to kinda bounce around with her ideas more. I like Dave’s bare bones, simple, just do it, style. Yes paying down your highest interest loans first does make better math sense, but there’s something about the small to large snowball that just clicks with people. I’ve done it. It’s awesome to pay one off, feeling a little bit more free, having extra money suddenly, then rolling it into the next higher loan. I just started step 6 after paying off my car a few days ago. My emergency fund money market, has about 8 months worth in it. I contribute close to 20% to retirement accounts. Don’t have, and won’t have kids, so step 5 is unnecessary. Should have the house paid for in a year/year and a half. 40 years old.

  42. Dave doesn’t stick to his guns. He is in this for the money. “Don’t ever use credit cards!! Cut them up!!” Really? Yet he’ll let people use credit cards to purchase all of his products at his website? That tells the story right there. He sells the idea of not ever using credit cards, and he believes in this principle so much, he’ll even let you buy it from him with a credit card!! Haha! Nice, Dave.

  43. I like Dave because he takes any confusion out that might be there. Everything is laid out and for folks who are terrible with money (like myself) making it this cut and dry is a huge help!

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