title: Conflicted on Ramsey
contenttype: article
publication: Jeff Kaufman's Writing
published: 2026-03-10T13:00:00+00:00
sourceurl: https://www.jefftk.com/p/conflicted-on-ramsey
word_count: 476
People are often pretty short-sighted, spending money today that
they'll want tomorrow. Debt makes it possible to prioritize your
current self even more highly: you can spend money you haven't even
earned yet. This is a trap many people fall into, and one different
communities have built social defenses against. One of the more surprisingly successful approaches is the Financial
Peace ( Ramsey ) system,
popular in evangelical Christian communities. It has a series of
rules, most prominently the seven
baby steps : Save $1,000 for your starter emergency fund. Pay off all debt (except the house) using the debt snowball. Save 3–6 months of expenses in a fully funded emergency fund. Invest 15% of your household income in retirement. Save for your children's college fund. Pay off your home early. Build wealth and give. There are many more specific rules, however, such
as : As a general rule of thumb, the total value of your vehicles (anything
with a motor in it) should never be more than half of your annual
household income. I have had several conversations over the years with Christian friends
and acquaintances who are big fans of these methods, and each time I'm
thinking both: This seems like a set of rules that, overall, is likely to help
the median American improve their financial situation. The advice is
straightforward and accounts for how people actually behave. Bright
line rules reduce decision fatigue, limit rationalization, and
generally make it harder to fool yourself. A community that strictly
follows this approach likely ends up much stronger financially than
average. The rules are full of bad advice. Some specific bad advice on which the Ramsey approach is uncompromising: If you have $10k of debt at 2% interest and $11k of debt at 10%
interest, you should pay down the $10k first. If you have any non-mortgage debt you should not contribute to
retirement, even if this means passing up on a generous employer
match. If you have debt at very low interest (ex: a mortgage from 2021
at 3%) you should pay it off as fast as you can afford to, even though
extremely safe investments (money market funds, treasury bills) pay
higher rates (~4%). I want to write about how terrible this is, but I can't. It really is
awful advice for a disciplined and informed person who's thoughtful
with their money, but that's not his audience. And it's not most
people. Still, the choice isn't between the Ramsey approach and nothing.
There are other advisers out there who combine consideration of human
irrationalities and failings with a better ratio of good to bad
financial planning advice. The next time I'm in one of these
conversations I'm going to try to hook them on Mr. Money
Mustache or at least the Money Guys . Comment via: facebook , lesswrong , mastodon , bluesky