My Disagreement with Dave Ramsey – Part 3

In case you haven’t noticed, I have a bit of a disagreement with Dave Ramsey.  You can read Part 1 and Part 2, if you so choose, or you can pick up with the steps I’m addressing today!

Baby Step 5

College funding for children

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start now. Learn more

My Disagreement with Dave Ramsey Part 3 Baby Steps

Novel idea, really, but I won’t be paying for my child’s education.  I have been working so hard to correct for my financial mistakes, so you really think that I would blindly give my child enough money for a college education?  While college has it’s perks, it has become a substitute for hard work and smarts.  Parents wanting their children to get ahead enroll those who have no business being there, and very few are actually prepared for college, much less the workforce.  If my daughter chooses to go to college, I am perfectly willing to help her prepare and let her live at home while in college, but I will NOT be paying for her college.

What I will do I teach my daughter from day 1 how to handle her finances.  From her first birthday money, she will learn to pay herself first, always give to God, and splurge a little when the situation calls for it.  With some hard work, my daughter will pay for her own college and graduate debt-free.

Baby Step 6

Pay off home early

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Good plan!  This is where it gets fun!  However, this may not be your path.  Maybe you have no desire to rent out your current house, or are close to retirement and paying off the mortgage is right for you.  We will be 26 when we reach this stage so we have a slightly different plan.  We bought our house for a bargain ($40,000 for a house that just appraised out at $125,000 and will rent for $1,500 per month…oh yeah!) and intend to rent it out in 3-5 years (whenever we get out of all other debt and can afford to buy another :-).  Thus, I consider our mortgage a business expense and am not really concerned with paying it off.  Plus, our interest rate is 3.75%, and I can certainly beat that investing the extra money I would pay towards the mortgage!

Baby Step 7

Build wealth and give!

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It’s really the only way to live! Learn more

100% agree and I love that the Baby Steps end with this!  One of the best things the Big Guy and I have done has been donate to charitable causes.  For us, this includes our church, the church camp that we met at and a couple of other causes close to our heart.  This is the fun part!  For us, this involves developing 3-4 rental properties, blogging income, and possibly a yard business as passive income streams.  At this point, life is about putting your money to work for you in the most efficient manner possible.  Too often, personal finance blogs place the emphasis entirely on building wealth, rather than what good you can do with the wealth you’ve built or the time you now have free because of your wealth.

What do you think of Dave Ramsey’s Baby Steps?  Have they worked for you?  What step are you in?



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  1. Living in the UK, university education is not as expensive as elsewhere around the world. However, it is still an expense. But I have no intention of saving money to enable my children to go to university or to assist them on getting on the property ladder (v. common in the UK). My parents couldn’t afford to assist me when I went to university or law school & they certainly can’t afford to give me a deposit for a property. They made it clear that if I wanted to go to university or law school then I would have to pay myself.

    Yes, I got into a load of debt but that was my fault. I could have easily have gone to uni and law school and not got into as much debt as I did. I’ll teach my children about money managment, not just give them a free ride through life by chucking my money at them that I have saved!

  2. I agree that we shouldn’t just give our kids a college education. It’s more valuable if they have to work for it and earn it themselves. Love that he includes giving!

  3. I agree with you to a point about college. It is so expensive these days, I don’t think even a very hard-working student could afford to pay their own way, but on the other hand, I’m not convinced that there is all that much value in a college education any more. One of my friends has a Master’s degree, yet she is having such a hard time finding a job, she is applying for work as a bank teller. I’m much more in favor of trade school – easier, faster, cheaper, and you come out with a definite bankable skill. My two older sons did trade school – I’m not sure about the third son yet – he just turned 16 and he hasn’t quite settled on his path.

    As for the charity step, I agree completely. It just seems “right” to me. It seems like the rent we should pay in gratitude for the good life we’ve been given. #SITSSharefest

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  5. I graduated 8 years ago from a decent university. I worked as a waitress about 30 hours a week to support myself while going to college full time (BS in Biological Sciences). I had 18,000 saved of my own money from working jobs before school. My university was very modest compared to almost everywhere (averaged about 4-5k per semester full time tuition only) which 40% was covered by scholarship. I am not bragging, just explaining that it is much harder to graduate without debt than people seem to think. Yes, I did it, and I would probably change it. Although I will not disagree on questioning the value of a college degree, I think people underestimate how hard it is to work and go to school full time. I never took out a single student loan but my grades suffered and I when I did go to look for a job, my only experience was waitressing and bartending. I was unable to take internships or extra activities to bolster my resume. I do not want that for my son. I want him to contribute, and I will pay a portion so that he can make good decisions.

    • It is so hard to graduate debt free! I did the whole waitress and bartending thing to pay for may way, and my grades suffered too…all I can say is it was HARD! I think the bottom line is that you want better for your son but you also want him to have a good work ethic :-)

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  7. I haven’t read the other posts yet… But we are not good poster children for dave :) we took fpu when we were 22 & 21- already debt free. We ended up spending a lot of money (and emergency fund) at seminary and being under/non employed during some of that time. Then we got into debt when expecting our third child. Well, we’ve corrected our steps and are now debt free with a full emergency fund. We put aside 6 percent (plus 3 percent matching) to our 401k even though its less than the 15 per cent. We save a small amount monthly for our children for college- though our goal is roughly 20,000. We will not pay the whole thing, nor give them the money. We homeschool so we plan on a nontraditional approach anyways. Our total savings (non- retirement) is 14 percent of our take home pay. Our giving is 14 per cent of our take home pay. We don’t want to wait until we have “all of our ducks in a row” before giving. And as far as the house goes… We’ve owned and its just not for us. Maybe in the future but we are very happy renting and having less to worry about.

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  9. It would be nice to be able to pay for college for the kids, but I think that teaching kids to work hard, make the grades, earn scholarships and pursue work study options is realistic while having the money to spend on college isn’t in this economy.

    Thank you for stopping by the Thoughtful Spot Weekly Blog Hop this week. We hope to see you drop by our neck of the woods next week!

  10. People learn at a very young age only what they are taught, and if they’re taught that they don’t have to work hard to get themselves into college, whether it be financially or otherwise, then they need to learn the repercussions….that being that they don’t go to college. Simple.

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