Who is Dave Ramsey?

by Ryan Guina

Who is Dave Ramsey? He is one of the most popular personal finance gurus in the United States. He is renowned for his Christian background and no nonsense approach to personal finance, especially when it comes to getting out of debt, staying out of debt, and living financially free.

Dave Ramsey’s Radio Show

dave-ramsey-radio-showDave Ramsey hosts a syndicated radio show heard across the US. His style is more about preaching and behavioral adjustment than pure financial information, which is a large part of his appeal. He uses a tough love approach to help people learn how to gain control of their financial situation. You can find out if his show is on your local radio station.

Dave Ramsey’s Total Money Makeover

total-money-makeoverDave Ramsey’s most popular book is The Total Money Makeover, which went on the best-seller lists shortly after its publication in 2003. It’s a popular book, and for good reason – it works! Total Money Makeover has gone through a few revisions and updates since it’s original publication, but the core concepts remain the same. Below are a few concepts you will find Dave Ramsey’s Total Money Makeover:

Dave Ramsey’s Baby Steps. Part of The Total Money Makeover is Dave Ramsey’s Baby Steps, which is a 7 step process to financial freedom. Notice it doesn’t say, “wealth beyond belief.” Dave Ramsey isn’t a get rich quick guru. His teachings are bound by faith and common sense. And the fact that they work. Here is more information about Dave Ramsey’s Baby Steps.

Dave Ramsey’s Debt Snowball. The debt snowball is a strategy Dave Ramsey uses to help people get out of debt more quickly by applying additional money in your budget toward your debts to accelerate payments. The method Dave Ramsey uses is to determine how much money you owe on all your debts, and pay the minimum toward those debts while adding any extra funds toward the smallest debt to eliminate it more quickly. When you retire that debt, you add the amount you were paying on that bill to the next debt on your list, and repeat the process until all your debt is paid off. As you can see, your debt payments “snowball” over time. The theory is that the quick wins will help keep you motivated.

Snowflaking, an extension of the debt snowball. You can also apply the concept of “snowflaking” toward paying off the debt with the highest interest first, toward investing, or many other things. Here is an illustration of the debt snowball.

Gazelle Intensity. Ramsey uses the term “Gazelle Intensity” to describe how you need to attack your debt. He recommends that you live a financial life the way a gazelle saves itself from an attacking cheetah – “outmaneuver the enemy and run for your life.” You can read more about the pros and cons of gazelle intensity in your life.

Dave Ramsey’s Financial Peace University

financial-peace-universityFinancial Peace University is Dave Ramsey’s financial workshop designed to teach participants how to get out of debt, pay off credit cards quickly, save and invest money, understand your credit score, learn about real estate and mortgages, and other financial topics. Financial Peace University is a 13 week process and is often run through local churches and similar organizations. The Financial Peace University program covers many financial topics and uses a workbooks and other activities to help you manage your money.

Should you follow Dave Ramsey?

Dave Ramsey has a loyal and enthusiastic following, and after listening to his show and reading through his books and his website, I understand why some people are huge fans, and why some people prefer to stay away. His tough love act is exactly what some people need, but it can rub some people the wrong way. His methods are also more about behavioral changes rather than always choosing the best financial decision. For example, the debt snowball may not be the best mathematical solution, but the victories give a good psychological advantage against the personal struggle against debt. Sometimes the psychological victories are more important than the actual money saved.

Overall, I think Dave Ramsey is very good at what he does, which is motivate people learn to control their money instead of have their money control them. He is a motivational speaker, and a salesman. But his product is one that works and one that many people need. If you are in debt, I encourage you to tune in to his radio show or borrow one of his books book from your local library.

Published or updated March 1, 2011.
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{ 16 comments… read them below or add one }

1 Pinyo

Very nice summary of Dave Ramsey. I think you pretty much got every aspects covered. Good job Ryan.


2 Bargain babe

Thanks for the summary on Dave Ramsey, I’ve been wondering about him for awhile. He is becoming a household name – at least among the pf community.


3 Kristen

I volunteer with my local Habitat for Humanity’s Family Support Committee. Any family that wants to purchase a Habitat house must first undergo a series of financial classes taught by our committee. The families must work with a mentor and prove that they can live on a budget that includes what their new home payment and utilities would be. We use the Financial Peace University as a teaching tool in this class.

I definitely think that behavior changes are a crucial part of living on a budget and reducing debt. Mental victories are important to success. However, sometimes choosing the best financial solution over the most motivating psychological choice is important too. Sometimes the best course of action is a combination of budget and debt reduction lifestyles and techniques.


4 Ken

I coordinate his FPU program at my church. I can’t find anything out there as comprehensive and understandable as his stuff. I’m a huge fan.


5 Writer's Coin

This is a great intro since he’s become one of those personalities you’re “supposed to know” about. Thanks!


6 Michelle

It’s funny how controversial (and emotionally charged) some of the PF-blog commentary about Dave Ramsey has become. On one PF forum, my posting a simple comment about DR’s take on Social Security started a 10-page flame war with really really nasty comments about him and me for listening to him…so it’s nice to read a balanced post! I personally agree with your perspective. The programs (FPU, TMMO, The show on TV & Radio) are popular because they work for many, many people. He’s got the ‘personal’ side of personal finance down-pat – and his approach does address that aspect first, which I think turns off a lot of folks who think numbers rule the world! Also, even though Dave Ramsey is hard-core about his plan and his philosophy, you can customize his plan to your situation – you won’t fail if you attack larger interest-rate debt first, since overall, you are paying the debt and laying groundwork for a better financial future.


7 Ryan

Michelle, I don’t understand the polarization either. DR and other personal finance gurus aren’t like politicians in he sense that we vote them in and we are then forced to accept the laws and policies they pass. We are free to pick and choose the best of all worlds and find what works for our situation. Which is how it should be.


8 Michelle

Exactly – personal finance is personal and in our case, following a modified-DR approach has disciplined our spending and debt reduction. My family is in a position I truly did not think we’d ever see: within 18 months of paying off all non-mortgage debt. Thanks again for the good post!


9 Ed

Dave is a shill for real estate. For the past 3 years he has been telling people to buy real estate. How’s that working out for those of you that listened to him and bought a house in 2006 or 2007 or 2008? He’s also a shill for stocks. It’s always a good time to buy stocks and real estate according to him. Again, how did that work out for you who took his advice and bought stocks a year or two ago?

He’s right about debt. Getting into debt is stupid. But buying real estate in the middle of the biggest real estate crash ever is just as stupid.


10 Bryce

I disagree with you Ed, if you have the money then why would you not want to invest in Real Estate when it’s low? According to your philosophy it sounds like everybody should invest in real estate when it’s at it’s high point? Dave encourages you to invest in Real Estate with cash. If you do this, you won’t have to worry about horrible markets because you can wait it out till you can sell your real estate for a good profit.

The same holds true for mutual funds. It’s better to buy mutual funds with a good long track record in down markets because it’s on sale. I’m glad i got such a good deal on my mutual funds last year.


11 Tina

My family began DR’s plan in February 2009. We weren’t overwhelmed with debt, but we had the attitude that it was “just how it was”. That there was no way we would ever be out of debt, so we just plugged along making our payments and buying things on credit cards and payment plans. Since starting Dave’s plan we have paid off nearly $10,000 in debt. Our last debt will be paid off this month (November 2009) and I can’t even begin to say how good that feels! We haven’t suffered. Our daughters still do all the things they love. We live on a budget, but we still eat out and go to the movies, just not as often. There are several side benefits that I didn’t anticipate: our marriage is better because we no longer argue about money. We are healthier because we don’t “run through the drive-thru”. Our family talks more and we spend more time together doing simpler things (playing board games, hiking and playing with the dog). The best thing is Dave’s plan is not complicated. It’s common sense and approachable financial advice for average people.


12 Roger

A decent enough summary but to this I would add that Mr. Ramsey has conflicts of interest and gaps in his investment advice which are well summarized by Eric Tyson, author of Investing for Dummies:



13 Rick Shafer

Hey Dave
I respect you for the way you live your life and your opinon on finances.So that said i have a question for you.What do you think about having to pay (SCHOOL and PROPERTY TAXES) on the value of property?Do you think it should be a flat tax just on income?Very frustrated!!!!Hope to hear from you .


14 Credit Card Chaser

95% of what Dave Ramsey says is awesome but there are at least 2 areas where he is dead wrong and I can prove it: http://www.creditcardchaser.com/dave-ramsey-credit-cards-i-love-ya-dave-but-you-are-dead-wrong/


15 Dan

Unfortunately, the rules have changed & following Mr. Ramsey’s advice will lead to a hellish retirement when you health is on the line.

Medicare, something everybody in retirement has to have, is means testing now


16 Kat

Credit card chaser you are dead wrong. I have heard that voice in my head while at the store planning to use my credit card. It sounds something like this…….”if I’m gonna put it on a card, I should make it worthwhile and get MORE of the things I want now!” I swear I don’t know where that rationale came from…I know it’s stupid…. But that’s what went through my thoughts anytime I was putting something on credit. Maybe you have never been at the end of your money before the end of the month like I have many, many times. I have learned this lesson the hard way and will never have another credit card again. Cash IS King Baby!!!


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