4 Financial Advisors Share What They Really Think About Dave Ramsey's Advice

Dave Ramsey is a popular figure in the personal finance space, and many of his followers gain tremendous value from following his well-known financial advice. While many financial advisors agree with the bulk of Ramsey's advice, some caution against following the financial guru's every suggestion.

Keep reading to learn what four financial advisors think of some of Ramsey's more popular suggestions.

Ramsey is very against taking on or holding onto any debt of any kind, but some advisors caution against completely avoiding debt altogether.

"While I agree that people should seek to minimize debt, they certainly shouldn't forego investing until all debt is eliminated," says Robert R. Johnson, PhD, CFA, CAIA, and Professor of Finance, Heider College of Business, Creighton University.

In fact, Johnson says that waiting to invest until you've paid off any outstanding loans or credit card balances can prevent you from taking advantage of significant savings opportunities, including your company's 401(k) match program.

Ramsey believes you should avoid hitting up their favorite barista when they're on the road, but Johnson says that this advice isn't one-size-fits-all, since people place different values on different things, and while some may find saving $7 on a cup of coffee is a worthwhile step, others may see it as cutting out the only bright spot in their day.

Instead, he suggests spending money on the things that provide the most pleasure, and cutting back on those expenses that don't offer much in return.

Ramsey suggests that retirees can withdraw up to 8% of their retirement portfolio to fund expenses in their golden years. This is double what some experts suggest, including Johnson, who says taking this much money out can increase your likelihood of running out of money.

Before going ahead with a high withdrawal rate, Johnson suggests running your own numbers or working with a financial advisor to determine what's appropriate for your situation.

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One thing the pros can agree on is Ramsey's belief that everyone should have enough money saved up to cover between three to six months of expenses.

The only thing that Filip Telibasa, CFP and owner of Benzina Wealth disagrees with is just how much money you need to keep on hand. While Telibasa believes that this is a good range, he says that people should base their savings on their actual needs.

"For example, if you have one source of income and dependents (kids) then you should be closer to 6 months," he says, adding that those with two income sources and no children may need far less.

Ramsey advises his followers to steer clear of credit cards, but Chelsea Williams, founder and financial expert at The Money Whisperer, disagrees. Instead, she says that when used wisely, credit cards can become a powerful tool that allow users to build credit, earn rewards, and even increase some of their financial flexibility.

"Instead of fear-based avoidance, I advocate for learning to manage credit responsibly to create financial security," she says.

Still paying down your mortgage? While that advice flies in the face of what Ramsey tells his followers, Williams says that carrying a note on your home can be a good thing since it doesn't tie all of your money up in your property.

Instead, she suggests a balanced approach of paying down your mortgage while also investing in assets that will help you to generate wealth over time.

Ramsey is famous for suggesting that you should eliminate all discretionary spending while you pay off debt, including spending money on anything other than the essentials when food shopping.

"I do not believe in eliminating spending on things you enjoy — that is why you work so hard to earn money in the first place," says Telibasa, who says targeting expenses in this way can be unproductive. 

"Instead, I am a huge fan of Reverse Budgeting," he says, explaining that this approach works better to find a plan that takes into consideration what is important to you.

In Ramsey's famed "baby steps" approach, he suggests investing 15% of your household income towards your retirement. However, experts like Kristen M. Tidd, CTFA, VP and Senior Trust Relationship Officer at Greenleaf Trust says this number isn't enough.

"Depending on financial goals, inflation, and lifestyle, 15% savings may be too low for some individuals or families."

While financial advisors tend to agree that it's good to pay off debt, many diverge from Ramsey's advice in a lot of places, including when it comes to the best way to go about getting free of loans and credit cards.

As you navigate your finances, it's helpful to listen to information from popular figures, like Ramsey. But at the end of the day, you'll need to choose what information works best for your own unique financial situation.