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Episode 3603:
Jen Hayes reflects on the financial principles that transformed her own life, sharing how adopting key habits around debt, budgeting, and investing helped her pay off significant debt and build a stronger financial future. Her practical take on Dave Ramsey's core ideas offers listeners actionable ways to gain more freedom and control over their money.
Read along with the original article(s) here: https://www.jenhayes.me/5-crucial-ways-dave-ramsey-is-right-about-money/
Quotes to ponder:
"You know what you can do when you don’t have debt payments? Anything you want!"
"Debt is debt. Period."
"Live like no one else now so you can live like no one else later."
Episode references:
The Total Money Makeover: https://www.ramseysolutions.com/store/books/the-total-money-makeover-by-dave-ramsey
Wealthfront’s high-yield Cash Account: https://wealthfront.com/OFD
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[00:00:59] Five Crucial Ways Dave Ramsey is Right About Money by Jen Hayes of jenhayes.me You're listening to a personal finance blog right now, so you've probably heard of money expert Dave Ramsey. Dave has authored several books, teaches a popular course called Financial Peace University, which I highly recommend, and hosts The Dave Ramsey Show. I recently shared my thoughts on three ways Dave Ramsey is wrong about money.
[00:01:27] You can find that post titled, Three Crucial Ways Dave Ramsey is Wrong About Money, on my website jenhayes.me. This quickly became one of my most controversial posts, and it sparked more debate than any other article on this site. I do disagree with Dave on a few key points, but I love the vast majority of what he teaches. Reading his book, The Total Money Makeover, shifted my perspective and completely changed my life.
[00:01:53] Since reading that influential book a few years ago, I've paid off $127,000 of debt, bought a car with cash, and purchased my first home. I'm not sure where I'd be right now if my friend had never lent me a copy of Dave's book. I'm so incredibly grateful that she did. Here are five crucial ways Dave Ramsey is absolutely on the money, about money. Number one, cash is king.
[00:02:21] Quote, if you can't afford to pay cash for it, you can't afford it. Don't let monthly payments become a way of life. Dave Ramsey. Dave is strongly opposed to debt and encourages people to pay cash for everything instead. Even expensive things like cars, college, and homes. Note, Dave is okay with a 15-year mortgage on a home if you don't have enough saved to pay cash. This perspective is unusual in our society.
[00:02:48] Most of us are raised to believe that debt is a normal and necessary part of life. How many people do you know who have zero monthly debt payments? While it may seem crazy if you're used to debt, it is entirely possible to live a debt-free life, and there are so many benefits of doing so. As Dave says, quote, You know what you can do when you don't have debt payments? Anything you want. End quote. The average American household carries nearly $2,000 in monthly debt obligations.
[00:03:17] Between a mortgage, two car payments, student loans, credit card debt, and other forms of debt, it adds up quickly. Imagine if you had nearly $2,000 back in your budget every month. What could you do with that money if it wasn't going towards debt payments? Number two. Debt is always bad. Dave is blunt about his views on debt. He does not distinguish between good debt and bad debt, as many people do. I love this and completely agree.
[00:03:46] There was a time in my life when I thought that certain types of debt were necessary and that debt could be a useful tool. I no longer believe that. Student loans are not good debt. Debt is debt, period. Like Dave, I wouldn't tell someone not to buy a home with a mortgage because I realize that expecting everyone to buy a home with cash is unrealistic. However, I would not say a mortgage is good debt. But it's better than other types of debt, sure, but that doesn't make it good.
[00:04:14] There's no such thing as good debt. Number three. A budget is crucial. Many people hate budgeting. I get it. Budgets have a bad reputation. We think that they're restrictive and we don't want to feel deprived. The funny thing is that's not really true. A budget doesn't take away your freedom. It gives you freedom. Why? For one, a budget gives you permission to spend.
[00:04:40] You don't need to feel guilty or concerned about your spending if it's accounted for in your budget. Another reason a budget is freeing is because you can tell your money where to go instead of wondering where it went. You don't have to be broke all the time. You can get control of your money and achieve your financial goals, whatever they may be. Invest ASAP. This is one area where Dave Ramsey receives a lot of criticism.
[00:05:04] While personal finance nerds agree that investing ASAP is important, many are skeptical about Dave's math. Dave says that if you follow his investing advice, you'll receive a 12% return on your investments. Many people think this rate of return is unrealistic. I didn't mention anything about investing in my post about why Dave Ramsey is wrong for one crucial reason. People are missing the point here.
[00:05:30] Dave Ramsey himself has said that even if you disagree with the 12% return, it doesn't matter. If he's half wrong and you get a 6% return, you'll still earn a lot more on your investments if you start early. The sooner, the better. That's the point. Start as soon as you can and you'll reap the benefits of compound interest over many years. The Joneses are broke. My favorite Dave Ramsey quote is, quote,
[00:05:57] Live like no one else now so you can live like no one else later. End quote. If you do what other people are unwilling to do, working like crazy, being super frugal, living way below your means, you'll be able to live a life they'll never be able to live. While they're drowning in debt for many years to come, you'll be living your best life. What does your dream life look like? Do you want to travel the world, retire early, give generously, volunteer, work fewer hours, spend more time with your kids?
[00:06:27] You know what you can do when you don't have debt payments? Anything. You just listened to the post titled, Five Crucial Ways Dave Ramsey Is Right About Money by Jen Hayes of jenhayes.me. My philosophy with money? It's a tool for freedom, not a source of anxiety. Wealthfront helps you tune out the noise and earn more on every dollar with a high-yield cash account and sophisticated, easy-to-use investing products.
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[00:07:22] for your first three months on up to $150,000 balance. Then you can add another 0.25% APY increase above the base APY, no expiration date or balance limit, just by enabling direct deposit of $1,000 a month, plus open, fund, and maintain an investing account. Join the million-plus people trusting Wealthfront. Visit wealthfront.com slash OFD. Terms and conditions apply. This is a paid endorsement of Wealthfront. Client experiences will vary.
[00:07:51] Wealthfront brokerage is not a bank. The base APY is as of January 30th, 2026, and subject to change. For more information, please see the episode description. Get the Unreal College deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate
[00:08:21] with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. While there is some Dave Ramsey advice I disagree with, I can't ignore the fact that he has helped so many people get out of debt. I think the beautiful thing about Dave Ramsey's baby steps is that they're simple and easy to follow and most applicable for getting out of debt.
[00:08:49] Working your way out of debt is relatively straightforward and for me has been the most enjoyable part of my financial journey. The advice to live below your means, invest early, and stick to a budget is tried and true financial advice that applies to almost everyone. But I'm not sure I agree that everyone should pay off their mortgage as fast as possible. A big reason I'm not in a rush to pay off my mortgage
[00:09:15] is because I'm not comfortable with having a big percentage of my money locked up in an asset that isn't going to produce income for me in retirement that assumes I want to live in my house and not sell it. If my net worth was a bit higher, I'd probably put more money into my house. I like the advice from my friend Frank Vasquez over at Risk Parity Radio who recommends to have no more than 10 to 20% of your net worth in your residence
[00:09:41] so that you can put the bulk of your money into income producing assets. I had a listener reach out to me recently asking if I thought she had enough money to retire early. While she had over a million dollars, a large majority of that was in her house. So she couldn't really live off that in retirement unless she sold the house. So all that to say, mortgage debt really is a different animal than student loan or credit card debt.
[00:10:08] And I think a more useful way to look at it is firstly, how can I keep my housing costs way less than 30% of my take-home pay? This is to avoid becoming house poor. And secondly, how do I balance how much money I'm putting into my residence with the need for income producing assets? And that should do it for today. Have a happy rest of your day and I'll see you tomorrow where your optimal life awaits.