4 Dave Ramsey Rules we Broke and Still Paid Off $71k of Debt


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My family paid off $71k of debt in less than 3 years on a single income. We started by following Dave Ramsey’s baby steps, but over the course of our journey we switched a few things up! Today I’m going to share with you 4 Dave Ramsey rules we broke during our journey to debt freedom!

Dave Ramsey is the king of debt payoff, and reading his book The Total Money Makeover is what originally got us fired up about paying off debt! Dave has a really simple but strict set of rules called the Baby Steps. These 7 steps are meant to help you become debt-free and then wealthy over time. He is pretty firm about his steps, rarely wavering from them when he advises people on his radio show.

Dave Ramsey debt free family

When we started our debt-free journey we had two kids. We ended up having another along the way, and were living on my husband’s income alone, so it was definitely not easy! It was faithful budgeting, sacrifice and hard work that got us debt-free. You can read my full report about our journey here.

During the first year of our journey, I felt super dogmatic and strict about following the baby steps to a T. I feared we would fail if we didn’t do things exactly the way he said to. We were super gazelle intense and paid off a lot of debt, maybe $35k, that first year. However, somewhere along the way I realized that there was more than one way to be successful at our financial journey!

“I feared we would fail if we didn’t do things exactly the way he said to.”

I realized there might even be some better practices for my unique family circumstances.

So, I started listening to other personal finance professional opinions and expanded my horizons. We decided to break a couple of the Dave Ramsey baby step rules we had been following because we felt it was right for our family at the time, and I still have no regrets to this day. Here are the 4 baby steps that we broke, and why!


man and woman shaking hand with financial planner

1. Contributing to our 401k while on Baby Step 2

Dave Ramsey suggests you stop all 401k and retirement contributions while you are completing Baby Step 2, pay off all debt except the mortgage. He recommends putting the amount you were investing into retirement toward your debt instead. He has a couple of stipulations, like to keep contributing if you are 45 or older, but in general, he stands by this rule, even if you have a company match.

We decided not to follow this rule the entire time. After stopping 401k contributions for the first year of our journey (while we were insanely dogmatic and gazelle intense) we started contributing to my husband’s 401k again. He gets a 6-7% match, and that was just free money we were passing on! Insane.

I get why Dave Ramsey says to do this. Sometimes, it’s really hard to get the momentum going and find extra money to pay toward debt. In turn, you give up on debt freedom and your interest keeps robbing you of your income and freedom!

That’s why I don’t regret the year we stopped contributions. I do think it helped us stay the course, gain momentum, and pay off a ton of debt! But I’m also glad we started contributing again. We successfully paid off all our debt and were able to get thousands more saved into retirement at the same time.

two hundred dollar bills

2. Keeping More Than a $1000 Starter Emergency Fund

Dave Ramsey recommends you save $1000 fast as Baby Step 1, before paying off debt, as your starter Emergency Fund. Once you are debt-free, you will increase this to 3-6 months worth of expenses.

We broke this rule toward the end of our debt-free journey because we didn’t feel that $1000 was enough. Dave reasons that if you keep any more in there, you are pointlessly hoarding money that should be going toward paying down your debts. It makes sense. $1000 was perfect for the first year and a half of our journey when we were renting, had a good income, had 2 working cars, and very little risk. It started to feel way too small after we purchased an older home, our cars were getting older, we were adding a baby to the family, and so many more other factors. After we purchased our home, we kept $3-5000 in our Emergency Fund for the remainder of our debt-free journey.

tan suburban house

3. Purchasing a home while paying off debt

Dave Ramsey recommends you not purchase a home until all your debt is paid off (Baby Step 2) and you have an emergency fund in place (Baby Step 3). This makes saving for a down payment on a home Baby Step 3b (save 10% for a downpayment on a home).

We did not follow this advice! It’s not bad advice, it’s just that our way made more sense for us. We were taking a new job in a new city and moving about four hours away. The new company was paying for professional movers to move all our stuff to our new place! We also got a sum of money from the new job offer that we’d be able to use on a downpayment. We could have used that money to pay off the remaining $20k or so of our debt. But I didn’t want to pay off our debt, move into an apartment, and then 6 months later have to move again (by ourselves) after saving enough money for a downpayment on a house. We decided to do the house first out of convenience and tackle the remaining balance on our debt afterward. I don’t regret this at all!

I do think it’s wise to postpone buying a home until you are financially ready. For some people with unique circumstances like us, that could be before all debt is paid off.

hand holding credit card

4. Using credit cards

Dave is VERY against credit cards, and for good reason. The average American has over $8,000 in Credit Card debt! We never had large amounts of credit card debt, and started our journey to debt freedom just 9 months after getting our first card. There was only one month where we didn’t pay off the balance, and that was actually what freaked me out and inspired me to pay off all our debt like a madwoman in the first place.

About a year into our journey I learned about travel hacking (using credit card sign up bonuses and points for travel), and we decided to go for it! Now, we use credit cards responsibly and pay off the balances every single week. We get lots of free travel this way!

Click here to see the Chase card I’m currently using and the 60,000 point sign up bonus

I do not recommend credit cards to people who are just starting out paying off debt or people who are new to budgeting. That first year of our journey not using credit cards, getting a month ahead on all our money (earning before spending), and learning to budget properly without credit cards was essential for our success. Take a break until you are well established in your habits and budgeting. You won’t regret it.

Some people should never use credit cards ever again. If you have a history of large amounts of credit card debt or can’t be trusted with them, cut them up and throw them away for good!

However, if you’re committed to paying off the balances every single month and have a handle on budgeting, you might be ready to try your hand at travel hacking too.

And that’s it! I think Dave Ramsey gives generally good advice, but sometimes it can be too limiting and strict for people who are good with money and dealing with complex decisions. I believe all personal finance decisions are nuanced and what’s right for one person might not be right for another. There is more than one right way to become wealthy. In fact, there are unlimited ways and paths to take!

I am incredibly grateful that we decided to become debt-free! I do still like the Baby Steps in general and recommend them to pretty much any beginner. Just take them with a grain of salt, and when you become really smart and money savvy, you might find you want to change a few things up! Don’t be afraid to do your thing!

I hope you enjoyed this post about the 4 Dave Ramsey rules we broke while paying off our debt. I hope it inspires you to continue your own journey, even if that means paving your own path to meet the needs of your unique circumstances!

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9 Responses

  1. I love this. We became financially independent last month and yesterday we became debt-free! While I love listening to Dave, I have not followed his rules either. Credit cards have helped us become debt-free and I never intend to stop using them for their perks.
    People just need to learn how to use them! Unfortunately for some, their minds are hard-wired into thinking credit cards are bad. That’s just not true!
    I’m going to pin this to my Pinterest board 🙂

  2. Wrong, wrong , wrong. Your playing with fire. You got lucky. You have a millionaire give you the secret sauce and you want to add your own ingredient. I’m so happy it worked for you but Dave has helped more people become debt free and build unbelievable wealth than any other single person. Don’t try to fix something that’s not broken. You can’t retired or become wealthy on flyer miles. It’s a trap .

    1. I think nearly everyone that follows Dave Ramsey eventually changes things up and makes their own way. So all the success people are having through following him, which I agree, a lot of people do find success, IS with changing things up and not following the baby steps to a T.

    2. I don’t plan on our credit card points to help us to become wealthy, but they sure come in handy. You just have to be responsible.

  3. Still on Baby Step 2 but also on Baby Step 4,5, 6 technically. Hubby’s work matches his contributions to the RRSP. Our government will contribute 30% of what we invest in the kids RESPs and increasing to biweekly accelerated mortgage to in January. So I feel bad to cheat the baby steps but gotta do what works best for the family. We’re from Canada BTW

    1. Absolutely. Do not feel bad! There is not one way to financial success. There are many ways that will get you there. The trick is to keep working your plan and not to get distracted or give up along the way!!

  4. So true! We also have altered the “Baby Steps”. We will be done with the BS 2 in a couple of months, with only about $3,600 on an old credit card. We have become pretty. responsible and plan to go back to a credit card when we are done to get the perks. (paying it off every month of course) We also are contributing to my husbands 401K. We paid off our house years ago. We will NEVER go back into debt. I’m thankful for Dave’s advice, but at our age, we did need to make some adjustments.

  5. Gosh I would love to know more about how you paid off so much debt with one income. My husband and I just started FPU and he is the sole provider. I do some work on the side here and there but my main job is staying home with our children.

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About the Author

Welcome! My name is Merilee and I’m the creator of Easy Budget. I started this blog to help other families like mine crush debt, budget, manage money, and meal plan like pros!

Everything you find here will be useful, motivating, and always easy. Need to contact me directly? Reach me here!

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