‘I’d rather be caffeinated than depressed with $6’: Young Americans are rejecting Dave Ramsey’s financial advice — here’s why they say they’re ‘not willing to do anything to get out of debt'

Social media users are scorning Ramsey’s advice

The hashtag #daveramseywouldntapprove has about 67 million views on TikTok, with scores of users posting videos criticizing the finance personality for being out of touch with reality and shaming their money habits.

Benson, for example, didn’t hesitate to jump on the bandwagon with his own content, featuring himself sipping a pumpkin cream cold brew or getting a $4 Crumbl cookie before cutting to his Ramsey impersonation watching menacingly from a distance.

It’s clear that Ramsey’s advice, which often includes living frugally or taking on more work to increase your income, doesn’t quite resonate with younger listeners.

In a recent TikTok, Kate Hindman, a 31-year-old administrative assistant in Pasadena, California, emphasizes that her mental health and quality of life are far more important to her.

“I’m not willing to do anything to get out of debt,” she says. “I’m not willing to eat rice and beans everyday, I’m not willing to have three jobs and not spend time with my children. I’m not willing to forgo my favorite salad on a Friday.”

Hindman explains that her bills are so massive that a little extra cash saved here and there isn’t making a major dent in her debt.

“The cost-of-living and low wages is to blame for the financial woes of most Americans,” she says. “Being told that we can incrementally make these big differences if we just give up our quality of life for five, 10 years is absurd.”

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Ramsey’s financial advice isn’t always right

Hindman decided to convert $30,000 in credit card debt into a debt consolidation loan with an 8% interest rate — a tactic that Ramsey famously despises and claims doesn’t actually work.

Of course, just like any debt-solving hack, it depends. It can be harder to keep track of multiple credit cards at once than pay off one bill each month. Plus, if you secure a lower interest rate on your loan than what you were grappling with on your credit cards, this can be a great opportunity to save hundreds or thousands of dollars on your debt load in the long run.

On the other hand, there could be additional costs involved with your new loan, such as prepayment penalties or late payment fees.

But Ramsey’s own recommendation, the snowball method — in which folks pay off their smallest debt (or account with the lowest balance) first and make only minimum payments on all of other outstanding debts — might not be the right solution either.

While this method could offer some the behavioral incentives to keep going, it can also end up costing you more in interest and take longer to clear your debt, compared to cracking down on higher-interest debts first.

“What Dave Ramsey would say is, ‘I don’t care if paying down the highest-interest debt first is cheapest, because if you give up midway through, that’s more expensive,’” James Choi, a finance professor at the Yale School of Management, told The Wall Street Journal. “I think the jury is out on that.”