Thanks for pointing this out Nathan.
You’re right that in Step 3, Ramsey prescribes saving 3–6 months of expenses.
This may be enough for people in a fairly stable income and expense situation and without too many responsibilities. However, if you’re self-employed, have kids, and/or don’t have a strong family support system, 3 months is woefully short of the mark, and even 6 months isn’t enough.
In addition, Ramsey says you should save 15% toward retirement. As I show here, that’s nowhere near enough:
Saving 15% of income means you’ll be able to retire in about 43 years. If you’re in your early 20s, that may be acceptable. However, if you’re in your mid-to-late 30s, let alone older, that puts retirement off to your late 70s, early 80s, or aven later. Few people are healthy enough through their 60s and 70s, let alone 80s, to continue working full time.
Ramsey also says to pay off your mortgage early. That’s a terrible idea for almost everyone as I explain here:
In short, yes, Ramsey’s prescriptions are far better than burying your head in the proverbial sand and forever spending money you don’t have on things you don’t need to impress people you don’t care about.
However, his advice is nowhere near what most people need to do to achieve financial independence or reach their other financial goals in a plausible time scale.
