Mr. Money Mustache vs. Dave Ramsey

Being a newcomer to the financial guru circle, Mr. Money Mustache decided to check out what his competitors have been saying  throughout historical times to see if they have their stories straight. So he spent a recent weekend listening, in full, to the audio book version of Dave Ramsey’s ultimate career work: the Total Money Makeover*.

As a disclaimer before I launch into the comparisons, Dave Ramsey seems like a good guy whose work has improved the lives of many people.  He’s already rich, but he continues to tour the world and sell motivational products to people and make even more money. Mr. Money Mustache will NEVER appear on infomercials or try to sell you books and CDs.  He’s already retired, and that would be way too much non-fun work. So I wish to arouse no wrath from any of his lawyers.

But fuck, what an annoying audio book that is. I’d never heard of this Dave Ramsey guy before becoming a public figure myself recently. But it turns out he is this Southern Preacher-type guy who has had a talk radio show for many years. He yells a lot when delivering his material, and sprinkles in plenty of biblical quotations and references to the interventions that god(s) make into the financial affairs of deserving subjects.  He likes to repeat a small group of mundane quotes over and over, while chuckling to himself as if they are funny. “Because if you live like no one else today, you’ll get to live like no one else later!”. And he inexplicably repeats the incorrect statement that the stock market averages returns of 12% per year in all of his examples.

So how does the Mr. Money Mustache target audience differ from that of Mr. Ramsey? I’m crediting Junior Mustaches as being a bit more adult than the folks needing the “baby steps” in his plan. You don’t need be slapped around to get your first $1000 available for tiny emergencies like a water heater replacement.

You are already making enough money and paying your bills.. you’ve got some self discipline. You’re just wondering how you can get some actual RICHES going on and have the option of having some more freedom in the not-too-distant future. And perhaps you like the funky rhymes that Mr. Money Mustache writes more than what spills from the keyboards of the other MCs.

What else do we do differently here? Well, I think the way of the ‘stash is different because I’ve never used any kind of budget. Never in my life. It seems inefficient to me, and a possible stumbling point because really, who can remember to do a chore like that every month? I believe budgets have worked for many people. But I have had greater success breaking it down to a much smaller level: the individual transaction. As a Mustachian you will learn to THINK before you make EVERY money transaction and optimize that transaction right at that moment. In short, you just don’t buy ANYTHING until you’ve really thought about it. This eliminates most purchases outright. Then you optimize the remaining purchases so they cost about 75% less than normal whenever possible.

For those wanting to wade in to test the waters and still see immediate benefits, I’ll present ideas for optimizing EACH AREA of life’s spending. And a few for income. You can adopt each one, and win, or ignore it, and not win in that area. Assuming you are currently getting by with very little savings, your savings will increase based on the number of changes you make. If you make them all, you’ll be rich in just a few years, woohoo!

This sounds simplistic, but it works because this country is so rich, and so cheap, that  even on a minimum wage income, you still have enough to buy food and shelter. And as someone smart enough to be reading Mr. Money Mustache right now, you’re probably earning much more than the minimum wage. That allows you to add luxuries like an efficient used car and carefully spaced extras like entertainment and toys, while still keeping MOST of your money for kickass saving and investment.

The other thing that Mr. Money Mustache will not do, is say things like “God brought a Jaguar back into my life” and “God tends to pour blessings on people going the direction he wants them to go”. (These are actual quotes from the Dave Ramsey book, by the way). I think we get enough religion by just listening to the political debates, and when it’s time to get rich, we do it using Solid Mathematics and Occasional Manly Swearing.

That’s why here, we maintain a separation of Church and ‘Stash.

Because we’re using Math, for example, I’m not going to tell you to pay off your smallest debts first as with the Ramsey “debt snowball”. I’m going to tell you to pay off your highest interest debts first. And I’m not going to tell you to cut up your credit cards and that you can’t have a home equity line of credit. I think these things are GREAT – but you will use them with the same discipline as if you were spending crisp cash freshly pulled from the Lips of a Cute Baby Angel. You must love your money and feel great pain every time you lose it by spending instead of keeping it by investing. And because you love it, you must always put it to work in the most efficient way possible.  That is my specialty. Thanks for choosing Mr. Money Mustache.


*Don’t worry, I didn’t actually buy something like that at 30 bucks, are you crazy? Just borrowed it from a friend.

  • Robert Zeman October 18, 2016, 11:14 pm

    Great article. Dave Ramsey was one of the first people I looked into about personal finance, and “Financial Peace” is one of the few books you can check out of a library that will implore you to stop living above your means. That being said, I am glad to have more interesting people like MMM available on the internet.

    One note about Dave Ramsey: He advocates tithing ten percent of your income. For somebody making 20,000 grand a year and trying to achieve a small savings to invest, that is 2 grand a year. AKA financial suicide. I have been going to A.A. for thee years now, and I love it. However, I DO NOT donate a dollar every time I go. That would add up to like thirty bucks a month. I get why Dave advocates this (hard core Christian), but I feel that is a horrible idea for non-rich folks trying to save money.

    Charity begins at home, I guess.

    • Adam December 23, 2019, 10:09 pm

      Not trying to be a Christian-splainer but the 10% tithing law is inherently tied to Jews. Christians have no commandment to tithe at all and at no specific amount. Sacrificial giving is part of the deal but the amount is decided by the individual. I have been to one church that said you shouldn’t give to the church at all if you are in debt.

  • Julie January 8, 2017, 3:23 am

    Mr. Stash: OH MY GOSH!!! Thank you so much for saying you don’t use a budget. I like to think that I’m a reasonably intelligent person, and every time I’ve taken the time and have gone to the effort to put together a formal budget, it’s been a nearly complete failure. My life is not static. If I could predict how much money I would need to spend in each of the flexible spending categories (meaning NOT the mortgage payment) in support of a dynamic family living in a place where the changes of seasons and the random variaion in the personal tastes and preferences of my children means that nothing I plan for today will be the same a month from now, I would be a financial genius. And soothsayer. You’re my new hero. :-)

    Also, thanks for pointing out that math, rather than a catchy rule of thumb, is the best tool to use when determining which debt to tackle first.

    A new fan.

  • Pharmurr February 10, 2017, 5:58 pm

    My dad always says, “Live like no one else, so that you can live like no one else.” He bought me Dave Ramsey’s book when I got married (along with three or four other people) and often quotes it as if he is teaching me something I don’t already know. Unfortunately, my dad just turned 50; I’m pretty sure we will retire at the same time (65 and ~40) as I’m a junior mustachian who plans to pay off $78,000 of school debt in one year, and the remaining $114,000 of the mortgage over the next ~year with the help of my own Mrs. Mustache ;). I’ve read Dave’s book a couple times, each time trying to skip over the stupid bible passages about what God wants me to do with my money. Obviously he wants me to put 10% back into the church that doesn’t accept half of my family (I wonder which church this is???). Long story short, I’m going to see if I can sell my “Total Money Makeover” on amazon now.

  • Jim July 11, 2017, 12:05 pm

    This post and the comments have been a fascinating read. I’ll not rehash all that has been said, but try to add a few new things.

    1. Dave Ramsey and Mr MM have more in common than difference. Both are clear on being smart with money, getting out of and avoiding debt, believe in being generous with assets, and both have a pugnacious personality that is engaging (although unique from one another.

    2. The two differentiate from one another over a few areas. I give MMM high marks for engaging the implications of a consumerist culture run amuck as problematic for the planets limited resources. DR does caution people to be aware of the marketing machine, but he still says that “stuff” is ok if you got the money. I like MMM clear call for us to be ethical ecologists in our financial lifestyle. DR has an extravagant (in my opinion) lifestyle that includes multiple homes, skidoos, multiple cars. As MMM points out above, Why is his necessary?

    3. I can deal with DRs personality, but I tire of his political,commentary. He doesn’t understand modern economics on a macro scale, and his overly simplistic critiques of congress get tiring after a while. Especially because he seems to favor one side in his political criticism. Example. He criticized Obamacare overtly, but when Trumps Treasury Secretary released proposed budget and counted the revenue side twice to make it balance, DR said nothing.

    4. DRs baby step approach is simple, it I think most people need a simple plan to get their financial,shit together. Especially when they are in trouble, as it seems 70% of Americans are these days. The baby steps force people to deal with their debt and their ridiculous spending at the outset. I think this is right on. You can’t do anything until you spend less than you make, pay off debts and then start saving. DR hits people with a 2×4 and that’s what we need.

    5. MMM gets it right, when he emphasizes that a shift toward friends, good work and a community focused lifestyle leads to a meaningful life. I applaud this emphasis and it is what makes his approach unique. DR might agree, but he does seem to talk much about it, thus leaving the impression that once you have a bunch of money you’ll be happy.

    6. I think some DR advice is just stupid. Intentionally trying to get your credit score to zero, is just nuts. You can be a wise user of credit, not be in debt. DR holds up this ridiculous promise of 10-12% annual gains in Mutual Funds. Also, his plan of saving 15% for retirement is not enough, unless you perpetuate the work for 40 years idea. MMM is pushing us to save so we are free from that rat race, so I like his encouragement to save much more to get to that place of freedom.

    I’m a liberal Christian which I know some think is not possible, but there are more out there than you think. We just aren’t on TV yelling and screaming. DRs style of faith is not mine, and he misses some things that are in the Hebrew and The Christian bible about money, like Care for the poor, the year of the a Jubilee, the ethical use of money. But I do appreciate his efforts to help people practice generosity.

    Like most things in life, I try to read and learn from a variety of sources, and incorporate what seems best into my approach. All this is to say, I’m grateful to both DR and MMM for the lessons they are teaching me.


    • John N June 20, 2018, 12:42 pm

      Jim, thanks for your comment. If I ever returned to Christianity, I too would be a liberal one!

      Reading MMM in 2013 caused me to retire at 57 instead of 65. I will be forever grateful :)

  • Mads July 31, 2017, 6:51 am

    I’ve been reading and listening to a lot of personal development books lately such as, The Millionaire Next Door, Poor Dad Rich Dad, The Richest Man in Babylon, The Simple Path to Wealth (where you wrote an introduction) and I saw Dave Ramsay’s book listed on Amazon aside all these great books, so I decided to give it a try.
    But already after having listened to it for less than 20 minutes I had to give up because it was so bad. He is so pretentious and I cannot believe some people hold his work in high regard.

    • Finn Bell December 1, 2022, 2:32 pm

      I listen to DR from time to time on the radio. He does offer some decent (but often flawed) advice. However, you are absolutely right – he is one pretentious douchebag. He drops little hints about his success here and there, how he’s got a lot of money, etc. – it’s really annoying. The fact that he constantly says to invest in “good growth and income mutual funds” all the time (as opposed to index funds) is A) what not to do, 2) super irritating, and D) very irresponsible of him.

  • Brooke Rutherford August 11, 2017, 2:51 am

    I have to admit I’m a fan of both MMM and DR. I don’t agree with everything Dave says, and I’m not religious at all, but the step-by-step get-out-of-debt program is a nice, basic plan for people like me who have only just woken up from years of being a consuma sucka. The Total Money Makeover is for the average Jill or Joe who wants to develop some basic maturity around money. MMM is obviously for the gifted and conscious segment of the population who see the power of money and lifestyle in achieving happiness. (At least that’s my take). I started my financial rehab reading this blog, and I go in between Dave and MMM on a daily basis. I use elements of both to get to where I want to go. This is my first comment on this blog, actually, so while I’m here I should at least express gratitude to MMM and the Cult for the always stimulating, epiphany-provoking ideas you share with us. Thanks for being such an inspiration to my generation (hey Millenials!).

  • Melinda February 15, 2018, 1:25 pm

    Thank you for being secular!!!

  • sexytaxman October 18, 2018, 8:13 pm

    I think Dave is a great foundation for financially illiterate folks–people who carry credit card balances and have zero emergency funds. Once you’re debt free, i think MMM is more useful and prescriptive. Its milk before meat though

    • RollingGreen November 6, 2018, 10:20 am

      I agree. I recently read the Total Money Makeover, thinking it was just for those in financial crisis, but it was surprisingly helpful in getting into the mindset of eliminating debt as fast as possible. I’m looking forward to focusing more on MMM’s investing advice once I’m done with debt, since I hear Dave’s advice is a bit flawed.

  • Jackie July 18, 2019, 6:13 am

    Well, I think Dave Ramsey has value to those that need a lot of discipline in getting out of debt. I don’t always agree with all the things he sells to make more money and actually so much information online from him, no one really needs to buy anything to follow his methods. I’m pretty much FI now, both hubby and me, and we have been married 2 years now and well, learning as we go. Something we just started was a SIMPLE budget, nothing very complicated. Take the annual income we get, chop off (stash) all the MUST PAYS, and what’s left divide by 12….that’s what we get to spend on everything else. If we have extras, then I might touch some of my 4% draw, but the goal is not to do that, rather coast and grow that for right now if we can, but it’s my cushion that possible draw on retirement funds….Anyway, simple I know, but we find a way hopefully, and this one is how we hope it works…..if not, we will re-evaluate I guess!

  • Ivan December 23, 2019, 3:52 pm

    So Dave Ramsey’s money and motivation advice is not worth listening to because he is a southern hillbilly Christian? Because you don’t like his style? That is the lamest thing I’ve heard in a while.

  • Marcelo January 19, 2020, 1:58 pm

    Laughed out loud at the separation between church and stach!

  • Joe February 18, 2020, 8:03 pm

    Half of what Ramsey recommends is flat out wrong or suboptimal . I would never recommend his material to anyone I care about. With that said, I’ve always seen Ramsey’s audience as being akin to reckless alcoholics.. atleast in a financial sense. These people rack up millions in debt on 30k/year salary. His audiences is beyond sensible planning / math. They need to be disciplined drill sergeant style. It’s an intervention.

  • Finn Bell December 1, 2022, 2:16 pm

    MMM’s article is spot on. The fact that Dave Ramsey promotes actively-managed funds and not index funds is absolutely mind boggling. He must have heard a nickel drop and decided he’d give poor information to everyone else for that sake of earning a few nickels from those actively managed fund companies. I’ll bet he has the majority of his money in index funds anyway! His advice is for poor people, and it’s not even the best advice, so, I mean, c’mon! Personally, I think Dave is full of crap.


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