Can You Disagree With Dave Ramsey?
Read Time / 2 Minutes
Theme / Financial Planning
“This is where Dave Ramsey and I disagree…” Rachel Cruze boldly muttered.
Is it legal for anyone, let alone a Ramsey personality, to have a conflicting opinion to Dave Ramsey? I didn’t think so. Maybe, Rachel felt confident her dad would soften up after she brought the grandkids over for their next family holiday celebration.
Their opinions clashed over the use of sinking funds. After completing Baby Step 3 (meaning all your debt, except your mortgage, is paid off, and you have 3 to 6 months of expenses in your emergency fund), Rachel challenges her listeners to consider adding sinking funds to safeguard the emergency fund.
What is a sinking fund?
Though traditional sinking funds are used by companies to proactively put money aside for the repayment of a future debt or bond, this concept can be applied on an individual and family level. Giving the definition a needed face lift, Rachel wisely defines sinking funds as a “strategic way to save money for a specific purchase by setting aside a little bit each month.”
Here are its four advantages:
#1 Whether you are saving for a new-to-you fuel efficient vehicle or a cruise with your family, a sinking fund allows you to save for something exciting.
#2 Certain purchase costs may feel overwhelming, a sinking fund allows you to save for anything by allowing you to chip at your goal, one month at a time.
#3 Many of us have experienced buyer’s remorse after a purchase. Knowing you prepared for a specific goal, a sinking fund helps to you to enjoy your purchase guilt-free.
#4 We know your car is going to need maintenance and your dog will need to go to the vet, a sinking fund helps lighten the load of an anticipated emergency.
If you aren’t strategic, you could quickly have many sinking funds and become overwhelmed. Consider kicking the tires by starting with one or two goals (example, car repair fund and/or travel fund) and you determine whether its adding or subtracting value to your life.
In a world where we don’t control much, sinking funds provide us an opportunity to put thought and effort towards something we CAN impact. It’s refreshing to hear a Ramsey personality choose to go against the grain by providing a different perspective on how to prepare our finances for a better future.
After watching Ramsey Solutions’ Are You Ready to Build Wealth in 2022 live stream, it was obvious Rachel and Dave reconciled. It’s safe to say they are enjoying holidays together as a family.
Ryan De Amicis
Wealth Advisor
408.758.6413
ryan@christianwm.com
