About · Press · Contact · Write For Us · Top Personal Finance Blogs
Featured In:

Are You A Fan of Dave Ramsey or Suze Orman?

By Mark Riddix

Millions of people tune in each week and follow the advice of personal finance experts, Suze Orman and Dave Ramsey. They are the two most well known figures in the area of personal finance in the country. Guests call in to hear Suze’s opinion on whether or not they can afford a luxury cruise. Callers check with Dave to see if their financial house is in order. So, who has the better advice? Let’s take a closer look at the two financial pundits.

Dave Ramsey

Dave Ramsey is the author of numerous books and hosts a nationally syndicated radio show and a financial program on Fox Business. He has an “in your face” style of teaching, and many people tend to reject his teachings because they’re so different than what you normally hear from personal finance gurus. His personal finance advice has a common sense approach, and many people criticize him for that, but even though his advice is considered “common sense,” statistics show that the majority of Americans still aren’t following the common sense approach to personal finance. In his book, “The Total Money Makeover”, Dave Ramsey outlines his financial plan called, The Seven Baby Steps.

The Seven Baby Steps

1. Start with a $1,000 emergency fund.

The emergency fund is designed to keep you from relying on debt to deal with any financial emergencies that occur. Dave states that unexpected results are not only likely to happen, but will definitely occur.

2. Pay off all debts using the Debt Snowball.

The debt snowball is a strategy of paying your smallest debts first. Accounts with smaller balances are paid before larger balances regardless of the interest rate. The reasoning behind this is that paying off smaller balances gives the debtor a sense of accomplishment and builds momentum towards paying off larger debts.

3. Place 3 to 6 months worth of living expenses in your savings account.

Once you have all of your debts paid off, you should increase your emergency savings to cover living expenses in case of job loss or illness.

4. Invest 15% of household income into Roth IRA’s and pre-tax retirement plans.

This is the wealth building part of Dave’s plan. All of the money saved using these plans is designed to be used strictly for retirement.

5.  Begin college funding for children’s education.

Start saving today for your child’s education. Dave recommends saving for college using Education Savings Accounts and 529 plans.

6. Pay off the mortgage on the house.

This is the largest debt that you will ever have in your lifetime, which makes it the last debt to pay off.  All of your extra income should go towards your mortgage principal and paying off your home loan as soon as possible.

7. Build wealth and give to charitable organizations.

Save for your heirs and contribute to your favorite charities so that you can leave a legacy for your kids and others.

These seven steps are the cornerstone to what Ramsey teaches, and he never deviates from these steps. You can always count on Ramsey to be consistent with what he preaches, and he lives a life that backs up what he teaches.

Suze Orman

Suze Orman has authored six best-selling books and hosts a financial program on CNBC. Orman also takes a common sense approach to personal finance, and she is often criticized for oversimplifying someone’s financial situation. Her philosophy and teachings are much different than Ramsey, because unlike Ramsey, she will not denounce the use of credit cards or other personal loans the way he does. In her book, “Suze Orman’s 2009 Action Plan,” she illustrates The 9 Small Financial Steps That Will Pay Off Big In The Future.

The 9 Small Financial Steps That Will Pay Off Big in the Future

1. Save a bit at a time.

Suze recommends building your emergency savings account by saving money a little at a time.

2. Have a little self discipline!

Eliminate non-necessity spending from your budget. Look through your bank and credit card statements and eliminate any unnecessary spending.

3. Automate your plan.

Make saving for your emergency fund, retirement plan, and savings account automatic. Regularly scheduled transfers can make saving money and paying bills a breeze.

4. Max out on the company’s match.

Suze suggests contributing enough to your 401(k) to receive the maximum amount of matching funds from your company. Not doing this is the same as turning down free money.

5. Invest in a Roth IRA.

Suze recommends that you create a Roth IRA for the tax-free income growth. For more information on Roth IRA’s, read my article on What is a Roth IRA – Benefits and Restrictions.

6. Subtract your age from 100 and put that much in stocks.

The percentage that you should invest in stocks is your age subtracted from 100. The rest should be invested in bonds.  The stock portion should be broken down with 70 percent in U.S. stocks and the rest in international funds.

7. Spend $50 a month for peace of mind.

$50 a month will buy you a term life insurance policy which should give you and your family peace of mind.

8. Create the four most loving documents in existence.

Every person should have a revocable living trust, will, power of attorney for finances, and power of attorney for healthcare.

9. Add a 13th mortgage payment.

Making one extra mortgage payment a year will take five years off of the length of your mortgage.

Review of Dave Ramsey and Suze Orman

I personally prefer Dave Ramsey to Suze Orman, because I think Dave’s method of getting out of debt works faster. Although Suze is the more entertaining of the two, her plan teaches debt management whereas Dave’s plan teaches debt elimination. Dave Ramsey has a solid “no nonsense” approach to getting out of debt. The Seven Baby Steps are straight forward and will have you living debt-free in a matter of years. You would actually save more money by paying down your highest interest debt first, rather than the smallest balance, but I see where Dave is coming from. He wants to keep people motivated to pay off their bills.

Suze Orman offers a financial plan that covers everything from spending habits to investing for retirement. Suze deals with psychological and emotional roadblocks that keep you from building wealth. Her plan is most beneficial to individuals seeking to reduce debt and build a nest egg simultaneously. Both of them are very popular, but Orman has a unique way of connecting with her guests.

My only issue with both Suze and Dave is that their advice can be too simplistic and generalized. A one-size-fits-all approach may work for some clothing items, but not for financial advice. Everyone’s situation is different and the same financial plan will not work for everyone. Even still, Dave and Suze’s plans are a good starting point for someone just learning about personal finance.

Who do you prefer: Dave or Suze?

(photo credit: meddygarnet)

Mark Riddix
Mark Riddix is the founder and president of an independent investment advisory firm that provides personalized investing and asset management consulting. Mark has written financial columns for Baltimore and Washington, D.C. area newspapers and is the author of the book, Your Financial Playbook.

Related Articles

  • http://personalfinancejourney.com Lakita (PFJourney)

    Great analysis of two PF giants.

    When I made a conscious decision to turn my finances around, two of the first books I read were” Women & Money by Suze Orman and Total Money Makeover by Dave Ramsey.

    I appreciated the fact that Suze dealt with WHY people treat money the way they do on an emotional and philosophical level. It helped me identify behaviors that when confronted would lessen my chances of making the same mistakes in the future. While I don’t agree with everything she says…he books have been helpful. Oh, and the “Can I Afford it Segment….COMEDY!”

    Dave’s approach in Total Money Makeover gave me the “HOW” to treat money. The steps were more practical and tangible for my situation. I’ve watched his show and listened to his radio broadcast…its growing on me. I didn’t connect the same way I did with Orman’s show. I also appreciate Dave’s Biblical approach to financial stewardship.

    Both gurus have information I can glean from. If I had to pick a favorite it would be Dave Ramsey, because my personal approach is more closely aligned with his Baby Steps.

    • Mark Riddix

      Thanks!

  • Karmella

    I agree that the two plans/philosophies seemed to be aimed at different types of situations, and I think both of them have some strong points. Personally, I think the ideal approach would be for a person to take the advice out there and craft something that works for him/herself. But I think one reason these two strategies are so popular is because sometimes a plan helps – it may not be an ideal plan, or customized, but there’s some value in having it right there in black and white, no guessing and not much ambiguity.

  • Brenda

    MY DH and I have tried Suze and we did not get very far. We started using Dave’s plan about 15 months ago. We have paid off $40,000 in debt and only have $23,000 more to go. Following his plan with a budget and knowing where our money goes has brought us peace, no more worrying about whether we will have enough in the bank to cover the bills. It has also gotten us on the same page about our finances and we really don’t argue about this subject anymore. Listening to Dave’s radio show everyday and using his books keeps us on track. In my book Dave is a God send.

  • gina

    Although I believe that Suze has a more comprehensive plan, I think that Dave’s is more user friendly and easier to start with. Once you are out of debt, I think that Suze’s advice can be more helpful to expand on your financial goals.

  • Mike

    I started watching suze orman many years ago and when I was introduced to dave’s radio show from my mother, I thought he was insane and one of the biggest a.., well you get the point. After attemting to “empower” myself as suze has always taught, I realized that I was deeper and deeper in debt and basically over leveraged. Last summer I started watching daves tv show and downloading the podcasts along with his fpu course and books and from then the concept really hit me. Debt is dumb and we make excuses daily just to keep it, justifying low rates and the potential we could have if we invest rather than pay off. I’m on the debt snowball road now too and dream of the day that I could wake up in the morning know that my entire (after taxes of course) paycheck is mine to burn, keep, donate, save without a mob of creditors holding their hand out. As one debt free caller has said, its an “uncommon freedom”. Dave should be one’s primary means with detailed knowledge coming from suze.

  • Winston

    Of the two PF gurus, I only know Suze Orman because she was on Oprah for couple times. And I have seen the name Ramsey somewhere before, but I never checked him out. That’s no surprise because I am not really familiar with a lot of famou American people. As far as I could tell based on your post, there are only minor differences in their ways of helping folks reaching the ultimate financial freedom. And since most of the time, they are talking what are supposed to be common sense, it is very unlikely that I will read their books because I hate reading a book that contains a lot of stuff that I already know. That’s why I prefer reading pf blogs. I can cherry pick topics that interest me :)

  • http://madsaver.com Mac

    Dave is a bit too in-your-face for me to watch his show, but his steps you listed are good solutions to get out of debt. I read Suze’s book, and it too is excellent. But really, I don’t really pay either much attention in my financial strategies as they are too general in their approach. Everyone has a different financial situation, but I’m glad they’re giving many people some ideas to build on.

  • Laura

    Suze Orman and Dave Ramsey have two different target audiences. While Dave is for folks who are deeply in debt and financially unsophisticated, Suze is for folks who are making good money and have a fairly good grasp of finances. Although I watch both TV shows, I get far more from Suze’s show. Dave’s show is good for a laugh because if you really think about what he’s said at times, it makes no sense at all. He comes up with little cliches that are at best ignorant, and at worst destructive to his ‘followers’. He seems to see all folks as financial ignoramuses, which is simply not true. He approaches his audience as a bully would, calling people ‘stooopid’ and the like, and basically presents himself with the maturity of a 12 year old. But hey, it’s fun to watch in a car wreck type of way. :-)

  • http://consciouslyfrugal.blogspot.com ConsciouslyFrugal

    Honestly, I think they’re essentially the same. They keep spouting the same information over and over (if you’ve read one of Suze’s books, you’ve read them all). It’s as if they have no “enough” point in their quest for personal wealth. At what point do you have enough?

    I much prefer Joe Dominguez (RIP), Vicki Robin and Monique Tilford of “Your Money or Your Life” fame. They found their enough points, stopped taking a salary for their program (you can buy the book and/or get their program for free at financialintegrity.org) and started up a non-profit to help folks reach financial independence. To me, that’s really walking the talk.

    Also, I don’t like that Ramsey and Orman’s teachings, unlike the YMoYL folks, don’t take into account social justice aspects of spending, e.g., who is making that article of clothing to cause it to be so cheap? Or how is that animal raised to make it so cheap to eat? It’s as if Ramsey and Orman are oblivious to values-based spending and the impact our personal financial choices have globally.

    • Jeff

      If you are deeply in debt and can barely keep your head above water, social justice is the last thing on your mind. If cheap clothes and cheap meat means getting out of debt quicker, count me in. But then again you’re just here to promote your blog.

    • Jeff

      If you are deeply in debt and can barely keep your head above water, social justice is the last thing on your mind. If cheap clothes and cheap meat means getting out of debt quicker, count me in. But then again you’re just here to promote your blog.

      • http://consciouslyfrugal.blogspot.in/ ConsciouslyFrugal

        Lord only knows how long ago this was posted. Anyhoo, Jeff, passive-aggressive insults don’t really do much to support any argument. FYI–I don’t “promote” my blog, as it is not monetized and I really couldn’t give a crap how many readers there are. I did, however, promote the Financial Integrity site, because it’s pretty awesome and unlike most other financial tools, it’s free!

        As for not caring about social justice, I will give a shout out to Suze Orman. I recall reading in one of her books that if you don’t care when you don’t have money, you won’t care when you do. I agree. Values aren’t income based. They are inherent.

        I was once deeply mired in debt and barely keeping my head afloat. Caring about social justice, particularly not exploiting fellow poor folk, was a primary catalyst that got me out of that debt. Poor people are not helpless or without choice.

        On a side note, in the future, it might be a good idea to note that if someone’s opinion differs from yours, it doesn’t mean that you are being personally attacked or that there are sordid motives behind that other person’s opinion. Sometimes, folks just differ in opinion, as we apparently do on this subject. The internet is a lovely place for misdirected anger, no doubt, but it’s hardly rational or helpful.

    • Jeff

      If you are deeply in debt and can barely keep your head above water, social justice is the last thing on your mind. If cheap clothes and cheap meat means getting out of debt quicker, count me in. But then again you’re just here to promote your blog.

  • Elizabeth I

    If you have substantial debt, Suze’s 9 steps will not eliminate your debt and you may go into more debt because the interest rate on your credit cards will be higher than the return you get on your savings.

    I do think Dave Ramsey cam be very simplistic and does not account for more complicated situations which cause people to be in serious debt for years….underwater mortgages, disabled workers, having kids with special needs, etc.

    However, no matter how much debt you have, you can start getting a “grip” on your spending, and build a small emergency fund.

  • http://mymoneytreeblog.com/ Jan

    I’ve read Dave & Suze, but right now I need to get my financial house in order fast and eliminate debt so I’m following Dave’s plan. It’s simple, straight forward and he’s very motivating. I do agree with the commenter above though that it doesn’t take into account some of the complicated situations that occur, but then again at least he makes you face up to the facts.

  • Mark Riddix

    Excellent responses. It’s interesting how some favor Dave and others Suze.

  • Bill

    I’ve listened to both Suze Orman and Dave Ramsey. I believe both are missing the nuts and bolts to financial management. Neither talk about how to setup and live on a working budget. Neither talks about living paycheck to paycheck. Neither talsk about how to properly allocate money for your monthly expenses. If more people knew how to budget their money, they would be more equipped to handle Orman or Ramsey. The website that offers the best software on bugeting is You Need a Budget – YNAB. This is by far the most valuable piece of information on personal finance out there! If you don’t know how to budget, how can you find the extra money to invest and do all the other things that Orman and Ramsey suggest?

    • Mike

      Have you ever listened to Dave Ramsey or are you marketing the site you mentioned? Paycheck to paycheck and budgeting is his niche! That’s what his shows are based on, so much so that it annoys many people. For goodness sake, he has an entire class dedicated to “monthly budgets” and the bare basics of investing. Do your homework before bashing my friend.

  • Megan

    I think both are fantastic and if people choose one or the other and listen to their advice, they will be better off. Personally, I prefer Suze’s approach. I have a finance background understand the numbers and how to budget. In reading and listening to her, she really takes a look at the emotional root of why what you are doing isn’t working. I don’t think Dave’s approach looks as much past the numbers. My husband and I currently only have student loan debt, so that is our only debt payment. The snow ball and interest rate are irrelevant in deciding how we pay it as it is all 1 loan and 1 interest rate. I really appreciate Suze’s appreciation for the emergency fund and, especially with the volatility of the economy, couldn’t sleep at night without an 8 month emergency fund.

  • http://joshuamonen.com/ Joshua Monen

    I’m a Dave Ramsey fan for sure. My wife and I went through his course, Financial Peace University, and successfully paid off ALL our debt! This allowed me to leave my job in cubicle nation and start my own freelance copywriting business. So yes, I am a big Dave Ramsey fan.

    And I understand his advice has not changed over the years while Suze Orman’s has.

    One recent example is when Orman started to advise people to only pay the minimum payment on their credit cards and to instead increase their emergency fund to at least 8 months worth of expenses.

    Maybe she’s on to something but I don’t think it’s as effective as Dave’s “Gazelle Intensity” approach to paying off debt. And I know there are several things that Dave recommends that don’t make logical financial sense (i.e. the debt snowball, where you pay the smallest debt instead of the one with the most interest) but they make perfect sense when you consider human behavior… and what ACTUALLY works (I’m also a bigger fan of reality than theory).

    He teaches a lot about behavior modification and is notorious for saying, “Children do what they FEEL like doing. Adults make a plan and stick to it.”

    Dave has taught me to act more like an adult with my money (even when I don’t feel like it). So that’s why I’m a Dave Ramsey fan.

  • http://joshuamonen.com/ Joshua Monen

    I’m a Dave Ramsey fan for sure. My wife and I went through his course, Financial Peace University, and successfully paid off ALL our debt! This allowed me to leave my job in cubicle nation and start my own freelance copywriting business. So yes, I am a big Dave Ramsey fan.

    And I understand his advice has not changed over the years while Suze Orman’s has.

    One recent example is when Orman started to advise people to only pay the minimum payment on their credit cards and to instead increase their emergency fund to at least 8 months worth of expenses.

    Maybe she’s on to something but I don’t think it’s as effective as Dave’s “Gazelle Intensity” approach to paying off debt. And I know there are several things that Dave recommends that don’t make logical financial sense (i.e. the debt snowball, where you pay the smallest debt instead of the one with the most interest) but they make perfect sense when you consider human behavior… and what ACTUALLY works (I’m also a bigger fan of reality than theory).

    He teaches a lot about behavior modification and is notorious for saying, “Children do what they FEEL like doing. Adults make a plan and stick to it.”

    Dave has taught me to act more like an adult with my money (even when I don’t feel like it). So that’s why I’m a Dave Ramsey fan.

    • Peter Houston

      I prefer a hybrid approach using the benefits from both authors (as well as a few others). I started by paying off my highest interest debts first, some credit cards that were over 18%, rather than the few grand I had on the 2% rates, which allowed me to pay off the other debts quickly. I then focused on paying off the mortgage and an AC loan, cutting every reasonable expense I could to sacrifice now for a better “later”.

      Anyone scoffing at Orman’s attention to FICO scores must not have applied for insurance, a good credit card, or any other debt, because they all use these scores so the higher your score, the better a deal you will get. Anyone upset over Ramsey’s professed attitude should remember that he is trying to motivate those without a clue when it comes to finances, definitely gearing his message to a lower scale audience than Orman’s. In the end, take the general advice they offer, apply it to your own circumstances, and then find a qualified professional to assist you (perhaps Mr. Riddix, vet your professionals accordingly) with a tailor made plan.

  • April Del Rosario

    Dave!!!! He makes things very simplified, common sense… breaks down budget basics… I understand the way he explains things very simply. We have paid off all of our debts. House is paid off!!!! No credit needed, we use cash. Daughter needs braces… We told her we will do it when we have saved enough money ($4k). She now wants to save as well…. She has learned by watching us. Its so cool. It really is freedom to not play around with debt/debt management. The crazy sacrifice is worth it.

The content on Money Crashers is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. References to products, offers, and rates from third party sites often change. While we do our best to keep these updated, numbers stated on this site may differ from actual numbers.
Advertising Disclosure: We may have financial relationships with some of the companies mentioned on this website. Among other things, we may receive free products, services, and/or monetary compensation in exchange for featured placement of sponsored products or services. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors.
Links monetized by VigLink
Close