Financial management and wealth building are important aspects of everyone’s life. As individuals strive to secure their financial futures, they often seek guidance from experts. Two popular sources of financial advice are Dave Ramsey and the counsel of Certified Kingdom Advisors (CKAs). While both approaches aim to provide a roadmap to financial success, they differ in their underlying principles and strategies. I will compare and contrast the key differences between Dave Ramsey’s Baby Steps and the advice offered by a Certified Kingdom Advisor. Full disclosure I am a Certified Kingdom Advisor and I have attended Dave Ramsey’s Financial Peace University. I personally agree with Dave Ramsey on many, but not all of his recommendations.
1. Foundational Principles:
Dave Ramsey’s Baby Steps are grounded in Ramsey’s principles of debt elimination, budgeting, and long-term investing. Ramsey emphasizes the importance of becoming debt-free, creating an emergency fund, and investing for retirement. His approach is widely recognized for its simplicity and focus on financial discipline.
As a Certified Kingdom Advisor, on the other hand, I integrate biblical principles into my financial counsel. I consider money as a tool to honor God, promote stewardship, and align financial decisions with faith-based values. As a CKA I emphasize principles such as giving generously, wise money management, and aligning investments with ethical and moral beliefs.
2. Debt Management:
Dave Ramsey’s Baby Steps places a strong emphasis on debt elimination. His approach advocates the “debt snowball” method, which involves paying off the smallest debts first, while making minimum payments on larger debts. This strategy aims to provide a psychological boost as individuals experience quick wins and gain momentum in their debt repayment journey.
As a CKA I also recognize the importance of debt management but approach it from a broader perspective. I encourage individuals to evaluate the types of debt they incur and prioritize eliminating high-interest debts. As a CKA I also provide guidance on avoiding unnecessary debt, discerning between good and bad debt, and utilizing biblical principles to make responsible borrowing decisions.
3. Budgeting:
Budgeting is a fundamental aspect of financial management. Dave Ramsey emphasizes the importance of budgeting as a means to control spending, save, and achieve financial goals. His approach encourages individuals to allocate their income into various categories, such as housing, transportation, groceries, and entertainment, to ensure that every dollar has a purpose.
As a Certified Kingdom Advisor, I also stress the significance of budgeting, but within the context of biblical stewardship. As a CKA I stress the importance of living within your means and not spending more money than you are making. I ask the question, “How much is enough?” As a CKA I emphasize the importance of giving. Giving breaks the power of money. I also encourage individuals to prioritize aligning their financial goals with their Christian beliefs.
4. Investing:
Investing for long-term wealth creation is a crucial aspect of financial planning. Dave Ramsey’s investment strategy emphasizes simplicity and long-term growth. Dave Ramsey speaks to a broad audience and gives general advice on investing. He advises individuals to focus on mutual funds with a track record of consistent returns and diversification to minimize risk.
Certified Kingdom Advisors, on the other hand, are licensed financial advisors and take a comprehensive approach to investing by incorporating ethical and moral considerations. As a CKA I look at each individual situation and provide the appropriate advice. The complexity of one’s portfolio depends on meeting the goals for each stage in life. I guide individuals towards investments that align with their faith and values.
Dave Ramsey’s Baby Steps and the advice of Certified Kingdom Advisors offer distinct approaches to financial management and wealth creation. While Ramsey’s methodology focuses on debt elimination, budgeting, and long-term investing. Dave Ramsey also has Certified Coaches. The coaches are certified by the Ramsey organization. Certified Kingdom Advisors are licensed professionals through state and federal agencies who integrate biblical principles and values into their financial counsel. The choice between these two approaches ultimately depends on you and your goals. Dave Ramsey has done more than any individual to help people out of debt. As you mature from “Baby Steps” in your financial journey, consider working with a licensed professional to guide you on your path to align your finances and financial goals with your values.
Investment Advisory Services are offered through Inspire Advisors, LLC, a Registered Investment Adviser with the SEC.
The opinions voiced in this material are for general information ONLY and are NOT intended to provide specific advice or recommendations for any individual.
This information is NOT intended to be a substitute for specific individualized financial, legal, and/or tax advice. Individual financial, legal and/or tax matters should be discussed with your financial, legal and/or tax professional.
There are no assurances that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to affect some strategies. Stock and bond strategies involve risk including loss of principle. Alternative investment strategies carry a higher degree of risk. All performances referenced are historical and no guarantee of future results.