Dave Ramsey has fervently preached financial advice to North Americans for decades — but younger generations are now slamming the white-bearded radio host for offering counsel that doesn’t quite account for the current cost-of-living crisis.
One frothy example is Ramsey’s repeated attacks on those who spend money to buy their daily cuppa Joe. In a 2021 blog post, Dave Ramsey claimed a daily coffee habit could cost someone US$766 a year (about C$1,044 at the time). As of 2024, with rising café prices, that cost is closer to US$950 annually (C$1,300), according to Statista and recent coffee price data. That’s quite a bit of money, explains Ramsey — money that could be spent on paying down student debt, boosting savings or investments or even towards better consumable purchases, such as a newer vehicle.
But the younger generation argues that they’d rather sustain their mental well-being and hold onto the small luxuries that bring them joy rather than save a little extra cash.
“Self-care is extremely important,” Jarrod Benson, a 32-year-old comedian from Orlando, Florida told Business Insider. Benson considers his daily coffee purchase a self-care routine. He adds: “I’d rather be caffeinated than depressed with $6.”
Does Benson have a point? Is it important to spend on the small luxuries? Or should more people heed the advice of Dave Ramsey (and other financial influencers) and cut back on the little luxuries in life?
Social media users scorn Dave Ramsey’s advice
As of May 2025, the hashtag #daveramseywouldntapprove has about 85 million views on TikTok, with scores of users posting videos criticizing the finance personality for being out of touch with reality and shaming their money habits.
Benson, for example, didn’t hesitate to jump on the bandwagon with his own content, featuring himself sipping a pumpkin cream cold brew or getting a US$4 Crumbl cookie before cutting to his Ramsey impersonation watching menacingly from a distance.
It’s clear that Ramsey’s advice, which often includes living frugally or taking on more work to increase your income, doesn’t quite resonate with younger listeners.
Not willing to do anything to get out of debt
In a recent TikTok, Kate Hindman, a 31-year-old administrative assistant in Pasadena, California, emphasizes that her mental health and quality of life are far more important to her.
“I’m not willing to do anything to get out of debt,” she says. “I’m not willing to eat rice and beans everyday, I’m not willing to have three jobs and not spend time with my children. I’m not willing to forgo my favourite salad on a Friday.”
Hindman explains that her bills are so massive that a little extra cash saved here and there isn’t making a major dent in paying down her debt.
“The cost-of-living and low wages is to blame for the financial woes of most,” she says. “Being told that we can incrementally make these big differences if we just give up our quality of life for five, 10 years is absurd.”
According to Equifax Canada, Gen Z and Millennials carry average non-mortgage debts of C$17,338 and C$29,056 respectively — levels that have grown even as wages stagnate.
Ramsey’s financial advice isn’t always right
There’s another reason for the backlash against Dave Ramsey: His financial advice isn’t always the right.
For instance, Hindman decided to convert $30,000 in credit card debt into a debt consolidation loan with an 8% interest rate. Keep in mind, interest rates on debt consolidation loans currently range between 7.5% and 13.5%, depending on credit score and lender type. To find the best rates, consider using a loan consolidater, such as Loans Canada. Despite the advantage of lowering your debt costs, this is a tactic Dave Ramsey famously despises. He claims it doesn’t actually work, arguing that the lower interest rate removes the pain of debt and can lead to people carry debt for longer.
However, the use of debt consolidation loans to pay down debt faster — and at a cheaper cost to the borrower — is undeniable.
Learn more about consolidation loans and loans to help pay down debt.
Debt consolidation loan options for Canadians include:
- Loans Canada: Debt consolidator with various options including personal loans, as well as a mortgage refinance option
- LoanConnect: Loans from $500 to $50,000
- Spring Financial: Competitive loan rates and the ability to apply and complete the process right from your mobile phone
- Fairstone: Canada’s leading non-bank lender with competitive rates for borrowers with fair to poor credit
Other debt consolidation options for Canadians: For those who want to pay down their debt quickly another option is to consolidate higher-interest debts using a low-interest credit card. By dropping your annual credit card interest rate from 22.99% to 12.99%, you can save more than $900 in interest costs (assuming you carry a $5,000 credit card balance and it takes three years to repay the loan). Good options for low-interest credit cards include:
Like any debt-solving hack, whether taking on a new, lower-interest loan really works, depends. It can be harder to keep track of multiple credit cards at once than pay off one bill each month. Plus, if you secure a lower interest rate on your loan than what you were grappling with on your credit cards, this can be a great opportunity to save hundreds or thousands of dollars on your debt load in the long run.
On the other hand, there could be additional costs involved with a new loan, such as origination fees—upfront fees a borrower pays in order to get the loan — prepayment penalties or late payment fees.
Using the Debt Snowball method to get out of debt
Rather than consolidate debt using a lower interest rate loan, Ramsey recommends using the snowball method. Using this debt repayment strategy, borrowers pay off their smallest debt (or account with the lowest balance) first and make only minimum payments on all their other outstanding debts.
This method of tackling debt works as it offers behaviourial incentives to the borrower. Paying off a debt is liberating and incentivizes the borrower to repeat the process — over and over, until all debt is repaid. However, tackling small debts, first, without any concern for interest rates can cost the borrower. Larger debts with higher interest rates go unpaid, sometimes for quite some time, and this adds to the overall cost and burden of the debt.
“What Dave Ramsey would say is, ‘I don’t care if paying down the highest-interest debt first is the cheapest, because if you give up midway through, that’s more expensive,’” James Choi, a finance professor at the Yale School of Management, told The Wall Street Journal. As such, Choi isn’t convinced that everyone should adopt the snowball method when tackling debt. And his skepticism may be justified. In a recent study by the University of British Columbia, researchers found that while the debt snowball method improved motivation, the debt avalanche method — paying your most expensive debt first — reduced repayment time by an average of four months.
While there’s little doubt that using the snowball method for tackling debt works, that doesn’t mean it’s the right solution for everyone.
So, what is the right solution, particularily when it comes to spending on those small indulgences?
What the health experts say
Research shows that when we focus on something that we believe is positive or affirming, this attention brings us joy and has a positive impact on our mental health.
“A little luxury is something that brings a spark of joy, beauty, or delight to your day. It is not something you need, but it is something that makes your day the tiniest bit more extraordinary,” explained Jillian Amodio, LMSW, Founder of Moms for Mental Health, in an interview with Verywellmind.com.
Over the last year, a number of surveys show that Canadians of all ages are feeling the pinch of the increased cost of living and, as a result, were making changes to how they spend money. This isn’t surprising since inflation has outpaced wage growth for the last few years. In a 2024 RBC report analysts showed how real wages in Canada were flat despite a 15% cumulative rise in core living expenses since 2021.
In the U.S., more than half (56%) said they’d have to make cuts to their household spending. Apparently, Canadians agree. In a 2025 Ipsos Reid poll, 61% of Canadians said they had cut back on dining out, with 49% delaying non-essential clothing or electronics purchases. These sentiments indicate a potential shift in what people consider essential. It appears that not everyone agrees on the relevance of little luxuries like buying a cup of coffee at the local barista.
“Little luxuries are personal and subjective. What feels indulgent to one person may not have the same effect on another," explained Robert Cuyler, PhD, and Chief Clinical Officer at Freespira, a U.S.-based private firm specializing in medication-free treatment of anxiety and panic attacks, in an interview with Verywellmind.com.
"The key is to find what works for you and make it a consistent part of your self-care routine. Remember, taking care of yourself is not selfish; it’s necessary for maintaining good mental health and being your best self for others,” Dr. Cuyler concludes.
— with files from Romana King and David Saric
Sources
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
