Self-care vs. Financial health
Dave Ramsey has been a popular financial guru for decades. His advice on living debt-free and cutting expenses has resonated with millions of American boomers.
But there’s a shift in how the younger generation thinks about money and Ramsey’s no-nonsense advice.
Young people have been pushing back against Ramsey’s financial advice, and with conviction. Anti-Ramsey rhetoric is trending on TikTok, which has racked up millions of views under the hashtag, #daveramseywouldntapprove.
Not giving up premium coffee
Ramsey’s disdain for pricey coffee is well documented. He’s the guy who says, “Skip the latte and save for retirement.” But millennials and Gen Zers don’t think the way boomers do. For many young workers, life isn’t just about the bottom line; it’s about living to the fullest.
Their morning cappuccino isn’t just about getting their caffeine; it’s a moment of pleasure before starting a workday. And they’re not willing to sacrifice that.
Not buying a home
Ramsey’s advice on homeownership is another sore point for young people. Ramsey advocates for living debt-free and buying a house outright, in cash. But the current housing market has skyrocketed and has priced out most young people these days.
U.S. home prices surged by 20–30% annually over the past two years and by at least 75% overall in the last eight years. On top of that, mortgage rates have been going up, with the average 30-year fixed mortgage rate hitting 7.11% in February 2024.
But younger workers say buying a home in cash isn’t feasible when home prices are skyrocketing nationwide. The median home price in the United States is about $363,000 now and upwards of a million in some of the country’s priciest cities.
“It’s mind-boggling that the older generation that bought 4-bedroom homes for $50 and a pack of strawberries continues to lecture younger people on money management,” according to a Gen Z post on TikTok.
Rising living costs, student debt, and inflated home prices have left young workers disillusioned. They question the relevance of traditional advice in a world that’s evolving at a breakneck pace.
Why do so many Gen Zers feel that traditional financial advice doesn’t speak to them?
Mental wellbeing over financial wellbeing
Gen Z came of age during a time when the importance of well-being was heavily emphasized. This generation values maintaining mental, physical, and emotional health. Some factors influencing Gen Z’s perspective include: Staggering student loan debt that may take decades to repay. No wonder many prefer focusing on self-care rather than stressing over debts that seem impossible to pay off.
Previous generations typically worked to pay off debt and buy a home in their 20s and 30s. Today, home ownership happens later in life compared to previous generations, which helps explain why Gen Z is less focused on early financial independence and more on current wellness. Social media spotlights the importance of self-care routines, which puts pressure on Gen Zers to invest in their mental and physical health.
They’ll tell you that debt can be managed over time, but poor health impacts quality of life and career prospects. Traditional financial advice from gurus like Ramsey preaches about living debt-free and paying in cash. But Gen Zers embrace newer digital tools, like mobile payment apps and investment platforms such as Robinhood.
Having a plan never goes out of style
According to a recent survey, 65% of Americans worry about running out of money in retirement. And experts have warned that both Social Security and Medicare are on the road to insolvency if changes are not made soon.
Americans should expect the full retirement age to be pushed back further, with benefits to be reduced. Welcome to today’s “YOYO” (You’re On Your Own) retirement world, where outliving your savings is a real risk.
As a general guideline, experts say you should have at least one times your yearly salary saved by 30. A recent survey found the average retirement account balance for Gen Zers was just $3,000.
Many Gen Zers feel Ramsey’s one-size-fits-all advice is impractical and doesn’t account for today’s lifestyle and the new economic landscape.
But Ramsey’s got a point when he says that debt can mess up your financial freedom.
Prioritizing self-care can be healthy. But you shouldn’t neglect to plan for your financial security. With retirement security being a real risk, Gen Zers need to find a balance between living well now and saving for later.
Imagine this scenario: you’re now 70 but realize you won’t be able to retire because you didn’t save enough in retirement savings. All the self-care you invested in yourself won’t be able to help you then.
