Dave Ramsey's $1,000 starter emergency fund, the first of his famous “7 Baby Steps,” is facing renewed criticism from people who say the number hasn't kept up with modern costs. Some have even called it a "relic of the 90s." But in a recent r/DaveRamsey Reddit thread, supporters defended the figure, arguing it was never meant to be a full safety net in the first place.
Supporters Say It's About Behavior, Not Math
The original poster noted that a recent Bankrate study found 59% of Americans don't have enough savings to cover a $1,000 emergency expense. They argued Baby Step 1 isn't about covering every possible emergency but about proving to yourself you can save four figures. "Most people who are in major debt have never saved any money, much less a 4-figure sum," they wrote.
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One top comment echoed that point: "If you've ever been dead broke, then you would know how difficult saving $1,000 is. Trying to tell people that they then need to save an additional $1,000 because ‘it's not the 90s anymore' is soul crushing.” They continued, “Papa Dave knows people better than these finance chuds who think they're far superior to the average person for knowing how to calculate an interest rate."
Many agreed the goal is more psychological than financial. As one person put it, "Stop doing math because doing math isn't what got you into this mess." Another explained, "Optimization is useless without adherence."
Critics Argue $1,000 Is Outdated
Not everyone was convinced. One commenter said, "$1,000 just isn't enough. Your $1,300 water heater replacement just got you back into hot water—with credit cards." Others noted that, adjusted for inflation, the amount would be closer to $1,800 today. "If Baby Step 1 is to cover emergencies, $1,000 is unequivocally not enough," one person wrote.
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Some felt Ramsey is out of touch, pointing to his wealth and lifestyle. "He's not living like you and I are," one person commented. “The man is a multi multi-millionaire and doesn't even know how many investment houses he owns.”
Ramsey's Method Stays Firm
Still, many defenders emphasized the purpose is to keep people slightly uncomfortable until debt is gone. "A baby emergency fund isn't supposed to make you feel safe, it's supposed to make you feel uncomfortable, and drive you to laser focus on getting out of debt," one commenter said.
According to Ramsey's “7 Baby Steps,” once debts are paid off, the next step is to build a full emergency fund covering three to six months of expenses. For those following the system closely, the $1,000 is simply step one.
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