Does Dave Ramsey Think You Should Be Saving for College for Your Kids? The Answer May Surprise You

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Ramsey is a big proponent of saving money, but does he believe a college fund is crucial? 

Dave Ramsey is a big proponent of making smart financial decisions — which includes saving money. But, does he believe that parents should prioritize setting money aside in a college fund to help ensure their children can afford to earn a degree?

The answer isn’t as straightforward as you might expect. Here’s what the finance guru has to say about college savings.

Ramsey isn’t always a proponent of prioritizing a big college fund

Unsurprisingly, Ramsey believes parents should start saving for college for their kids as soon as possible. But there’s a big caveat to that: He wants parents to take care of their own needs before funneling money into a college account.

“Before you jump into saving for college for your kids, you need to set up your future for success,” Ramsey said. “Don’t worry, this isn’t selfish—it’s smart!” Ramsey urges parents not to save for college until they have all of their debt paid off except for their mortgage loan, and until they have an emergency fund with enough in it to cover three to six months of living expenses. He also urges parents to make sure they’re saving 15% of their incomes in a retirement account before saving money for their kids’ education.

After accomplishing these goals, only then does Ramsey think you should make a plan to start saving to help your kids cover the cost of earning a degree.

Is Ramsey right?

It may seem like doing all of these tasks first is going to delay your efforts to save for college for a long time — perhaps so long that you won’t be able to build up much of a college fund at all. But the reality is, Ramsey is absolutely right that becoming free of high-interest consumer debt and taking care of your retirement must be bigger priorities than saving for your kids’ education. And there’s a simple reason for that.

Your children can find other ways to pay for school, including scholarships and grants. But if you don’t have money saved for emergencies or for your later years, you can’t borrow your way out of that problem. You don’t want to get to retirement and end up having too little money to support yourself. And you don’t want to find yourself facing an emergency expense that you have to borrow for because you’ve focused on building a college fund instead of being prepared.

If you leave yourself financially vulnerable because you’re focused on saving for college for your kids, you could end up hurting your entire family’s financial stability. Those kids you didn’t want to burden could be forced to support you as a retiree when it turns out you don’t have the money to live independently, and that would be worse for everyone.

If you really want to make sure you’re saving for your kids, try to accomplish these other key tasks as quickly as you can — perhaps by taking on a side gig to pay down debt or living on a tight budget until you’ve got your emergency fund ready.

Then you can move ahead with building up that college fund while knowing you’re also going to be in a good position to take care of yourself, too.

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