Do you like the Dave Ramsey Baby Steps or the Crown Money Map? Dave Ramsey created the Baby Steps and Crown Financial Ministries created the Money Map for prioritizing and setting financial goals. Both are widely used resources to help people shift from diluted efforts in achieving objectives to narrowing the focus on the most important goals based on one’s situation.
Is there a right or wrong answer or a better or worse solution? You can see that both are clearly working towards the same objective of financial freedom or peace. Both focus on savings and debt elimination which eventually positions one to build wealth and give more. But more on that later.
Versus the right or wrong or better or worse question, it may be more appropriate to determine which approach works best for your situation.
I invite you to follow along with me in this series as I walk you through both plans, discuss my observations, hopefully,stimulate your thinking and raise some questions. I’ll round out the series with some summary thoughts.
I plan to do one post for each phase (this one includes phase 1), so there will be 7 posts in total (including the summary post).
Disclaimer: I’m a Money Map coach so you might expect a bias towards the Money Map. I’m going to do my best to take an objective view point. I’m not necessarily for the Money Map. I’m all about finding what works best for the situation.
Baby Step 1 – Money Map Destination 1
What does the Baby Step say?
- Baby Step: $1000 in an emergency fund
What does the Money Map say?
- Begin using a spending plan & save $1000 for emergencies.
Observations and Questions
- Crown suggests creating a spending plan as part of destination 1. I think Dave assumes you have one when starting The Baby Steps. I haven’t gone through Financial Peace University (FPU), so I’m not sure.
- Is $1000 the magic number? I’m just curious as to what is so special about $1000. I’ve only heard this number from these two sources. Why not $1500 or $2000? One thought is that $1000 isn’t a small amount of money, but it’s not big savings either. It can probably handle most small to medium emergencies.
- Crown uses a scripture theme for each them which is pretty cool. “The wise man saves for the future but the foolish man spends whatever he gets.” (Proverbs 21:20 TLB)
- Things to do sooner than later are also included on the Money Map. I recently wrote an article on these suggestions.
What are your thoughts on this phase?
All the articles from the series:
After reading the Total money makeover. Before the step 1, there is a very intricate and specific budget form to fill out and follow. and ENVELOPS to put cash in.
Thanks for sharing Mrs K! That’s good to know for readers and probably a great reason to purchase this book for those who want to follow the Baby Steps, or just get some excellent financial advice from Dave Ramsey.
one big difference between Crown and Dave Ramsey.. .
Crown says it’s okay to use credit cards if you don’t carry a monthly balance. You use them for budgeted items and pay them off in full each month, not paying interest.
Dave Ramsey says to NOT use credit cards at all. Period. Dave says “If you play with snakes you will get bitten”.
All the credit card gimmicks like airline miles, free hat, brownie points back, cash back, etc… it’s all a gimmick to get us using credit cards.
Have you ever wondered why they work so hard to get us involved with credit cards? The answer is: They win, and we (the consumer) lose. The typical behavior of “most” People is that they wont pay the balance off every month, and most people overspend when using credit.
And most people don’t save money, and they use credit cards as an emergency fund.
Credit cards invite bad money management habits. I know because I’ve done it.
.-= Financial Bondage´s last blog ..Career fairs good idea or bad? =-.
I have read both books/systems (money map vs baby steps) and while I feel like both give excellent financial advice, I feel like Crown stands out as giving sound biblical advice. Dave’s “plan” and advice is the same as many other financial experts out there and is great worldly advice on how to gain worldly wealth. If this is what you’re wanting, if you want to “live like no one else” as Dave states on every page (with the idea, it seems, that you are somehow better and above others by doing his plan because you made early sacrifices and can later show off your wealth and be happier than those who ridiculed you early on) than Dave’s plan is the one for you. If you instead feel that what you have is God’s, given to you to simply take care of your needs AND THE NEEDS OF OTHERS, I think Crown is right on. While Crown gives great advice and practical steps to get out of debt, save for retirement etc… they do so in a way that constantly reminds you that you don’t “own” your money and that no matter what, it is ultimately God’s money and it is God who takes care of you.
Alisha, thank you so much for this awesome comment. I truly value it as a Crown Money Map coach. I completely agree with everything you said. Dave does provide great practical advice and tips, but Crown ultimately provides much more in equipping people with the knowledge and tools of living by God’s financial principles. I love Crown financial ministries!
We love Crown too! They stand out in a world that says gaining wealth is the purpose for life and happiness.
actually if you go through FPU Dave clearly states that its God’s Money and u should not walk around with a clinched fist. plus he states verses throughout the whole program. Dave credits the founder of crown for being is mentor. The only true differences are that crown allows credits cards if u pay them off every monthsand Dave says no altogether to credit cards. and u should use cash for emergencies.
Rebekah, thanks for your comment. I haven’t gone through FPU yet. My wife and I would like to do that soon. I’m glad to hear FPU covers Stewardship and that his program is coaching people to understand everything blogs to God and it’s our job to manage it.
We are going through FPU right now. While Dave doesn’t list a “spending plan” (aka budget) as a step, he devotes one or two lessons on this – you need to know where your money is going. One of his phrases is “spend it on paper, on purpose, before the month begins”.
I think the selection of a $1,000 is somewhat arbitrary but also intentional. If someone only has $17 in their savings account, $1,000 can seem huge, but is actually not that hard to obtain when you put your mind to it (he recommends yard sales, second jobs, cutting back on spending, etc.). For people who have never been savers, there is a huge sense of accomplishment of getting something done and feeling like you are getting off on a good foot.
Basically, I think it’s to encourage you as you begin the journey.
.-= Kendra´s last blog ..Friday Fun with Food and Finances =-.
Kendra, thanks for your comments!
You make a good point about the $1000 emergency fund. Aside from big emergencies such as medical, I think $1000 will cover most emergency expenses.
I’m hoping to go through FPU this fall with my wife. We’ve mostly gone through Crown courses, but I’ve read Dave’s Total Money Makeover and loved it. I love the approach of spending your money on paper first!
Thank you for your comparisons on Crown versus Dave. I have been struggling for years, and have taken every Crown class and have been trained years ago as a Crown leader. My husband and I were using the crown system and it worked! We were well on our way to paying off debt and getting expenses under control until we moved. After moving 5 years ago it has been so difficult to get back on track. With all that said, our children are now 5 years older – 18, 13, and 10 and we are wanting to do a “family” bible study to help ourselves as well as our children manage their money. Does anyone know which would be better from a family perspective?? Thanks for any help you can give.
Louisa, thanks for your comment. I’m glad to hear you’ve used many of the Crown tools. Personally, I think Crown is better from a family perspective. I think Crown offers better resources if you’re interested in teach your children what the Bible says about money. I also think the Money Map is a tool the children could understand. You could first talk about a map and what its purpose. Then you can related the concept of a map to your family’s financial journey. I hope this helps!
Great post, thanks.
Perfectly indited subject matter, thanks for information .
We went through a couple Crown (Christian Financial Concepts at the time) workshops many years ago and they were very helpful. We did do the money map but did not follow it diligiently, although we have done o.k. A couple years ago we joined a Financial Peace University group at our church and it helped us get back on track and refresh what we had learned. They are both good programs. Many people might respond well to the lecture format of Dave Ramsey. He is funny and entertaining. One thing I am not sure of, is Financial Peace a for profit business? I believe Crown is a non-profit. It is likely both are but I don’t know for sure. Dave Ramsey has been very successful, likely financially, with his book writing and radio program. Nothing wrong with that but the non-profit ministry vs. for profit might influence some people to chose one over the other.
Thank you for the comparison and to all for some excellent posts!!
The $1000.00 represents an obtainable goal for most people. its not enough for a transmission in your car but it is enough for the brakes if they need replacing. personally I carry more like 2500. in my emergancy fund. paying off everything but the mortgage before putting away 3-6 months living; just as a matter of saving the intrest, besides your monthly needs are much greater when you have debt than when it is paid off. it will take you longer to achieve the goal. the longer it takes, the people will not complete it. The idea may not be perfect but more people will stick with it if they have victories along the way, the past two years, esp the first year was tough, seemed like nothing was happening, then you realize that card a is gone, the car payment is gone, card b is gone, and so on. we are now 3 months from being debt free (except mortgage) then we start with the 6 mos, and will tackle the mortgage and retirement at the same time. Its been tough, but there is light at the end of the tunnel !
I had never heard of Crown Financial Ministries until today and I have enjoyed reading their website and now this blog. My husband and I have gone through Financial Peace U at our local church. It did help us get out of debt however any program will only work as well as you work the program. I am now looking at Crown’s teaching because of the emphasis on biblical teachings. My biggest disappointment regarding Dave Ramsey is that he has chosen to lend his name to endorse a product, window replacements for your home, that part of their high pressure sales is to use financing as a means to purchase the product. This seems like a contridiction of principles, either denounce debt and the use of credit or admit that it is exceptable under certain conditions, or even still admit that your principles can be bought if the price is right!!!!!!