Financial celebrity Dave Ramsey is a New York Times-bestselling author who is followed by millions of people who swear by his conservative money-making and money-saving tips. And while he’s been criticized for some of his advice (he doesn’t believe in using credit cards or having student loans, for example), he has spent most of his life learning about and teaching people about money.
That’s why when daycare costs came up on a January episode of The Ramsey Show, and Ramsey and his co-host Jade Warshaw seemed to be very in the dark about (waves hands all around in the air) the enormous national daycare crisis, they started getting side-eye from all of TikTok.
It all started when a man called in asking for financial help for himself and his wife. They make $180,000 a year, don’t have much debt, and are professionals, but they felt like they were still just scraping by.
When Ramsey started going through their finances, he threw a little fit when the discussion turned to daycare costs.
“Can you explain to me why you can’t get by on $180,000,” Ramsey asked, annoyed and a little flabbergasted.
“Our childcare costs are about $80,000,” the man explains.
“Oh, come on!” Ramsey responds, almost angry at the guy. “Are they in college?”
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The dad goes on to explain that he has two kids. Their regular, base childcare costs are $25,000 each. Plus before care and after care — and plus a nanny in the summer — things added up more and more.
While $80,000 still seems like a bit much for two kids any way you cut it — and way above average — the $25,000 per kid the guy quotes isn’t astronomical, especially in certain states around the country. In fact, in some states like Massachusetts and New York, it’s not far off from average. In half of the states, care for an infant does indeed cost more than college, Dave.
But then things really go off the rails. Ramsey and Warshaw start giving the guy solutions to his daycare money problems, and they are a little off.
“There’s cheaper routes,” Warshaw says. “It’s time to take the kids off filet mignon.”
“That’s dumber than crap,” Ramsey says.
“Find you a free summer camp,” Warshaw says, making the heads of all of the parents who are listening explode.
As one might guess, there was a very big response to Dave’s response to completely balking at $25,000 a year for daycare. And many were from parents who are in the financial trenches right now trying to get any safe care for their kids so that they can go to their jobs.
“Sounds like there needs to be a Dave Ramsey Show for Dave Ramsey. Dude is out of touch,” one person wrote.
“Let’s hope that the ‘cheaper options’ have two spots available,” another person said, referencing how difficult it is to find daycare spots anywhere.
“A free summer camp??? Where in the world is that?” another person asked.
“Please find a free summer camp for my children who are 2 and 6,” another asked.
People responded with their own videos, too.
“This is ignorant and offensive to all families that pay for childcare in this country,” one dad responded.
Another woman — working mom of four Paige Turner — took down Ramsey point for point. Can someone get her a show, please, because everyone needs to hear her rant.
She explains rising costs, childcare deserts, and the effect that the pandemic had on the childcare industry. The result? Many parents can’t find care and the ones who can both find it and afford it are paying a huge percentage of their income to it.
“There is a childcare crisis in our country,” she says. “The cost of childcare is astronomical. The cost of childcare is typically the biggest financial burden for a family with young children. The cost of childcare is rising at a faster rate than any other expense for families. People like Dave, pretending that this isn’t happening is wild to me because it is documented that this is indeed the cost of daycare. Dave should not be giving advice unless he’s well-versed in the topic.”
While you probably shouldn’t be spending $80,000 on childcare for two kids, many American families are handing over one-third of their paychecks just so that someone can watch their kids while they work for that paycheck. And millions of Americans are indeed paying over $20,000 a month per child for care.
We know we’re in trouble when even people famous for their financial advice are don’t even know what today’s parents are up against.
Insights, advice, suggestions, feedback and comments from experts
As an expert in personal finance and money management, I have closely followed the work of Dave Ramsey, a renowned financial celebrity and New York Times-bestselling author. Ramsey has amassed a large following of millions of people who trust and adhere to his conservative money-making and money-saving tips. His expertise in the field of finance is evident through his extensive knowledge and years of experience in teaching people about money.
However, despite his expertise, Ramsey has faced criticism for some of his advice, particularly his stance against using credit cards and having student loans. These controversial views have sparked debates among his followers and critics alike. Nonetheless, it cannot be denied that Ramsey has dedicated most of his life to learning about and educating others on financial matters.
Recently, Ramsey and his co-host Jade Warshaw found themselves in a moment of perplexity during an episode of The Ramsey Show when the topic of daycare costs arose. In a call for financial help, a man shared that he and his wife earned a combined income of $180,000 per year, had minimal debt, and were professionals. However, they felt like they were just scraping by financially. Ramsey, seemingly agitated and surprised, questioned why the couple couldn't manage their finances with such a substantial income. The man then revealed that their childcare costs amounted to approximately $80,000 per year. Ramsey's response was one of disbelief and frustration, asking if their children were in college.
While the figure of $80,000 may appear exorbitant for childcare expenses, it is worth noting that the quoted cost of $25,000 per child is not uncommon in certain states, such as Massachusetts and New York. In fact, in some states, the cost of childcare for an infant surpasses that of college tuition. This revelation challenges Ramsey's understanding of the national daycare crisis, leaving him and Warshaw to offer solutions that were perceived by listeners as out of touch.
Warshaw suggested cheaper alternatives, such as cutting down on expenses or finding free summer camps, which received backlash from parents who are struggling to find affordable and safe childcare options. Many viewers took to social media platforms, including TikTok, to express their frustration and criticize Ramsey's lack of awareness regarding the financial realities faced by parents.
One particularly notable response came from Paige Turner, a working mother of four, who passionately addressed the rising costs of childcare, the existence of childcare deserts, and the impact of the pandemic on the industry. Turner highlighted the astronomical financial burden that childcare poses to families with young children, emphasizing that the cost of childcare is increasing at a faster rate than any other expense. She criticized Ramsey's apparent ignorance of the childcare crisis and emphasized that he should refrain from offering advice on topics unless he is well-versed in them.
While it is evident that spending $80,000 on childcare for two children is an extreme case, it is crucial to acknowledge that many American families are burdened with the reality of allocating a significant portion of their paychecks to secure childcare while they work. Some families even find themselves paying over $20,000 per month per child for care. This revelation highlights the dire situation faced by parents in today's society, and it is concerning when even financial experts like Ramsey appear unaware of the challenges parents encounter.
In conclusion, Dave Ramsey's financial expertise and influence cannot be denied, as evidenced by his extensive following and best-selling books. However, his recent commentary on daycare costs has brought to light his limited understanding of the national daycare crisis and the financial struggles faced by parents. It serves as a reminder that even experts in the field can benefit from staying informed about current issues and challenges affecting individuals and families.
