Did you know that Dave Ramsey, the radio personality famous for offering financial advice (including advice on prenups!), actually went into bankruptcy himself? Dave Ramsey isn’t known for keeping his thoughts to himself, and prenups are no exception. He’s got a lot of ideas about whether or not prenups are worth it, whether or not the “average couple” should get a prenup, and whether or not he himself would get a prenup. Lucky for you, we’ve collected these ideas and have put them into the form of an easily readable 1200-word blog. Here we go!
Who is Dave Ramsey?
First things first: Dave Ramsey is an American radio personality (remember the radio?) who is known for offering financial advice on his syndicated radio program The Ramsey Show. Interestingly enough, he got his start giving people financial advice soon after going bankrupt himself. To provide a bit more detail: he got started in the real estate business immediately after graduating from high school and, by the age of 26, had amassed a real estate portfolio of over $4 million. In order to do so, he took out many loans. As a result of his overborrowing, he declared bankruptcy in 1988. Over the next few years, he worked to recover his financial standing and was able to do so by 1992, when he began a radio show to help people who found themselves in pernicious financial situations, usually involving large amounts of debt. Today, his company Ramsey Solutions, is working with the goal “to provide biblically based, commonsense education and empowerment that give hope to everyone in every walk of life.”
Why prenups matter in terms of financial health
Remember that marriage is not just a sign of commitment to your partner and of taking the ‘next step’ in a relationship — it is also a legal contract with real financial consequences. A prenup is an agreement that is signed by two people prior to marriage with the purpose of laying out the financial terms that both partners must adhere to during the marriage, in death, and if the marriage ends. The terms of the prenup — whether they are terms regarding property, debt, inheritances, alimony, custody, or taxes — override the default divorce laws that would usually take effect in whatever state the couple gets divorced in (if valid and enforceable). Having a prenup is a step towards financial health because it ensures your money is protected in any scenario, and you aren’t handing over half (or more) of your assets in situations you don’t want to.
A hypothetical example of why and how prenups can affect your financial health
POV: You are 25, head over heels in love, and ready to say “I do.” Life is fun – you travel, build a career, and share everything with your amazing partner. You’re a saver, while your sweetheart, well, not so much. But hey, love conquers all, right? They make killer enchiladas and always keep the house spotless, so you’re not sweating the small stuff.
Fast forward to your 30s, and your family grows with the arrival of beautiful babies. You decide to put your career on hold to be a stay-at-home parent, sacrificing a few years of earning potential. It’s a tough choice, but you know it’s right for your family.
Then, the unthinkable happens. You discover your partner has been unfaithful. Heartbreak aside, this, unfortunately, isn’t that uncommon (20-25% of men cheat in their marriage). And here’s where things get really messy…
Without a prenup, you’re at the mercy of your state’s divorce laws. Despite your years of diligent saving, you suddenly find yourself responsible for half of your ex’s secret $20,000 debt (ouch!). Plus, re-entering the workforce after years away is no walk in the park, and alimony is potentially not an option if you’re still employable. You’re left scrambling to find a job, childcare, and somehow manage a financial burden that wasn’t even yours to begin with.
Now, rewind and imagine this scenario with a prenup in place. Your savings are protected, your ex’s debt remains their own, and you have a clear financial roadmap to navigate this difficult transition. Yes, even in circumstances you could not foresee.
See? Prenups aren’t just about protecting your assets; they’re about protecting *you* – your financial stability, your future, and your peace of mind. They’re a safety net for life’s unexpected turns, ensuring that even in the face of heartbreak, you can move forward with confidence and security.
Dave Ramsey’s thoughts on prenups
During one of Dave’s January 2024 episodes of his show, he fielded a call from an Atlanta woman inquiring about prenuptial agreements from a spiritual, relationship, financial, and legal perspective. Ramsey expressed his general disapproval of prenups, believing they can hinder a couple’s financial progress by preventing complete financial unity. He explained his initial stance was firmly against prenups, but he’s since modified his view.
Ramsey now believes that a prenup can be beneficial when a couple with a significant wealth disparity is considering marriage. He argues that it safeguards the relationship from financial tensions and protects both individuals from potential interference by family members seeking financial gain. However, he maintains that prenups essentially anticipate the possibility of divorce.
6 reasons why Dave Ramsey is wrong in his thinking on prenups (respectfully)
Dave Ramsey’s thoughts that prenups will “stunt” a couple’s growth is (respectfully) misguided. We respect your opinion, Dave, but here’s why we think you should change your opinion:
- Prenups are like insurance: Divorce isn’t “anticipated” in a prenup any more than a bad vacation is “anticipated” with travel insurance. Or bad health is “anticipated” with health insurance. They are a responsible measure, not a sign of impending doom.
- Prenups foster financial clarity: Far from hindering financial unity, prenups encourage couples to proactively discuss and define their financial responsibilities. By outlining each person’s obligations, prenups promote transparency and understanding.
- Prenups establish healthy boundaries: Prenups outline financial ownership (who owns the house, car, debt, paintings, business, etc.), clarifying individual and shared assets. This establishes clear boundaries around debts, income, and financial decision-making, creating a sense of financial responsibility within the relationship.
- Prenups benefit all couples, not just financial-disparity-couples: While, as Dave mentioned, prenups can be particularly helpful for relationships with significant wealth disparities, prenups are ALSO valuable for couples without large wealth disparities. Life circumstances can change dramatically, and a prenup provides a safety net should unforeseen financial imbalances arise.
- Prenups can be an act of love: A prenup allows you to demonstrate your lifelong commitment and consideration for your partner, even in the unfortunate event of divorce. It ensures their financial well-being even if you two aren’t together. What’s more romantic than that?
At the end of the day, prenups get a bad rep from people like Dave for having misconceptions about what they are for. Remember, YOU ALREADY HAVE A PRENUP, and it is called your state default law. By getting a prenup, you are essentially writing your own rules and getting “insurance” on your marriage, just like you’d insure your travel, health, house, and car.
Bottom line on Dave Ramsey’s thoughts on prenups
While Dave Ramsey acknowledges the value of prenups for couples with differing net worths, we believe they’re a smart choice for *everyone*! Don’t just take our word for it – refer back to the previous section for 6 reasons why we disagree with Dave’s take.
Look, we all know Dave is a financial guru, but even gurus make mistakes. He’s human, just like us. We forgive him for his prenup misconceptions and hope he’s open to hearing our perspective! Prenups aren’t about anticipating divorce; they’re about responsible planning and protecting yourself and the one you love.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
0 Comments