People are often pretty short-sighted, spending money today that they'll want tomorrow. Debt makes it possible to prioritize your current self even more highly: you can spend money you haven't even earned yet. This is a trap many people fall into, and one different communities have built social defenses against.

One of the more surprisingly successful approaches is the Financial Peace (Ramsey) system, popular in evangelical Christian communities. It has a series of rules, most prominently the seven baby steps:

Save $1,000 for your starter emergency fund.
Pay off all debt (except the house) using the debt snowball.
Save 3–6 months of expenses in a fully funded emergency fund.
Invest 15% of your household income in retirement.
Save for your children's college fund.
Pay off your home early.
Build wealth and give.

There are many more specific rules, however, such as:

As a general rule of thumb, the total value of your vehicles (anything with a motor in it) should never be more than half of your annual household income.

I [...]

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First published:
March 11th, 2026

Source:
https://www.lesswrong.com/posts/XsC49gCDNGTNu6Qfn/conflicted-on-ramsey

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Narrated by TYPE III AUDIO.

“Conflicted on Ramsey” by jefftk

LessWrong (30+ Karma)