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?”
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.
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As a financial expert with years of experience in the field, I have a deep understanding of various money-making and money-saving strategies. My extensive knowledge and expertise have been honed through years of research, practical application, and teaching others about personal finance.
One topic that has recently gained attention is the national daycare crisis, which was highlighted in a January episode of The Ramsey Show. During the episode, financial celebrity Dave Ramsey and his co-host Jade Warshaw seemed to be unaware of the significant challenges faced by many families when it comes to daycare costs. This lack of awareness sparked criticism from viewers on TikTok.
The discussion began when a caller sought financial advice for himself and his wife, who earn a combined income of $180,000 per year. Despite having minimal debt and being professionals, they still felt financially strained. When the topic of daycare costs arose, Ramsey expressed frustration and disbelief, asking why they couldn't make ends meet on their income. The caller explained that their childcare expenses amounted to $80,000 annually, which shocked Ramsey. He even questioned if their children were in college.
While $80,000 may seem excessive for two children, it is important to note that childcare costs can vary significantly depending on the state and region. In states like Massachusetts and New York, where the cost of living is higher, the quoted figure may not be far off from the average. In fact, in some states, infant care costs can surpass the cost of college tuition.
However, Ramsey and Warshaw's proposed solutions to the caller's daycare money problems sparked further controversy. Warshaw suggested finding cheaper alternatives and cutting back on expenses, using the analogy of serving filet mignon to children. Ramsey dismissed this idea, calling it foolish. Warshaw even mentioned the possibility of finding a free summer camp, which understandably frustrated many parents who were struggling to find affordable and safe childcare options.
The response to Ramsey's remarks was significant, with many parents expressing their disappointment and frustration. Some criticized his lack of understanding and suggested that he was out of touch with the realities faced by families. Others shared their own videos on TikTok, highlighting the difficulties of finding affordable and accessible childcare.
One working mom of four, Paige Turner, responded to Ramsey's comments point by point, shedding light on rising costs, childcare deserts, and the impact of the pandemic on the industry. She emphasized that childcare expenses are a significant burden for families with young children and that these costs are rising at a faster rate than any other expense. Turner argued that Ramsey should refrain from giving advice on topics he is not well-versed in.
While it may seem excessive to spend $80,000 on childcare for two children, it is crucial to recognize that many American families are sacrificing a significant portion of their income to ensure their children are taken care of while they work. The fact that even financial experts like Ramsey are unaware of the challenges faced by today's parents highlights the severity of the national daycare crisis.
