You’ve probably heard Dave Ramsey endorsing PerkStreet Financial on his hit radio show. He focuses in on the benefit of getting 2% cash back using your debit card. Indeed, using your own hard-earned money instead of credit cards is great — especially since PerkStreet’s rewards are competitive with that of credit cards!

Personally, I’ve been using cash back as my perks choice because I feel it gives me a better value than music or coffee cards. I can throw my cash back at any of the current goals I have, and it feels great to accelerate Dave’s program!

The Question:

A question inevitably comes up when one is introduced to PerkStreet by Dave Ramsey: How would Dave use his perks if he were in our situations?

To answer this question, it is best to look at Dave Ramsey’s 7 Baby Steps and determine where each of us are at individually in our financial plans. PerkStreet pays rewards in gift cards, but it’s easy to pay for something else (like groceries) with a gift card you earn and put the cash equivalent toward your Baby Step. To dig in, let’s consider some of the major goals Dave talks about in his book The Total Money Makeover:

• Getting out of debt (Baby Steps 2 and 6). If you’re currently working on your debt – mortgage or not – Dave might advise to use your cash back perks toward the principal of your debts. You’ll save interest and since the average American family could earn $600 cash back per year by switching to PerkStreet, that will certainly help you blast through your debt.
• Building your emergency fund (Baby Steps 1 and 3). Life is full of emergencies. If you’re currently working on this goal, Dave might advise getting gazelle intense and using the cash back perks to save up 3 to 6 months worth of expenses in an emergency fund.
• Saving for retirement (Baby Step 4). Getting out of debt and building your emergency fund are only the beginning. If you’re trying to save some money for retirement, cash back perks can really help. Dave might advise you to use your cash back perks to help you reach the goal of contributing 15% of your gross income into retirement.
• Saving for college (Baby Step 5). Every cash back perk helps, and Dave might throw his extra money towards college education for the kids or for himself. If you’re striving toward this goal, don’t forget how important college education with a purpose is. The return on investment is high and shouldn’t be underestimated.
• Building wealth and giving (Baby Step 7). So far, Dave would probably have recommended using cash back perks. But what about this last step? It’s easy enough to donate a gift card to a charitable organization, but do you think he’d say it was okay to use them on music or coffee perks? I think he’d go for it. But I want to hear from you, the readers.

Your Opinion?

It’s pretty tough to guess what perks Dave would advise for each of his steps. The best I can do is gather the information available to me and draw conclusions. Perhaps you have a different opinion of how Dave would use his PerkStreet perks if he was in your shoes. Maybe you think that limiting entertainment or fun categories to only what you can earn from perks is a good idea. What do you think Dave would advise? We want to hear from you in the comments!

John Frainee is the webmaster and a writer for the ever-growing blog, The Christian Dollar. John enjoys exploring how faith and finance interact, spending time with his wife and family, and meeting readers from all over the web. He has a Bachelor of Science degree in Bible and Christian Counseling and loves encouraging others in their financial pursuits. You can also find him on Facebook and Twitter.

Interested in a guest column on the PerkStreet Blog like John has? Email the editor at kyle.psaty[at]perkstreet[dot]com

Dave Ramsey recommends the PerkStreet Financial debit card, and he’s pretty much the best personal financial guru around. What more do you need to apply for an account? It only takes 5 minutes!