Everyday Spending Habits Costing You Money, as per Dave Ramsey's Assessment
Dave Ramsey, a renowned financial expert, has built a career on helping people achieve financial freedom. However, his teachings and practices may sometimes contradict some of his everyday money habits. Here are ten habits that Ramsey advises against, as they go against the core principles of his financial philosophy.
- Buying a boat without cash and while in debt: Boats come with ongoing expenses, which can strain a budget already stretched thin by debt. Ramsey advises saving up for such purchases before making them.
- Leasing a car instead of paying cash: Leases often benefit dealers more than the consumer, and they never build ownership equity. Ramsey encourages buying a car with cash whenever possible.
- Upgrading to expensive cell phones without having the money saved: Ramsey advocates for saving up for big purchases and avoiding debt. Upgrading to expensive cell phones without sufficient savings can lead to financial strain.
- Taking vacations before paying off consumer debt: Ramsey suggests deferring vacation spending until debt-free and saving specifically for the trip.
- Purchasing timeshares: Timeshares are costly, non-investment purchases with ongoing fees. Ramsey advises against such purchases.
- Buying extended warranties: Extended warranties rarely pay off and add to expenses. Ramsey suggests being mindful of unnecessary costs.
- Not waiting 72 hours before big purchases: Impulse spending can lead to financial trouble. Waiting 72 hours before making big purchases can help prevent such spending.
- Frequent spending on restaurant meals and takeout food: Eating out often can drain funds that could be used for saving or paying off debt. Cooking at home can help save money.
- Overspending on new cars and monthly car payments: Expensive cars and high monthly payments can strain a budget. Ramsey advises buying used cars and paying cash.
- Purchasing brand-name or trendy items unnecessarily: These items can drain funds without providing a significant return on investment. Ramsey encourages focusing on needs rather than wants.
Ramsey's financial philosophy emphasizes intentionality, planning, and budgeting. He is a strong advocate for living within a budget, paying cash for purchases, building emergency savings, and avoiding debt. His famous quote, "A budget is telling your money where to go instead of wondering where it went," encapsulates this philosophy. Ramsey's principle, "debt is dumb, cash is king," directly addresses credit usage for non-essential items. By avoiding these money-wasting habits, individuals can align their spending habits with Ramsey's overall message of disciplined spending and debt avoidance.
[1] Ramsey, D. (n.d.). The Total Money Makeover. Thomas Nelson. [2] Ramsey, D. (n.d.). Financial Peace University. Ramsey Solutions. [3] Ramsey, D. (n.d.). The Baby Steps. Ramsey Solutions. [4] Ramsey, D. (n.d.). Smart Money Smart Kids. Thomas Nelson.
- Instead of using credit to purchase brand-name or trendy items, Ramsey advises focusing on needs over wants, aligning with his philosophy of disciplined spending.
- Rather than upgrading to expensive cellphones without having sufficient saved funds, Ramsey encourages saving up for big purchases and avoiding debt, following his philosophy of intentionality and budgeting.
