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 Dave Ramsey is America's trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com. |
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Skip home warranties if you have a solid emergency fund. Save your money and self-insure against damages or breakdowns. Put the Money in Your Own Pocket Dear Dave, Are home warranties a waste of money if you already have a fully-funded emergency fund containing six months, or even more, of expenses set aside? Jodie Dear Jodie, I don’t do extended warranties, because they’re not a good deal. In my mind, you’re better off to self-insure against damage or things breaking down. That way, you can put what would have been profit and marketing dollars for the extended warranty company in your own pocket. I mean, think about it. If you buy something, but can’t afford to fix it if something goes wrong, it’s not really a smart move to buy it in the first place, is it? I always recommend an emergency fund of three to six months of expenses to cover the unexpected things that life will throw at you. In most cases, this amount of cash—sitting in a good money market account with check writing privileges—will allow you easy access in the event of unexpected expenses or a financial emergency. - Dave |
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