Dave Ramsey says: Build emergency fund, turn down home warranty
Are home warranties a waste of money if someone has been following your plan and already has six months of expenses set aside in an emergency fund, plus home insurance?
Home warranties are a waste of money even if you don’t have quite that much set aside in an emergency fund.
I recommend an emergency fund of three to six months of expenses to cover the unexpected things that life will throw at you.
This amount of cash, sitting in a good money market account with check writing privileges, will give you easy access in the event of a financial emergency.
I don’t recommend extended warranties of any kind.
They’re just not a good deal. You’re better off to self-insure against things breaking down, and putting what would have been profit and marketing dollars for the extended warranty company in your own pocket!
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