Dave Ramsey says: Build emergency fund, turn down home warranty

Dear Dave,

— Andrea

Dear Andrea,

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!

— Dave

Related

Dave Ramsey says: You’re really just trading one expense for anotherDave Ramsey says: Get everything out in the openDave Ramsey says: Debt is like a ball and chain5 easy ways to save money on gas this summerDave Ramsey says: Contentment, gratitude and prioritiesDave Ramsey says: Sharing and visualizing a future together is important