Dear Dave,
I switched to a debit card so that the money I spend comes directly from my checking account. But I still have a problem some months with overspending and buying things I shouldn’t. Do you think I should stop using my debit card?
Debbie
Dear Debbie,
When I made the decision to get intentional with my money, I just used cash. It’s hard to spend it when you don’t have any on you. It’s a tough thing, I know, but you have to make a conscious decision to start living differently. You’ve got to get mad at the things that steal your money a dollar or two at a time enough to take action.
Try looking at your life as a whole, not a moment at time. All the moments you’re living right now will have either a positive or negative effect on your future. I decided I wanted the greater, long-term good, so I gave up on the short-term stuff.
Debit cards are great tools. You can’t spend money you don’t have with them like you can with a credit card. But you’ve still got to budget very carefully for each month, and give a name and a job to every single penny of your income. Otherwise, you can still overspend.
— Dave
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
Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.
