Dave Says

Put the money in your own pocket

Picture of Dave Ramsey

Dave Ramsey

January 31, 2024

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?


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 Ramsey

Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.