Personal finance expert, author and host of The Ramsey Show, Dave Ramsey often provides guidance on topics like budgeting, paying off debt and building wealth.<\/p>\n
One area in which he frequently berates callers on his show? Wasting money<\/a>. Here are five of the scariest ways to waste money, according to Ramsey<\/a>.<\/p>\n It\u2019s often said that, when it comes to wealth building, it\u2019s not about how much you earn; it\u2019s about how much you keep. And failing to plan means planning to fail.<\/p>\n Overspending and neglecting savings goals are bound to ensue without a clear picture of your finances. And mental tallies don\u2019t provide the same level of accountability as physically putting pen to paper. Avoid wasteful spending by taking control.<\/p>\n \u201cA written budget<\/a> when you will lay it out and stick to it, will give you the sense you got a raise,\u201d stated Ramsey on \u201cThe Ramsey Show Highlights: You NEED A Written Budget<\/a>.\u201d \u201cYour money is so stinking out of control when it\u2019s not in control.\u201d<\/p>\n Read More: 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses<\/a><\/p>\n Consider This: 6 Things You Must Do When Your Savings Reach $50,000<\/a><\/p>\n According to a video posted to Dave Ramsey\u2019s official TikTok<\/a>, people need to stop spending money they don\u2019t have to impress people they don\u2019t like.<\/p>\n While Ramsey admit he was once the guy who spent an unbelievable amount of money on a car \u201cto impress somebody at a stop light you will never be introduced to,\u201d he no longer caves to social pressure \u2014 especially since he went bankrupt in the process.<\/p>\n Keep your eyes on your own paper and, instead, invest in yourself: Put the money you would have spent in your savings or 401(k) plan.<\/p>\n Ramsey argues that credit cards, auto loans and student loans are all gigantic wastes of money. This is because of all the extra interest consumers wind up paying over the long-run if and when the balances aren\u2019t paid off in a timely manner.<\/p>\n The longtime money expert advocates debit cards over credit cards, pulling from your emergency fund<\/a> or savings account to make large purchases or simply avoiding items you can\u2019t afford to buy outright.<\/p>\n \u201cDon\u2019t finance anything,\u201d stated Ramsey in another highlights video<\/a>. \u201cRich people ask \u2018How much?\u2019 Broke people ask [\u2026] \u2018How much down\u2019 and \u2018How much a month?’\u201d<\/p>\n Ramsey argues that when it comes to whole life insurance versus term life insurance, whole life insurance is almost always a waste of money. Not only is whole life insurance much more expensive than term life insurance, but, when it comes to its investment component, \u201c100% of the time it sucks,\u201d making all that extra money spent on whole life insurance not worth it.<\/p>\n \u201cLife insurance products that give you the opportunity to pay 20 times more than you would pay for term insurance in order that you create an investment inside of the policy are basically the payday lender of the middle class,\u201d stated Ramsey on in a highlights video<\/a>.<\/p>\n Some discretionary spending is expected, but problems arise when that spending goes unchecked. Daily coffee runs<\/a>, expensive restaurants and impulse purchases drain your wallet quickly and silently. They may seem like tiny expenses in the moment, but, according to Ramsey, they all add up.<\/p>\n What\u2019s more, when it comes to daily Starbucks runs, Ramsey and guest, George Kamel, discuss on \u201cThe Ramsey Show Highlights: Starbucks Hacks Dave Ramsey Didn\u2019t Know He Needed<\/a>,\u201d that consumers often pay $8 for a drink without much coffee in it. Some Starbucks menu items are primarily sugar and water. Consumers waste money on coffee with minimal coffee when they could brew actual coffee at home. (And save upwards of $224 a month).<\/p>\n When it comes to eating out, Ramsey stated, \u201cIf you want to spend one-fourth of what you do at the restaurant, you will [\u2026] learn to cook at home.\u201d<\/p>\n Robert Johnson, chairman and CEO at Economic Index Associates<\/a>, offered an important caveat when it comes to Ramsey\u2019s advice: One person\u2019s wasteful spending<\/a> is another person\u2019s smart spending.<\/p>\n \u201cBlanket advice on what purchases are smart or problematic is misguided,\u201d stated Johnson.<\/p>\n That\u2019s because of what economists refer to as \u201cutility theory,\u201d or the idea that different individuals can get a different level of utility from the same purchase.<\/p>\n \u201cFor some people, their daily coffee purchases may come with camaraderie; with others, there may be a social component,\u201d according to Johnson.<\/p>\n At the end of the day, Ramsey\u2019s advice on wasteful spending is thoughtful and informed \u2014 but not necessarily applicable to every individual.<\/p>\n More From GOBankingRates<\/p>\n This article originally appeared on GOBankingRates.com<\/a>: Dave Ramsey: These Are the 5 Scariest Ways To Waste Your Money<\/a><\/p>\n