![\"Dave](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/Dave-Ramsey-headshot.jpg\")
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\n \u00a9Dave Ramsey <\/p>\n
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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Remember the tale of Hansel and Gretel \u2014 the duo lured into an evil witch\u2019s cabin with the promise of candy? They learned about not falling into the trap of chasing sweet, shiny things at the expense of your common sense. As a grown-up in the real world, you\u2019re probably not chasing chocolate bars into a cauldron, but to hear Dave Ramsey tell it, you might be succumbing to some gnarly financial<\/a> traps. \u00a0<\/p>\n Ramsey is well-acquainted with some of the most common ways people waste their money through money traps and schemes \u2014 many of which give credence to the old saying that if something sounds too good to be true, it likely is. Unsurprisingly, he\u2019s got a list of things he really wants you to stop doing with your money<\/a>. \u00a0<\/p>\n<\/p>\n Getting an Adjustable-Rate Mortgage \u00a0<\/p>\n Ramsey has a lot to say about adjustable-rate mortgages (ARMs) \u2014 and none of it is good. He even calls getting an ARM \u201cplaying with fire,\u201d arguing that if your interest rate is adjustable (as in, it\u2019s not locked in forever) that means it\u2019s probably going to go up over time. \u00a0<\/p>\n On the Ramsey Solutions website<\/a>, he breaks down why ARMs are such a bad money trap: \u201cWith ARMs, you lock in a low interest rate for a short period of time, and after that, your rate can go up yearly (or every few years) at the market rate,\u201d he said. \u201cAnd if that rate is sky-high, your mortgage payments will be too \u2026 potentially leaving you unable to pay your mortgage.\u201d\u00a0<\/p>\n What should you do instead? Ramsey would much prefer that you invest in a 15-year fixed-rate mortgage, which is pretty much exactly what it sounds like \u2014 a mortgage loan that charges a consistent interest rate through the 15-year term of the loan. Since the interest rate stays the same throughout the duration of the loan, your monthly payment (sans taxes and insurance, of course) will stay the same. \u00a0<\/p>\n Going In on a Timeshare \u00a0<\/p>\n What\u2019s so bad about going in on a timeshare, anyway?\u00a0Sounds kind of nice to have a vacation property arrangement where you share the property costs with other people, while guaranteeing your family\u2019s time at the property. \u00a0<\/p>\n<\/p>\n However, Ramsey\u00a0cautions you against succumbing to the siren song of the timeshare. In a piece expressly about timeshares, he calls<\/a> them a \u201cbig, expensive headache\u201d that comes from yearly maintenance fees, incidental costs, dues and interest. And oh yeah, you\u2019ve still got the hassle of booking your vacation dates before one of your fellow timeshare owners does. \u00a0<\/p>\n Instead, plan your own vacation on your own terms. He recommends using a sinking fund to set aside money for a vacation<\/a> that you can pay for upfront. \u00a0<\/p>\n<\/p>\n Getting a Car Lease\u00a0<\/p>\n Ramsey isn\u2019t made of stone; he understands the appeal of a sleek new BMW when you\u2019re cruising down the road in an otherwise reliable but still less-than-visually appealing used car. But if you\u2019re tempted to trade in that used car and take on monthly payments for a flashier, pricier model, he warns you that you\u2019re falling into a money trap<\/a>. \u00a0<\/p>\n According to Ramsey, leasing is \u201cthe most expensive way to drive a car,\u201d because you don\u2019t actually own your car \u2014 technically, the bank or your lender does. \u201cThey just let you drive it around \u2014 as long as you make your monthly payment, that is,\u201d he said. \u00a0<\/p>\n You\u2019re better off buying a new \u2014 or even new-to-you \u2014 car outright, with cash. He encourages<\/a> you to develop a car budget while you research the right models for you. Look into factors like insurance payments and car inspections. And be sure to brush up on your negotiating skills. \u00a0<\/p>\n Using No Money Down Plans \u00a0<\/p>\n The phrase \u201cno money down\u201d may sound like music to your ears, but Ramsey warns that it can strike a sour note. He gives the example of using a no money down plan to pay for a brand-new couch. \u00a0<\/p>\n<\/p>\n \u201cLook, putting 0% down might sound like a no-brainer, but the no-money-down trap is just another way to get you locked into making long-term payments on stuff you need to pay for up front,\u201d he said. \u201cNever mind the fact that you\u2019re financing something you sit on \u2014 but now you don\u2019t actually own that couch either.\u201d\u00a0<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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