Dave Ramsey has built his reputation as one of America’s most trusted financial advisors by challenging conventional spending wisdom. His straightforward approach to money management has helped millions break free from debt and build lasting wealth.
Understanding what he refuses to spend money on reveals the core principles that guide his financial philosophy. These four spending categories represent more than personal preferences—they embody fundamental truths about building and maintaining wealth.
1. Cheap, Low-Quality Items That Won’t Last
One thing Dave Ramsey refuses to spend money on is cheap, poorly made products. During an episode of “Smart Money Happy Hour,” Ramsey explained that he won’t buy inexpensive items that aren’t going to last, preferring to spend double the amount on one quality product rather than five inferior versions.
This philosophy stems from observing wealthy individuals and their spending patterns. Ramsey learned that truly affluent people prioritize getting something of high quality that will last—potentially even for generations. This approach challenges the common misconception that frugality means always choosing the cheapest option.
The financial mathematics behind this principle is straightforward. When you purchase a low-quality item that breaks or wears out quickly, you spend more money over time replacing it repeatedly. A quality product might cost more upfront, but its longevity means lower total cost of ownership.
Ramsey’s Amazon purchase history is incredibly light because he avoids spending on trivial items that bring little value to his life. When he does make purchases, he does so purposefully. His approach demonstrates that intentional spending on quality items aligns perfectly with building wealth rather than contradicting it.
2. Timeshares
Dave Ramsey is famously outspoken about timeshares, calling them one of the worst financial traps for middle-class families. He describes timeshares as “just another way to get people to buy things they can’t afford” and considers them a “real estate trap.”
The primary issue with timeshares is that you don’t own the property outright. Unlike purchasing a home that might appreciate over time, a timeshare represents the option to use a property rather than actual ownership. This distinction is critical when evaluating whether a timeshare makes financial sense.
Beyond the initial purchase price, timeshares come with ongoing financial obligations that many buyers don’t fully appreciate until they’re locked in. Annual maintenance fees typically increase year after year, creating a perpetual expense that’s difficult to escape. Special assessments for property improvements add unexpected costs, and utilities remain the owner’s responsibility whether they use the timeshare.
The challenge of exiting a timeshare further illustrates why Ramsey considers them poor financial decisions. An entire industry exists solely to help people escape timeshare contracts, precisely because timeshares are notoriously difficult to sell or rent out. Many timeshare companies don’t even allow owners to rent their weeks, and those that do typically restrict rentals to specific entitled weeks.
Financing a timeshare means paying interest on an expensive purchase, compounding the financial burden and locking families into long-term commitments for vacation properties they may not want to use consistently. Ramsey’s alternative approach emphasizes financial flexibility and actual ownership, suggesting families save and pay cash for diverse vacation experiences instead.
3. Extended Warranties
Another category in which Dave Ramsey firmly refuses to spend his money is extended warranties. He considers these products overpriced insurance that rarely provides value to consumers while generating substantial profits for retailers and manufacturers.
Ramsey points out that companies selling extended warranties have done the math carefully. They typically structure these warranties to end before most parts are likely to break, ensuring profitability while minimizing customers’ likelihood of using the coverage.
Coverage limitations present another problem. Even when something goes wrong, owners often discover that the warranty doesn’t cover the issue. The limited scope means the money paid for the warranty doesn’t provide the protection buyers expected.
The markup on extended warranties is substantial, representing pure profit for companies and commissions for salespeople. When you consider buying extended warranties for multiple purchases—appliances, electronics, vehicles—the costs quickly accumulate. This money could be better directed toward other financial goals.
Instead of purchasing extended warranties, Ramsey advocates for self-insurance through building a robust emergency fund. He consistently recommends maintaining an emergency fund worth three to six months of expenses.
This approach protects against unexpected repair costs while offering flexibility to use the money for other needs if those repairs never materialize. An emergency fund covers more than just potential product failures—it protects against job loss, medical emergencies, and other unexpected expenses that extended warranties can’t address.
4. Impulse Purchases and Trivial Items
The fourth category Dave Ramsey refuses to spend money on encompasses impulse purchases and items that add minimal value to life. This spending discipline separates those who build wealth from those who struggle financially despite earning decent incomes.
Ramsey takes a simple wait-and-see approach to purchasing. If something is expensive relative to his life and financial situation, he spends adequate time thinking about it rather than making impulsive decisions. This deliberate pause allows emotions to settle and provides space for rational evaluation of whether the purchase genuinely serves his goals and values.
The key to this philosophy isn’t about deprivation or never enjoying your money. Instead, it’s about being intentional with every dollar. When Ramsey does spend on something significant, it’s a purposeful decision aligned with his values and long-term objectives. He shared a story of purchasing an expensive gold watch after receiving a substantial check from his book deal—but this was a deliberate celebration of a significant achievement, not a mindless impulse.
This intentional approach requires understanding the difference between wants and needs, between purchases that add genuine value to life and those that provide only fleeting satisfaction. The discipline of avoiding trivial purchases and impulse buying frees up resources for investments, experiences, and items that create lasting value.
Conclusion
Dave Ramsey’s refusal to spend money on these four categories reveals a consistent philosophy: be intentional with your money, prioritize quality over quantity, avoid financial traps disguised as good deals, and resist the temptation of impulse spending. These principles aren’t about being cheap or depriving yourself of life’s pleasures. Instead, they’re about making thoughtful decisions that support long-term financial freedom.
His approach acknowledges that winning with money isn’t about perfection—it’s about being intentional and making choices that serve your future rather than just your present desires.
By avoiding cheap items that won’t last, avoiding timeshares and extended warranties, and resisting impulse purchases, Ramsey demonstrates that building wealth often means saying no to things that seem normal in consumer culture.
These decisions, repeated consistently over time, create the foundation for lasting financial security and the freedom to spend purposefully on what genuinely matters.