Dave Ramsey Just Shared His Top 10 Money Traps To Avoid — and You’ve Probably Fallen for Most of Them

Nicole Spector Thu, June 8, 2023

Personal finance guru Dave Ramsey is famous for his no-nonsense, tough-love insights. Not everyone agrees with him, but many of his hard-and-fast rules exist for good reason: to help people avoid losing or wasting money that could serve them in retirement. Are you paying heed to his wisdom? Here’s a look at 10 money traps to avoid, according to Dave Ramsey.

Payday Loans

Payday loans are advances on your next paycheck that people may take out when they’re running low on cash and can’t wait — or don’t want to wait until said paycheck arrives. It’s best to avoid these loans, convenient though they may be.

“Payday loans are a slippery slope into a debt-building cycle that isn’t easy to escape,” reads a post on the Ramsey Solutions website.

Whole Life Insurance

Whole-life insurance is the most common type of permanent life insurance, according to the Insurance Information Institute. It remains in effect as long as the insured individual continues paying their premiums, offering a specified death benefit and dividends on the savings portion of the policy. And according to Dave Ramsey, it’s terrible.

“We don’t want you to get ripped off, we do want to see your family well protected, and we for sure want your financial future to include wealth and the chance to become self-insured,” reads Ramsey Solutions blog post. “The only kind of policy that lets you hit all those goals is term life. But whole life misses the mark in every department.”

Debt Consolidation Loans

When steeped in high interest debt, consumers may opt for a debt consolidation loan. With this maneuver, a person combines several high-interest debts into one loan with a fixed monthly payment. Though they have proven to be helpful for many, Ramsey is staunchly against them.

In response to a reader of New Castle News in 2022, Ramsey shared the following:

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