‘The American way’: Dave Ramsey says this is a big reason you’re broke — but there’s a quick and easy fix

Stop wasting your money

Ramsey’s post may not tell the whole story. As one X user argued, “The s— in my garage isn't the reason I'm broke ... its the massive housing costs, food costs, and healthcare costs. Making more money than ever but having less and less at the end of the month.”

However, the financial guru does have a point about Americans accumulating things they don’t need.

Take his storage unit example. On average, storage units cost between $90 and $290 per month, according to a Consumer Affairs report. That equates to a total cost of $1,080 to $3,480 a year to store your spare stuff, which is a significant financial burden. You could probably cover a month’s rent or mortgage payment with that cash.

In a 2021 survey, nearly 40% of Americans said they were self storage users, including past, present and future intention to use this service. The most common items put in self storage were furniture, clothing, and home appliances and equipment.

One X user who responded to Ramsey wrote: “It amazes me people pay rent month after month for stuff in storage units they might need ‘someday.’ They'd be better off selling everything and saving the rent money to buy what they actually need when they actually need it. How many times over do they pay for that stuff?”

If you’re not spending thousands on a storage unit, you probably still have financial fat to trim in other areas of your life.

For instance, lots of families have a spare car that sits on the driveway 365 days a year, but they still pay to register that car in case they need to use it.

Vehicle registration fees range in cost from $9.50 to $225 a year, depending on the state, according to WiseVoter. At the top end, if you keep a car for five years but barely drive it, you’ll be paying $1,125 to watch your vehicle gather dust. Not to mention, you may also need to pay for insurance coverage. That is money that could be better spent elsewhere.

Another X user who responded to Ramsey pointed out that a lot of people also have swimming pools in their backyards that they rarely use.

Pool maintenance costs $80 to $150 monthly or about $960 to $1,800 yearly, according to HomeGuide. But the annual cost to own a pool — including maintenance, repairs, electricity and water — is much higher at $3,000 to $6,000. That’s a huge price to pay for something you might only swim in once or twice a year.

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How to trim your financial fat

Ramsey suggests Americans can “clear out the clutter” by partaking in “one or two good garage sales and some online sales.”

A garage sale won’t run itself. A successful sale requires planning, preparation and strong execution. You have to think about details like your competition, what date you’re going to run your sale, how you’re going to advertise, what refreshments you’re going to offer and how to showcase items with the highest earning potential.

If you get it right, you can earn a nice pile of cash that you can use to “get … out of debt,” according to Ramsey, but it’s quite hard work.

The online sales route is easier, but there is one thing you need to keep in mind. If you plan to use online marketplaces (like eBay and Poshmark) and payment apps (like PayPal, Square and CashApp) to sell your unwanted items, try to get into the habit of strong record keeping — storing original receipts and taking note of how much you sold items for, any fees you paid to the online marketplace, as well as any shipping costs and bank fees.

The IRS is cracking down on casual sellers by reducing the income thresholds for 1099-K forms. In the 2024 tax year, you could receive a 1099-K if you earn more than $4,000 from online sales, and in the 2025 tax year, the 1099-K threshold is expected to drop to just $600. Keeping proper records will help you comply with the tax law — and importantly, ensure that you’re not overpaying Uncle Sam.

It’s not as easy to ditch bigger assets like a car or a swimming pool — and it might not always make sense to try and sell or get rid of them.

A full pool demolition is very expensive. It could cost anywhere from $4,000 to $16,000, according to Angi.

As for your spare car, remember it has been depreciating in value as it sits on your driveway. According to Ramsey, a brand-new car loses about 11% of its value the moment you drive off the lot, and within five years it will have lost around 60% of its value. At that point, you may not get the price tag you want for your used car.

But all is not lost. There are many ways today, with the help of online tools and apps, to rent out your car, your private swimming pool, a spare room and even your clothes. This is a great way to generate passive income from your unused assets, so that they at least pay for themselves — but ideally, they’ll make you a profit.