Dave Ramsey Warns About Habit That Could Derail Retirement

Building financial security as a retiree is critical, as the last thing you want to do as a senior is worry about whether you'll have the money to cover the bills or pay for a doctor's visit.

Unfortunately, becoming financially secure can be more complicated than you'd think. That's because you not only need to do the right thing when it comes to growing your nest egg. You also have to avoid mistakes that could shrink it and leave you vulnerable to running short of funds.

To make sure you aren't making errors that make your senior years harder, you should avoid this dangerous money habit that financial guru Dave Ramsey says could derail your efforts at a comfortable retirement.

Image source: Getty Images.

Dave Ramsey says avoiding this dangerous habit is critical to retirement security

Ramsey's key advice if you want to be a financially secure senior is to avoid falling into debt -- and especially to avoid staying in debt over the long term and into retirement.

"You can't have a $750 F-150 payment," he said, after commenting that far too many people end up carrying debt into retirement. "You can't have a student loan that's been around so long you think it's a pet."

Ramsey has long been a famous advocate for staying debt-free, including avoiding using credit cards under any circumstances and even going so far as to suggest that you shouldn't care about your credit score because earning a good score necessitates having debt, and some mortgage lenders will do traditional underwriting, so you shouldn't really need good credit.

Ramsey also made it clear he doesn't believe that inflation is a good excuse for being in debt, stating: "Let's be real clear here -- the debt is not because of inflation. The debt is because you wussed out and refused to cut your freaking lifestyle to offset inflation, because you're still sitting in a line of 30 cars to buy an unbelievably expensive cup of coffee."

Rather than engaging in this type of spending and living above your means, Ramsey urges careful budgeting and paying for everything with cash because he believes debt is the single biggest obstacle to building wealth and will leave you with too little money for retirement because you're sending it all to your lenders.

How to avoid ending up a retiree in debt

If you want to follow Ramsey's advice and avoid debt so you don't derail your retirement, there are a few key things that you should do.

First, as Ramsey suggests, you should aim to live on a budget. That will help you to avoid running up so much debt that you can't pay it back before you start collecting Social Security checks.

Having an emergency fund can also help you to avoid falling into the kind of debt that could derail your retirement planning efforts. Unexpected expenses are an inevitable part of life, and if you are prepared for them, you won't have to take out loans that make them more expensive due to interest costs or that leave you struggling to live within your means later, since so much of your income is tied up in monthly payments.

Avoiding borrowing for things like expensive cars is another key suggestion from Ramsey, and he's absolutely right on that. While you need transportation, you don't need to always drive a new car that you finance when you could drive a cheaper used car for as long as possible and put some of the money you save on auto payments into your 401(k).

While these tips can help, the key is for everyone to find their own way to avoid falling into the bad habit of being in debt -- because as Ramsey has made clear, this habit can derail your efforts at creating the secure retirement that you deserve.

The Motley Fool has a disclosure policy.