Dave Ramsey mentions that insurance is the defense for managing your money. Why is this true?

Answer:

Insurance is considered the defense for managing your money because it protects your financial well-being by reducing risk and covering unexpected, costly events—like accidents, illnesses, or disasters—that could otherwise drain your savings or lead to debt.

Explanation:

Dave Ramsey emphasizes that just like in sports, a solid defense is essential. While budgeting, saving, and investing (the offense) help you build wealth, insurance is the financial safety net (the defense) that keeps you from losing everything when something goes wrong.

Without insurance:

By having the right insurance coverage (health, auto, home, life, etc.), you shield your finances from major losses and protect the progress you've made with your money.