The correct answer is Option (3) → Waste
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Squander means to waste (something, especially money or time) in a reckless and foolish manner.
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Waste means to use or expend carelessly, extravagantly, or to no purpose. This is a direct synonym.
Other Options:
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Whinny: The sound made by a horse; a high, gentle, drawn-out cry. (Unrelated to spending/using).
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Binge: A period of excessive indulgence in an activity, especially drinking alcohol or eating. (While often involving waste, it refers to the act of excess indulgence, not the act of wasting itself).
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Whimsy: Playfully quaint or fanciful behavior or humor; caprice. (Unrelated to spending/using).
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