Over the past few months, I’ve noticed that The Total Money Makeover by Dave Ramsey has been steadily in the top ten in the business books category. Usually I am skeptical about finance self-help books because they usually don’t say anything I don’t already know or is common sense, but I decided to check it out. I got the book and read it over the course of a few nights after work. I was pretty surprised about the easy read and although he doesn’t really go into detail about types of savings accounts and types of investments, he does point you out in the right direction in case you do not have much knowledge about particular topics.
What Is The Total Money Makeover?
Dave Ramsey’s mantra is “If you live like no one else, later you can live like no one else.” Without giving the book away, he advises you to live below your means and battles some money and debt myths. After he changes your mind about some common money mistakes people tend to make (myself included), he challenges you to follow some “baby steps” in order to rid yourself of debt and start building wealth instead.
What I like about the book is that it is not a get rich quick scheme. He plainly discusses that anyone with any amount of income can follow the plan and work their way into being debt free. Obviously, the more income and the less debt you have, the faster the process will be. But if you stick with the plan, you will see yourself free from debt someday and worth more than you think.
Although the book is geared towards the vast majority of Americans who aren’t very good at money management, I found Ramsey’s plan detailed in the book to be useful. The only criticisms I have are related to discipline. Ramsey says that you should never use credit cards and start with an emergency fund of only $1000. I believe that if you are disciplined enough to pay your entire balance every month, then it is OK to use credit cards. As long as you are treating the card as only an extension of the cash you actually have available. Especially since the cost of their use is already built into most retailer pricing schemes. Why not recapture some of those costs in the form of cash back or rewards?
I also think that in this day and age, $1000 is not enough of a starter emergency fund. Granted, I have forgotten when the book was originally published and don’t know if Ramsey would adjust his figures for inflation, I would start the emergency fund with one month’s worth of expenses before moving on to the next “baby step.”
After reading this book, I have re-evaluated my family financial plan and am going to go follow through with the steps Ramsey outlines with a few modifications. I am looking forward to the challenge and hope that it will develop a more disciplined consumer out of me. I highly recommend this book for everyone, no matter the level of your financial expertise. It will change your outlook on debt and how we have been accustomed to using it, even though it continues to enslave us. Join me, and the legions of people whose lives have changed by following Dave Ramsey’s Total Money Makeover plan to becoming debt free and on the road to becoming truly wealthy.
Just remember, all debt is bad debt.
Other than your mortgage, what’s your worst debt? Are you working towards paying it off so you can put your hard earned money towards earning interest for yourself instead of paying interest to the bank?