Blog Book Review: Total Money Makeover

Book Review: Total Money Makeover

If you’re looking for a true plan to follow to transform your financial situation, I would highly recommend checking out Dave Ramsey’s Total Money Makeover. It walks you through Dave’s Seven Baby Steps…a process that will make you “live like no one else, so that later you can live (and give) like no one else”, as Dave says.

total money makeover

I was given the book almost two and a half years ago, and it changed the way I think about money!

The 7 Baby Steps are as follow:

  1. Save $1,000 As A Starter Emergency Fund
  2. Use The Debt Snowball To Pay Off Your Debts
  3. Have A 3-6 Month Emergency Fund
  4. Invest 15% of Your Income For Retirement
  5. Save For Your Kid’s College
  6. Pay Off Your Home Early
  7. Build Wealth And Give

The biggest thing to know about this process is that it’s just that, a process. It takes time. The primary goal is to truly change your habits. With your newfound habits, you end up building momentum that has the power to change your financial direction.

The book contains information on everything from saving, budgeting, investing and giving. You learn how to begin a financial plan, which is huge for building confidence in any endeavor. It also has inspirational anecdotes to motivate and inspire you; stories from real people who have made the same decisions and faced the same struggles as millions of others. It’s relatable, personable and a quick read — I got hooked and finished it in less than 24 hours (it was a lazy weekend).

The one area I’m not 100% sure about is his insistence in step four that an abundance of mutual funds can be found averaging a 12% to 15% return year after year. I’ve only done a limited amount of research, but mutual funds with that type of track record weren’t exactly falling out of the sky. (And in my google searches of Dave, that’s the one area of his plan that many people tend to balk at.) So I still need to get with a financial advisor and get some professional guidance, but outside of that I fully intend to keep walking the baby step trail to lucky number seven.

One of my favorite parts of Dave’s philosophies is that it’s scripturally based. He doesn’t say that we should build up a pile of money in order to hoard it and say “look at me”. The goal is to keep our house in order and be able to give our money away to help others, but the only way to do that is to live a life with financial self-discipline, taking one baby step at a time.

I would highly recommend this book to anyone that is unsure of how to start getting out of debt or simply looking for guidance on how to successfully manage your income on a day to day and month to month basis. Check it out and let me know what you think!