Dave Ramsey’s, “The Total Money Makeover” is the best book I’ve read in a long time and I want to tell you why. In case you don’t know who Dave Ramsey is, he is a money management expert and he has four NYT bestsellers out right now that you can purchase on Amazon and they’re all about money and budgeting and achieving financial peace and wealth. He also has his own show on YouTube where you can even call in during his live shows to get advice directly from him.
One thing you should know about me is that I am REALLY into that whole self-improvement and self-empowerment thing. With that being said, I have read tons of books that fall under these topics. People like Tony Robbins, Jen Sincero, Robert Kiyosaki, Stephen Covey, and Steven Pressfield all have a special place on my bookshelf. These people have a lot to do with who I am today.
However, when I read the Total Money Makeover, my life and perspective on money and budgeting and finances literally changed like THAT (snaps fingers).
When I read Tony Robbins’ books, he definitely made me think. A LOT. I did all of the exercises in his books and I thoroughly enjoy his way of teaching. But, when I finished Tony’s books, I still felt like I had a lot of thinking to do and a lot of reflecting and like I needed to read his books again and again (which I have done.) But Dave Ramsey’s book was a completely different story. I read this book in 3 days and closed it and was like…
“THIS IS IT. WE ARE ON THE ROAD TO ACHIEVING WEALTH!”
The way he writes and teaches is so simple and easy to follow.
One of the main reasons I really appreciate Dave Ramsey is because I love his style of coaching. Dave Ramsey = NO BULLSHIT. He tells you exactly how it is and what you need to do to change. This style of his resonated with me and how I think and feel about most things in life.
So, when it comes to money and finances, if you are NOT someone who is hard on yourself and unafraid to admit that you need to change, I have news for you…YOU HAVE TO BE. You HAVE to become someone who self reflects and admits your flaws and your ignorance and tackles self-improvement head-on. If you are wishy-washy and you lose sight of your goals, you are not going to be someone who can take the life you imagine and make it a reality. Bottom line.
When I am reading Dave’s book, I am thinking a lot about David Goggins (who also wrote one of the best books I’ve ever read) because he is also a HARD mother F’er! David Goggins’ overall message to people is something along the lines of, “If you want to see changes in your life, you need to do the friggin work to get there.” He gets me fired up. P.S. I wrote a post about David Goggins that you can check out here. He’s an amazing human being.
So, when it comes to finances, NO ONE is going to cradle you with kid gloves and take care of your situation for you. If you are waiting for that person to come along or you’re waiting to win the lottery, that’s not going to happen. The chances of you reading Total Money Makeover and incorporating Dave’s 7 Baby Steps and achieving wealth are so much higher than you buying a lottery ticket and winning and being set for life.
So, I really encourage you to buy his book and read it if you are ready to sit down and admit the mistakes and ignorance and even the lack of education you have around money and finances. If you are ready to look that in the face and walk down the painful but rewarding road to financial freedom, then you need to buy this book and hop on this train with me.
The way Dave teaches you to achieve wealth is to follow his PROVEN 7 Baby Steps:
1. Save $1000 cash
2. Start debt snowball
3. Finish emergency fund (adding to the $1000 from Step 1)
4. Invest 15% total income in retirement
5. Save for kids college
6. Pay off mortgage
7. Build wealth
Step 1: Save $1000 cash.
THIS IS WAY EASIER THAN IT SOUNDS. Think about the money you spend on a monthly basis on complete bullshit that you really don’t need. If you started saving money and stopped buying useless items, you would save $1000 fast! The idea here is to put this money in an envelope, taped up for emergencies in the event that something small happens where you can pay cash so it doesn’t screw you up on your journey to becoming debt-free. So start saving as soon as possible!
Step 2: Start the Debt Snowball.
THIS HAS BEEN SO FUN FOR US. The idea behind the debt snowball is to list your debts from smallest to largest and to start paying off your smallest debt first. Dave recommends this because experiencing those quick small wins will motivate you to continue to keep paying off the next debt. I already paid off my car by the way. Click here to watch my YouTube video about that.
SO FOR EXAMPLE:
Pretend that your smallest deb is your car which has a monthly payment of $300. Take this debt and do everything you can to pay this off ASAP. Once you stop spending money on useless items and you’ve saved $1000 (baby step 1) you are then going to try and pay more than the $300 minimum payment for your car until that is paid off.
Once your smallest debt is paid off (CONGRATS BY THE WAY), you will then take that total amount and add it to the next debt. So, in this example, this person would take the $300/mo (or more if they were adding more to that) and add that on to the next debt.
SO, if the next debt is ANOTHER car payment (for a spouse or someone else in the family) and this person has been paying $400/mo, they will now be paying $700/mo toward their car because you’ve added the $300 extra you now have each month from paying the first car off. Get it?
This method will help you spend down your debts WAY FASTER!
KEEP GOING. Now take the $700 extra after the second vehicle is paid off and add it to the next debt until you are debt free!! WOOOO!
Baby Step 3: Finish Emergency Fund.
By this step, all of your debts (aside from your mortgage) are paid off! (WHAAAAAAT?) This means you could have an extra few thousand dollars at the end of each month that you were previously putting into all of your debts!
You are now going to take this money and squirrel it away for your CASH EMERGENCY FUND. This emergency fund needs to be 3-6 months total of all your expenses. This is usually around $15k-$25k in cash. The purpose of this emergency fund is to save you in the event that something happens.
Maybe you get pregnant (congrats, again). Maybe you lose your job. This fund is to save your ass so you don’t have to use a credit card or borrow money. As a matter of fact, pay your credit cards off and don’t use them again! Stop spending money you don’t have. Dave Ramsey says to basically cut your credit cards up and throw them in the trash. In his book, he talks about the myths around credit and it is extremely eye-opening!
Baby Step 4: Invest 15% of Gross Income in Retirement.
By this time, you have paid off all of your debts except for your mortgage. You have your 3-6 months cash hiding somewhere wherever you like to hide your money so now at this point, it should be super easy for you to put 15% of your income toward retirement.
Baby Step 5: Save For Kids College.
NO ONE DOES THIS AND YOU NEED TO. Dave talks about the importance of starting to save for this ASAP. In his book, he says, if you have an 8-year-old child and you start to invest in his/her college education through an ESA (Educational Savings Account), and you are putting in $160/mo, your child will be able to go to almost any college he/she wants and you won’t have to fork over money you don’t have!
Baby Step 6: PAY OFF MORTGAGE!
I cannot wait to get to this baby step. I want to be able to walk into Dave’s office and say, “YO DAVE! We did it! We are debt-free!!!”
When you read Dave’s book, it is full of success stories. There’s one example of a couple who makes around $70,000/year and they were $120,000 in debt. They read Dave’s book and within 6 years, they completed this entire process and now they are on the road to achieving wealth and living the life they want. They literally don’t have any more debt.
Baby step 7: Build Wealth.
THIS IS THE REASON YOU BEGAN THIS PROCESS. This is the reason you read this book. Building wealth is what is going to allow you to continue to live the life you want for yourself and your family. When you are building wealth, you are:
INVESTING your money
ENJOYING your money.
GIVING your money.
GIVING. This is one of the most important things that Dave believes in and he encourages a lot of people to give. He says, what is the fun of having all this money if you don’t help people with it? In his book, he gives an example of his daughter’s friend whose father passed away, leaving money REALLY tight in her family. She wasn’t going to be able to go back to college. Dave and his wife talked and decided to pay this girl’s tuition because it was the least they could do and well, because, they had the money and wanted to change a life.
So that’s my review. I am 100% IN and so passionate about this process. I am glad I started with Dave and I cannot thank him enough. I hope I can thank him in person one day. We are still on baby step 2 and this process gets me FIRED UP every single day.
Leave me a comment below with any questions, comments, or experiences you’d like to share.
START your debt-free journey today!