Book #14: Total Money Makeover

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Title: The Total Money Makeover
Author: Dave Ramsey
# of Pages: 223
Genre: Personal Finance

I don’t know how other couples handle their finances, but Matt and I like to talk often and openly about everything going on with our money. We like to dream, we I like to worry, and we have yet to get in a fight over anything financial (or anything, period, really–is that weird?). Overall, we’ve stayed (relatively) debt-free (if you don’t count minor credit card bills, which we pay in full every month, or small loans we occasionally get from our parents).

So, according to this book anyway, we’re ahead of many people.

But I’ve never been one to sit in the middle and be content–I want to be at the top, baby! Well, kind of. See, I actually don’t care about money as much as some people. I’ve never cared to have a big house or a fancy car. All I’ve ever really wanted is a house full of books, a big yard, and enough money to buy ice cream whenever I want it. Oh, and having a large emergency fund would be nice too.

I’ve been listening to Dave Ramsey’s show on the radio now for several months. I am all too familiar with his no-nonsense approach to debt and his general mistrust in the average American consumer. Although I raise my eyebrows at some of the things he actually says to people, I usually have to admit that he’s got a point. So I decided to give his book a shot, just for the fun of it.

The book is outlined to follow his Baby Step Plan (and show you exactly how to accomplish each step). In case you’re not familiar with his Baby Steps, they are:

1: Save $1000 fast to start a baby emergency fund (only pay the minimum on all your monthly bills, don’t save for retirement yet, do not charge anything new to any credit line whatsoever–just save $1000 as fast as you can)

2: Get rid of all your debt by using the Debt Snowball method (make a list of all of your debts except your mortgage from smallest to largest and go to extremes to pay them each off, from smallest to largest. Once you have paid off the smallest, allocate the money you would have used to pay that one onto your next smallest debt, and so forth. Dave wants you to get really intense about paying off all your debt as fast as possible–he suggests that you sell a car, work a second or third job, and/or have a garage sale in order to pay them off as quickly as possible).

3: Finish your emergency fund (Save 3-6 months’ worth of expenses. Although I should have mentioned this sooner, absolutely under no conditions are you ever to get into debt ever again after starting this makeover. You’re supposed to cut up all your credit cards, buy used cars with cash, and basically go without).

4: Put 15% of your income towards retirement (Now that you’ve only got your house payment every month and no other debt, you should have plenty of money to really start saving for retirement. This section is my favorite because I love using the retirement calculators they have.)

5: Start saving for your kids’ college education

6: Pay off the home mortgage (by using all the money you would have paid towards debt on your house payment each month)

7: Build wealth like crazy (invest, invest, invest)

8: Live like no one else (have fun, invest, and give to those in need)

Now, one thing you’ve got to know about Dave–he’s really intense. And he can kind of get under your skin sometimes with his know-it-all attitude and only-my-way-works aura. I’ll give him credit for basing his total money makeover plan on sound principles, and I’ll acknowledge that the plan (if executed with the kind of intensity he encourages) would work. It would have to.

That said, I do like how the money makeover is broken up into bite-size pieces that even the most financially unstable could manage, if they had the necessary desire and discipline to. And I do plan on following his steps–kind of. You see, Dave would tell me that I’m in denial, but the truth is that Matt and I are NOT like most average people with money–we have paid for our college educations with cash, we own both our cars, and we already are saving towards retirement. So I probably still won’t cut up my credit cards yet (not until I have at least 6 months’ worth of living expenses under my belt, that is). Dave would say that I’m set up to fail because I’m not “gazelle-intense,” as he puts it.

But I’ll get to my ice-cream-and-book-filled fantasy.

I’ll just do it my own way.

All that aside, this still is a great read, especially if you’re struggling financially. It will give you hope and a manageable plan. He also includes numerous success stories for inspiration, which were my favorite part.

So go check it out. You won’t regret it.

My Rating: 4.5 Stars

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