Dave Ramsey Total Money Makeover Review:

The Total Money Makeover:

This is the title of a book written by Dave Ramsey, who I just finished reading, and would like to share some thoughts with you. It is a well-known book, highly recommended for people who need to start the search for financial freedom.

The book developed a plan what he calls “baby steps” which is what the author recommends to anyone who wants to achieve financial freedom.

As a starting point, it recommends budgeting.

The book highlights its importance as a key issue to achieve wealth:

1. Save $ 1,000 quickly:

This money is to create an emergency fund, and emphasizes the logic that is a short-term goal, relatively easy to achieve, and certainly will cause a positive mental effect once reached. He recommends you to become creative, find new sources of income, reduce your expenses, sell something you have at home that you no longer use, etc.

2. Pay your debts:

The payments of debts to create an effect called “snowball” this is to form the amount of money you are able to pay monthly, order your debts from smallest to largest (excluding home mortgage debt and other long term debts), and as you are paying a debt off, you use that money to pay the next.

In all debts you must pay the minimum, and any money you can save on expenses or increase your income, you use it to advance your plan.

3. Complete your emergency fund:

You must have an emergency fund of three to six months of income, if you become unemployed, have an accident, or just decide to change jobs or profession.

4. Maximize your retirement fund:

Complete your emergency fund, dedicate yourself to save for retirement. He recommended to be at least 15% of your income, in special funds that exist in the United States such as (401k, Roth IRA, etc.). If you do not live in America, you could find the equivalent, as could be private pension funds, for example.

5. Saving for College:

The issue that concerns many families, as the cost of sending a child to college is quite high, especially in the US, parents and students incur an astronomical debt for an education. In many other countries getting closer and closer to this situation, because the cost of education has risen dramatically.

6. Pay the home mortgage:

In this step you dedicate yourself to pay the loan for your home as soon as possible (if you have one). The point is that the faster you pay, the less interest you will pay, and less money you will pay.

7. Create Wealth:

Once paid the debt of your home, you dedicate yourself to invest your money, to maximize your earnings. He specially recommends using mutual funds.

Into the future it is assumed that your level of expenses will increase. And the money will superfluous at each stage, you use it to advance to the next step of your plan.

The conclusion of the book is that you organize your money, and control it, or else it will control you. The book is full of testimonials from people who were in deplorable economic conditions, and have managed to get ahead, pay debts, and find “financial security”.

One aspect that emphasizes again and again, is that the debt is not a tool. That he is totally against any kind of debt even to carry a credit card. The point is that if you want something, you must pay in cash, and if you cannot, you do not deserve it.

In short, a book that proposes healthy habits for your finances, which have more hackneyed than the average resident. Exercising finances in the form proposed by Mr. Ramsey, you will soon have a financial muscle to be free of worry, stress and debt.

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10 thoughts on “Dave Ramsey Total Money Makeover Review:

  1. As always, a great post Farshid that everyone can benefit from. I particularly like the point about the emergency fund – this is something I personally do not have at this point. I have a bit of savings that I can release at short notice but I must put together an emergency fund especially as me and the wife are growing old.

    Thank you for this review!

    1. Thank you Shaz, It’s very important to have at least 6 months worth of expenses saved for an emergency. You can start with very little amount and go up from there.
      Thank you for stopping by.

  2. I love your review! I’m always skeptical about books like these, because you never know if it’s going to promise getting rich quick (but without the work), or the persistence method of attaining wealth. Great site!

    1. Precisely Gabrielle. Dave Ramsey’s book is really about how to handles your financials better and tools how to get out of debt. And creating wealth over time by making sound investments.

  3. Dave Ramsey is such an authority on financial advice. This book looks great, I’m sure it’s as great as it looks! I would very interested in the part where he talks about paying your mortgage as soon as possible. I hope he gives practical tips on that. I have no doubt he gives sound advice on everything else in the book but I would get it just for the paying off mortgage part. Create Wealth section must be an interesting read. I couldn’t agree more on his ‘no debt’ philosopher.
    Thank you for this interesting and in-depth review.

    1. I totally agree. Dave Ramsey has helped many people to get their financials in order. I truly believe everyone will benefit from reading his book!
      Thank you for stopping by.

  4. Hello Farshid,
    that you for this post. The author emphasis to reduce your debt and my professor said always: “Debt is the source of all evil”. Well, I think it contains some truth and I avoided debt my whole life. I can sleep better without it and try to increase my wealth, part 7 of the article. I think, we all should learn more about it and should start with this topic already in school. We all would benefit from it.

    1. Hi Bernd,
      Your among a few who doesn’t have any debt. Keep up the good work. I agree mutual funds are one the safest investments available.

      Thank you for stopping by.

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