Personal Finance

I read this book a few years ago, mostly because I wanted to see Dave’s thoughts on paying off a mortgage early. The main thing I liked about the book is the simplicity of his approach.

• If you think it’s only about math, you’re wrong.
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• Saving for a downpayment or cash purchase of a home should occur only after steps 2 and 3 are complete.
• Since then, it has sold over 5 million copies and the book has been on The Wall Street Journal bestsellers list for over 500 weeks.
• Now, you might think that saving 3-6 months’ worth of expenses “just in case” is a bit extreme.
• He also spends significant time relating how society tends to glorify and/or encourage certain types of unwise financial behavior, particularly the use of credit.

It must be liquid (i.e. you can easily and rapidly access it). If you try and do everything at once, progress will be slow. This will make you feel you aren’t accomplishing anything, which may lead you to give up.

Debt Snowball Controversy

As of August 2017, over five million copies have been sold and the book has been on The Wall Street Journal bestsellers list for over 500 weeks.

If you try it and it doesn’t fit your life no harm done. With billions of people on the planet, each with their own set of unique circumstances, to believe there is one right way is foolish. Imagine the peace of mind you’d have if you could not work for six months and still be the total money makeover: a proven plan for financial fitness able to pay the bills. Now, you might think that saving 3-6 months’ worth of expenses “just in case” is a bit extreme. While that might seem like a lot of money to have lying around, I’d be willing to bet you’d be glad you had it if you suddenly got laid off from your job.

If you can’t learn to be generous, you still haven’t achieved financial freedom. Attack your debts in order from smallest to largest to rack up wins and build confidence.

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Jamie Johnson’s review for Bankrate stated that, “If you’ve been struggling with debt and need a step-by-step plan for how to pay it off, The Total Money Makeover gives you precisely that.” The content on this site is for informational and educational purposes only and should not be construed as professional financial advice.

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Dave Ramsey is my number one mentor and has changed my marriage and my walk with Christ. I cannot wait to go to his office next year and do my debt free scream with my wife and daughter. I suggest a Money Market account with no penalties and full check-writing privileges for your emergency fund. “A budget is people telling their money where to go instead of wondering where it went.” Whether your income is large or modest, this is the best way to get rid of debt and create wealth.

Please consult with a licensed financial or tax advisor before making any decisions based on the information you see here. One of his favorite tools (here’s my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes forex each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you’re on track to retire when you want. Dave Ramsey first started sharing his advice it was 2003. And if you look in his book, you’ll see numbers that are out of date.

If your household income is greater than $20,000, aim for a $1,000 emergency fund. If your household income is less than $20,000, aim for a $500 emergency fund. The success stories speak for themselves in this audio book from money maestro Dave Ramsey. Ramsey knows first-hand what financial peace means in his own life – living a true riches to rags to riches story. By age twenty-six he had established a four-million-dollar real estate portfolio, only to lose it by age thirty. Americans are some of the richest people in the world, but most can’t hang onto their money.

Dave Ramsey (

The brilliance in this approach is that it considers human psychology. That’s the non-math part of personal finance. People don’t get themselves into debt because they don’t understand math. Most of the time, they get themselves into debt because they have an issue with spending money on things they don’t need and/or can’t afford. The Total Money Makeover teaches individuals how to get out of debt as well as how to budget. Since human psychology gets people into debt, why not use it to get out of debt?

Dr. Tom Stanley wrote a wonderful book in the ’90s that you should read entitled The Millionaire Next Door. The library card you previously added can’t be used to complete this action.

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His belief is that anytime you owe money to someone, they own you to some extent. Even smaller mortgages or student loans put an obligation on the borrower. It means you’ve got a certain amount of money you have to come up with each month – to give to someone else. forex Some point to his anti-debt stance and how it would be impossible to live that way. They point to his multi-million dollar house and say he’s putting up a facade. DO NOT take out a 30 year mortgage and ‘promise yourself’ you will pay it back in 15 years.

You can’t spend yourself into debt when you’re paying with cash. When you want to make a purchase in any of these areas, you’d take the money out of your nicely labeled envelope and buy with cash. When the cash in one envelope is gone for the month, you’re done spending in that area.

The book is routinely in the top ten in Amazon’s Personal Finance category. So if you’re struggling with debt, I think you might want to give this book a try. The book also contains a lot of motivational stories of people who probably were forex analytics in more dire straits than you and were still able to pull themselves out. Maybe you put this idea into action by cutting up your credit cards or freezing it in a block of ice. Whatever that looks like to you, make a big deal of it.

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A full emergency fund covers three to six months of expenses. To determine whether or not you should err towards three or six months, consider your situation. If you are in a riskier position (e.g. self-employed, earning straight commission), then err on the side of caution. The emergency fund is applicable to everyone, even those with a guaranteed income – you cannot predict out-of-budget emergencies. You will arrive at the beginning of Step Three in around eighteen to twenty months. When you reach this step, you have $1000 cash and no debt except your home mortgage. Criticism aside, the book is one of the most practical guides to wealth building I have come across.