Money, Dave Ramsey

Book Review: “The Total Money Makeover” by Dave Ramsey (2009)

Money, Dave Ramsey

Dave Ramsey is probably the most famous US personal finance gurus out there. His advice and motivational material has helped thousands (he claims millions) get completely out of debt. His book “The Total Money Makeover” offers up a baby step program to organizing your life and debt.

For the material, Ramsey does a good job of offering simple advice that is easy to execute. The book often rambles, but is full of colorful anecdotes that hammer in his points. Essentially the Dave Ramsey plan boils down to a series of steps:

    • Baby Step 1 — $1,000 to start an Emergency Fund
    • Baby Step 2 — Pay off all debt using the Debt Snowball
    • Baby Step 3 — 3 to 6 months of expenses in savings
    • Baby Step 4 — Invest 15% of household income into Roth IRAs and pre-tax retirement
    • Baby Step 5 — College funding for children
    • Baby Step 6 — Pay off home early
    • Baby Step 7 — Build wealth and give!

The book illustrates these points. Ramsey is vehemently anti-credit card and recommends purchasing most things (giving some leeway for housing) with cash. I particularly like some of the sound advice covered in the book:

    • Winning at money is 80 percent behavior and 20 percent head knowledge.
    • “The enemy of “the best” is not “the worst.” The enemy of “the best” is “just fine.”
    • I tell everyone never to take more than a fifteen-year fixed-rate loan, and never have a payment of over 25 percent of your take-home pay. That is the most you should ever borrow.
    • A budget is people telling their money where to go instead of wondering where it went.
  • Someone who never has fun with money misses the point. Someone who never invests money will never have any. Someone who never gives is a monkey with his hand in a bottle.

I’m really impressed with how powerful the book is in its simplicity. Ramsey echoes the point that his advice is simple, but not easy. A lot of the problems are built up in your head and are mental blocks, rather than physical ones. The best time to start was yesterday. The next best time is now.

Quote of the Book:

“We buy things we don’t need with money we don’t have to impress people we don’t like.”

Overall: A strong book on personal finance. This is a good simple reminder of how powerful small actions can be in your life. I will argue some of the investment advice isn’t exactly clear or based in reality, but overall the philosophy around the book is something a lot of people should be adhering to.

Link to book on 

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