The Total Money Makeover

THE TOTAL MONEY MAKEOVER


Author: Dave Ramsey

http://www.totalmoneymakeover.com/

RATING: 9.4 out of 10

OVERVIEW: Outlines 7 ‘baby steps’ to create financial freedom using your personal budget.

You know I’ve always considered myself extremely good with money.  I’ve always budgeted my money strictly and never even paid one cent in interest on a credit card.  Although I will admit that I’ve paid too much interest on my cars, which I’ve now paid off.  While I’m taking the time to brag about myself (sorry); I was far from a perfect financial manager.  Dave Ramsey showed me many things about money that I didn’t know, I didn’t know.

Money can be very frustrating.  This book makes money matters simple and described money in steps that everyone can follow.  Whether you make $10 per hour or $10+ thousand per month, this book will teach you that it’s more important what you spend then what you make.  Our society teaches us to focus more on ever growing income but fails to recognize that you’re “only rich if you spend less than you make.”  Many of us believe that if you can afford the monthly payment that you can afford the car, house or toy. 

Learn the power of working towards living a debt free life.  Be preventative and prescribe yourself the behavior needed to manage your money.  Money isn’t about math but about behavior.  If you don’t track your money, you will ask yourself “where you money went” instead of telling your “money where to go.”  If you’re willing to change the attitude that you can have what your parents had, that took them a life time to achieve, and then you can live no one else.  “Live today to like no one else (budget tightly), so later you can live like no one else (spend freely)”.

Please read this book.  I don’t care how well you manage money or the lack thereof.  You can learn something that can change your life so you can be financially free and not a financial burden to those who will have to take care of you.

MY NOTES:

  • LIVE TODAY LIKE NO ONE ELSE SO TOMORROW YOU CAN LIVE LIKE NO ONE ELSE.

BABY STEPS (Each step must be completed to move forward)
Step 1 – $1,000 to start an Emergency Fund.
Step 2 – Pay off all debt using the Debt Snowball*.
Step 3 – 3 to 6 months of expenses in savings.
Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement.
Step 5 – College funding for children.
Step 6 – Pay off home early.
Step 7 – Build wealth and give! (Invest in mutual funds and real estate).
*Debt Snowball: Paying off the smallest debt first.

  • All people are born not knowing how to drive. All people aren’t born knowing how to manage money. We aren’t stupid, we need only be educated.
  • If you can control the man in the mirror you can not be skinny and rich.
  • Don’t be financially fat. Don’t suck in when you look at the financial mirror.
  • Getting rich isn’t a risk or theory, it’s a mathematical certainty.  (read the book, you can see the math)
  • “There are no shortcuts to anywhere worth going”
  • Living right isn’t complicated, it may be difficult, but not complicated.
  • College is a luxury not a need.
  • No one has perfectly strong discipline to pay extra on loans. Don’t set up a 30 year loan and promise to pay 15 year rates. Something will happen.

3 uses of money: 1.Fun 2.Investing 3.Giving

*There are so many gems of knowledge in this book.  Very Interesting!

0 thoughts on “The Total Money Makeover

  1. Daniel Pink

    Great review. I’ve heard lots and lots of good things about this book, but your write-up brings the concepts into much clearer focus. It also got me thinking something new: What if we brought these concepts to American fiscal policy?

  2. Anonymous

    Great review. I’ve heard lots and lots of good things about this book, but your write-up brings the concepts into much clearer focus. It also got me thinking something new: What if we brought these concepts to American fiscal policy?

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