Review: Total Money Makeover by Dave Ramsey

One of the common elements of a big city is mass transit.  While I’m not a fan of my commute, I will admit that it gives me a chance to sit down and read.  One guy that has been a staple in the personal finance community is Dave Ramsey.  I used to work at a bookstore and we could never keep Financial Peace: Restoring Financial Hope to You and Your Family in stock.  I never understood why.  Actually, I was always quick to dismiss the personal finance books as “get rich quick schemes” or solutions in a box that worked for some and not for all.  My Dad was from the exact opposite school of thought.  He loved Dave Ramsey along with a handful of other pf authors and this year, for Christmas, he gave me a copy of The Total Money Makeover: A Proven Plan for Financial Fitness. Since him and I have always talked about money, he knew that I had been starting to stress out about finances and the current economic climate, so I was actually thankful for the book.

The book was a quick read.  After I finished it, I was scratching my head, but not from the book’s content.  I was wondering why the heck I didn’t read Dave Ramsey ages ago.  I would have probably avoided most of the junk that I got myself into over the past 10 years.  He’s got a great motivational tone to his words.  I haven’t listened to the radio show, but I will probably start soon.  For me, the book was the first installment of dynamite needed to blow through my wall of debt.  Most of the issues mentioned the book such as “rent to own,” car payments, and mortgage payments weren’t relevant to my current situation, but I like his concept of the “debt snowball.”  It is good to get behind debt reduction mentally because if you can win that battle, the war is much, much easier.  One tool that I have used over the past few months and plan to use with greater diligence in the future is the Debt Reduction Calculator.  It gives you various options on how to pay off your debt.  Whether you use the Ramsey snowball, the highest interest first or a customized schedule, it is a great way to look at your overall debt picture and to establish a method of paying it off in the future.

I think the key of Dave Ramsey is one that I’m just a little gunshy to try.  Maybe it is because I’m addicted to credit cards or have just had to rely on them for so long, but cutting up your credit cards is a difficult task.  I think I have figured out how I will be able to part with them and will explain in a later post.  I think one of the best things about Dave Ramsey is that he doesn’t get too complicated.  He isn’t throwing around complex procedures.  He is giving you practical advise and incorporating general wisdom that makes sense.  I’m still working on laying the groundwork to get “gazelle intense” as he calls it, but I think I can do it.  Another thing he stresses is budgeting, which is crucial to any debt reduction system or even to just planning your daily life.  Budgeting is also where tools like Quicken and Mint come in handy.  While I was never one to set up a budget in Quicken because it took too long, I am working on setting up a budget in Mint and I can customize with ease.

Whether you like the book or not, I think the one thing you have to take away from it is that everyone NEEDS AN EMERGENCY FUND.  Until the current financial storm, I never thought about an emergency fund.  Regardless of the support of my family, I realized that my debt would be a terrible burden on anyone if something happened to me.  Whether it’s a layoff, an injury , a death in the family or anything else, it can happen to anyone and we all need to be ready.  Sorry for the scare tactics, but Ramsey does a great job of reinforcing the importance of an emergency fund and if you haven’t started saving for one now, you should start right away.

In the end, I think that Dave Ramsey will probably serve as one of the key building blocks for building a strong foundation to pay off all of my debt.  I like the way he thinks and I enjoy his writing style.  He covers a lot in this book, but doesn’t try and cover everything, which makes this book even better.  He reminds me of a good football coach that doesn’t mince words.  Instead, he is straight to the point, which is something I can appreciate.  If you’re a fan of Dave Ramsey or just looking for a nice gameplan to escape from Debt Island, I’d say the Total Money Makeover is a great place to start.

Next up: The Wealthy Barber, Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner, and Debt-Free by 30: Practical Advice for the Young, Broke, and Upwardly Mobile.  By the way, my goal is to read a book a week and post a review every Tuesday.  I don’t think that’s too crazy.  First, I’ll start with the ones collecting dust on my shelves.  After that, I guess I’ll have to buy them on half.com or find out where the local library is.

(I am reviewing Debt-Free by 30 because I was given the book back when I was in college and it is still sitting on my bookshelf.)

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