The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey

I have never been smart with my money. I have managed to scrape by just fine but I often wonder where it all goes. I am not in control of my money and it isn’t working for me. I know that I need to change this so I have started to do some reading on it. You may have seen some of my posts about those books.

I stumbled across a radio program on Sirius XM called The Dave Ramsey Show. People call in with their money problems and Dave does his best to help them. I listened to it for a few weeks and heard both him and his callers refer to this book.

He has some great ideas about how to get in charge of your money. He believes that you should never use credit and suggests cutting up all your credit cards. On his show, he regularly says, “Debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.”

This book outlines the Baby Step program he suggests and it is easy to follow. The first step is to save $1,000 as quickly as possible. This is an achievable goal if you work hard to make it happen. This money will be used for emergencies only. That way, when something unexpected happens, you don’t need to rely on credit and build up more debt.

After that, you need to attack your debt methodically. He suggests targeting the smallest debt first and paying it off as quickly as possible. You continue to pay minimum payments of the rest of your debt while you do so. Once that debt has been cleared, add that regular minimum payment you would have paid and tackle the next lowest debt amount. He refers to this as the debt-snowball.

The next step is to build up your emergency fund so that it will cover three to six months of your expenses.

Ramsey also tells us that taking out a car loan is something we should never do. One of his favourite sayings is, “Life like no one else, so you can live like no one else.” That basically means almost everyone has debt and has some worry about money. If you follow his plan, you won’t have debt ever again and can live without the constant worry about money and making ends meet. To this end, he suggests buying used cars that fit into your budget and to pay for them in cash. Once you build up more wealth, you can get better and better cars.

Overall, this is a great book. He has further tips on how to be financially fit. I need to focus on these first steps first. I will definitely be revisiting this book when I am prepared to move further with his program. I am fit and healthy in other aspects of my life. It is long passed due for me to get financially fit too.

My List of 2019 Reads – comics, fiction, non-fiction and more.