The Total Money Makeover A Proven Plan For Financial Fitness

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Ilda Roehrig says...

"The Total Money Makeover" by Dave Ramsey, is the 3rd Edition of his popular book outlining personal finance advice and his "Baby Steps" method of righting your financial ship.I'm assuming that if you actively searched here under his name, you already know who Ramsey is - he and Suze Orman are probably the two most prominent personal-finance show hosts in the US.They have somewhat different styles - both can be pretty blunt to their callers when needed, but Ramsey tends to lean toward advising people to take more-drastic measures to get their debt down (`beans and rice, rice and beans' and his mantra of `Live like no one else, so you can someday Live like no one else') as opposed to Orman's "People first, then money, then things".She's a bit more empathic, but maybe he's a bit more hard-line because, at least from what I've seen (and I've watched both for several years), his audience generally seems to get themselves into bigger financial messes in the first place.If you think you've got it bad, tune into his show (on Fox Business Channel on cable) and you'll hear some REALLY bad stories of situations people have gotten themselves into, that will probably make you feel better about your own finances. Many of the `true stories' contained in the book are of people who got themselves in trouble by: 1) getting married/divorced too young, to/from someone who was as equally inept at handling money; 2) having lots of kids at a very early age (they're expensive, big surprise); and 3) appearing to have no education beyond high school, or majoring in something that is unlikely to yield a living income.



That said, the Ramsey book is a somewhat easy read - it runs around 250 pages, but the print is actually larger than I'd have expected, and the language is pretty colloquial, so it reads pretty quickly and is easy for even the financial newbie to grasp (I read it in around 4 or 5 sittings).The book is a codification of a lot of the advice you'll hear on his show on an ongoing basis if you watch regularly.His strong points are that he's no-nonsense in cutting to the bottom line, and debunking commonly-held `myths' of personal finance.If you're a loyal, diligent watcher of the show, though, this book may be redundant if you've been paying close attention, but for new initiates, it's an informative, if limited-in-scope, read that might provide a jumping off point for further reading.If you're totally behind the 8-ball financially, though, by all means get and read the book, because you've got to start somewhere, but if you've got your act together, and are facing more-advanced issues (such as trusts, estate planning, elder care issues, etc), then really you'd be better off reading Orman's books, which are more substantial and confront the more esoteric/complicated issues of personal finance.I've noticed from watching both, that Ramsey seems to specialize in getting people `back to zero and then on the right path' when they've really dug themselves into a hole (i.e. to get out of debt in the first place) - his advice is basically pretty on-the-mark and keeps it simple (if you're not averse to Bible verses sprinkled in there).I am an accountant, and while I can't say I agree with everything he says (he seems a little TOO wrapped up in the `pay cash for everything' mindset, to the point where I think he's not being realistic about effective ways to use credit in today's world, but I also think his recommendation of a 6-month emergency fund is not enough, given today's rotten economy - you really need 9 mos to a year), the bulk of the info he provides is pretty good (such asthe "Debt Snowball" method of attacking your debt), if you can do the most important thing in following it: you need to impose self-discipline to break bad-spending habits.His methods require almost crash-financial-diet measures (such as taking on extra jobs, ceasing any and all unnecessary spending to the point of maybe not having much fun, selling your possessions, etc.), but if you can stick to it, it will probably yield results.There are some simple-to-use worksheets in the book, which you can copy and fill out, to start getting the lay of your finances and create a plan to address problems.



I DO have to say, though, that there were at least two ideas in the book that I heartily disagree with, to the point where I think they're maybe outright bad advice: 1) he says that if you're paying down your debt, you should stop contributing to your 401k plan altogether, even if you're being matched 100% up to a certain amount, in the interest of the psychology of paying the debt - this is questionable advice, because the match is free money that probably works out to an earnings rate far in excess of your interest rates on your debt - on the other hand, if you have oppressive debt, you might be better off paying the debt off, so you need to work the math in `real dollars' on that before you leap; and 2) on pgs. 39-40, he basically dismisses the `worth' of a good FICO score (saying it's an "I Love Debt Score"), and says that ideally you should have NO score - that sounds good on paper, but it's simply not workable in real life, as no bank will loan you money without one, for any purpose - and his entire philosophy is predicated on paying cash for everything, which is much easier said than done (unless you get a 15 year mortgage, which he recommends, but surprise - you'll need a high FICO AND down payment for that).Contrary to what he'd have you believe, it IS possible to have a very high FICO without incurring tons of debt.The FICO stance is where Ramsey and Orman diverge markedly (she preaches the virtues of having a high score, earned by prudent use of credit).And i won't even get into the fact that many prospective employers today WILL check your credit score before offering you a job, and jobs aren't easy to get nowadays in this economy.Nuff said.....



So, in my opinion: if you're REALLY in a hole financially and need to right the ship, then get one of Ramsey's books (this one is a good start); if you've got your act together, and have succeeded in getting out of dire financial straits, check out Suze Orman's books.

Posted on December 9, 2010

Patty Kopka says...

I paid off almost 50K in less than 2 years using this book.Dave talks about using common sense, but more importantly addresses the deeper causes debt.Don't listen to reviews telling you that this book is too simple.Do you really want a complicated plan to become debt free?This book has changed my life!It is truly incredible. Thanks Dave!

Posted on December 10, 2010

Delphia Condelario says...

If you're thinking about passing on this latest book from financial guru Dave Ramsey because you've already read his first New York Times bestseller Financial Peace, think again.Financial Peace is "what to do."Total Money Makeover is a step-by-step, nuts and bolts "how to do" kind of book.Dave takes the seven key principles of a healthy financial plan from Financial Peave and gives them a shot of adrenaline and a ton of muscle!He walks with you through each of the seven "baby steps" and shows you exactly how to accomplish each one.Along the way Dave shares dozens of stories from people who are working on or have completed their own Total Money Makeover.The result is a book that could replace all others on personal finance.Reader beware: If you're looking for the next "get rich quick" book from a guy with a calculator and no experience, this is not the book for you.But if you want an uplifting and encouraging book that will show you exactly how to build true wealth and will give you loads of stories from people who have done just that, pick this book up today!Dave knocks it out of the park with Total Money Makeover, and your personal finances could be doing the same very soon.

Posted on December 11, 2010

Letty Eschenburg says...

This is the first book I've read that thows away the fancy models, throws out all of the crappy advice your broke friends have given you, and simplifies financing down to easy, understandable concepts.This book isn't for people looking to get rich quick.If you're looking for a high-risk big payback scheme, move on.If you're looking to build a financial future based on solid, time-tested concepts, this book will change your life.It shows you a clear path to financial success based on debt reduction, saving, and, believe it or not, giving.



Dave was a millionaire by the time he was 30-years-old.Then he went broke, filed for bankruptcy and had to start over from nothing.His concepts are based on interviews he's done with millionaires and an autopsy on his financial failure.His plan is rooted in very sound financial concepts such as: there is no way to borrow your way to wealth.



He lays out a plan based on simple baby steps that walk with you from your current situation (buried in debt otherwise why are you looking at this review), to retirement with enough money to burn.No matter your income level, mine is quite high, this book will give you a path from debt to wealth.



Here's the catch.This plan requires you to change your habits.IT IS NOT FUN.IT IS NOT EASY.IT CAN BE DOWNRIGHT PAINFUL.But if you put yourself through this plan, within 5 years you will be out of debt, and on a path to some serious wealth.I will be completely debt free with money in the bank and a retirement plan going by June of next year.I can see how I will retire with millions of dollars in the bank.I have financial security for the first time in my life.Dave's plan simply works.Are you fed up with living paycheck to paycheck?Tired of CitiBank?Tired of GM Finance?Buy this book and get intense. Thank me later when you're rich.

Posted on December 12, 2010

Willard Hnat says...

Finally, a book that speaks to everyone, from those who are complete financial disasters to those who pay their bills on time, but overpend and need to reduce their debt load.Too many books about debt focus only on paying your bills on time and reducing your interest rates, while ignoring the people who have too much debt and are too smart about it, never paying a late fee and keeping it all at low interest.



I have never heard Ramsey's radio show, but this book was a huge wake-up call for me.It is motivational and it will get you pumped to get intense about reducing your debt load and living only with the cash you have today.The strategies are excellent, the advice is solid, and people have turned their lives around under Ramsey's guidance.There are a lot of testimonials in this book, perhaps a few too many, but I enjoyed seeing the success stories and seeing the different kinds of people who turned to Ramsey's method.



This book has wide appeal and everyone should check it out once to give their finances a good sanity check.

Posted on December 12, 2010

Joya Oelze says...

Dave is an excellent motivator and this and his other books (Financial Peace Revisited, More Than Enough, More Than Enough Workbook) that I have read are the best. They have a personal quality that others don't, and are right on target.I have sent this book to all my kids and recommend it for my overweight patients to help them with their motivation.It gives you definite goals to shoot for and a lot of help to do it.

Posted on December 12, 2010

Valentine Copus says...

I enjoy discussions about my finances about as much as I enjoy talking about my weight. I certainly need to work on both, but I'd prefer to avoid the topics if at all possible, thank you very much. Can I get an "amen"?

Dave Ramsey, radio talk show host, author and all-around financial guru, is no stranger to this ostrich routine. After his own bankruptcy he came to the conclusion that the key to financial (and physical) fitness isn't knowing all the tricks of the money trade; it's being honest with yourself. "If I can control the guy in the mirror, I can be skinny and rich," he says in his new book THE TOTAL MONEY MAKEOVER.

In other words, you have to get your head out of the sand. Okay, I have to get my head out of the sand.

Leaving the skinny to other books, Ramsey is a prophet to those who want to be rich but would settle for being financially stable. It's clear that this is a large group, given the popularity of Ramsey's radio show and books. After reading THE TOTAL MONEY MAKEOVER, I can see why they flock to him for advice.

Ramsey's principles are simple and straightforward. Pay cash. Pay off debts from smallest to largest. Create an emergency fund. He provides easy-to-understand answers to many seemingly complex questions about budgeting, retirement funds, saving for college education, and more.

Large pullout quotes scattered throughout the book offer bite-sized financial advice and factoids in Ramsey's typically direct manner:

"A new $28,000 car will lose about $17,000 of value in the first four years you own it. To get the same result, you could toss a $100 bill out the window once a week during your commute."

"Looking to spend $100 per month on life insurance? You could pay $7 a month toward term insurance and invest the remaining $93. But go with a cash-value policy if you'd rather have someone else earn interest on your investments."

"49% of Americans could cover less than one months' expenses if they lost their income."

"If your mortgage payment is $900 and the interest portion is $830, you will pay that year around $10,000 in interest. What a great tax deduction! Right? Otherwise, you'd pay $3,000 in taxes on that $10,000. But who in their right mind would chose to trade $10,000 for $3,000?"

All of this advice is helpful and eye opening, but what Ramsey really excels at is presenting inspirational tales of those who were once, but are no longer, in financial disarray. Their stories make up at least a third of the book, and the cumulative effect is that of a published pep rally designed to get people pumped up about saving money. And it works.

This is a must-read book for anyone whose looking for a little basic financial information and a whole lot of courage to finally put away the ostrich suit.

--- Reviewed by Lisa Ann Cockrel

Posted on December 13, 2010

Landon Bouch says...

I have been listening to the Dave Ramsey show on talk radio for about three months and was sooo impressed I bought this book. Dave has a great way about putting things into perspective for those of us who are in denial about our financial situation. His "baby steps" are simplistic and the debt snowball plan is a must for anyone trying to swim out of the dark hole of credit card debt. The book contains practical information, is easy to read and contains many testimonials and examples of other individuals in situations just like your own. Reading this book has literally been a life changing experience for my family. Thanks Dave! My recommendation...if you have debt, get this book!

Posted on December 14, 2010

Roderick Brandi says...

This book is extremely readable and contains a tremendous amount of helpful information in the areas of personal finance and debt reduction/elimination.Dave Ramsey makes a compelling argument for the elimination of all debt by rather extreme means.He exposes the common myths spread by the credit industry and offers a solution for eliminating debt through something he calls The Debt Snowball.My only complaints center around the fact that he advocates mutual funds as a means to achieving 12% returns over the long run and that he advocates National Guard service as a means of paying for college.I'm not sure that mutual funds can be counted on for 12% in the long run, and National Guard service these days can involve exciting times in far away locations like Iraq,which make the cost/benefit analysis a bit unappealing.However, this isn't a book about investing and the college financing advice is otherwise quite helpful.I'm sold on the concept of The Total Money Makeover!

Posted on December 16, 2010

Tyra Swanigan says...

I am not stupid nor do I hate finances.In fact I work for a bank and love working with numbers, but until I heard Dave on the radio, I really had no clue.Other reviewers have stated that what Dave teaches is very simplistic.Thankfully, yes it is, but guess what...they aren't teaching this in schools, your banker is not going to tell you this and your financial planner may not even give you this common sense advice.Since listening to Dave, I have changed my current financial position by $20,000 to the positive in 16 months.I am married with 3 kids and do not live a lavish life style making only about $50,000 a year, but have decreased our spending and increased our savings.My wife feels more secure and the collectors no longer call.



I have never been given the impression that Dave pushes his books or other products.He does advertise them and offer them for sale, but guess what...he gives you the meat of the books on his radio show for free!



The question that I have for those that don't like his book or call him simplistic is...Since this is all common sense, how much of this do you already follow?If you are already doing this, then congratulations and you are truly unusual.If not, then don't put Dave down for repeating the basics, when most of us don't follow these rules.

Posted on December 20, 2010