My sister tells of when we were kids, and how I use to save all my money and she would spend hers on candy and trinkets. Then, she'd be broke and I would have money. In a young entrepreneur move, she'd sell me some of her trinkets, at inflated prices, I'm sure. The point being, I'd waste my carefully saved money on her 'deals.' Was I making a poor choice? You bet.
Thankfully, I don't make such crazy choices anymore. Or do I? Maybe now, I justify these with grown up rationale or excuses.
Do these spending behaviors become habits? They sure can.
Do these habits become lifetime traits and patterns? They don't have to.
The Total Money Makeover, by Dave Ramsey is a book that addresses poor money decisions and habits with clear, concise methods to change your financial habits dramatically.
Ramsey is a well versed financial guru. He knows his stuff. He's seen the bottom of the pit and lived in it. Having lost all his assets and perhaps even his pride, he climbed out of the debt pit and began to make money. Now, as a successful business man, he continues to share what he has shared since: good ol' fashioned money advice.
Ramsey describes The Total Money Makeover as the how-to steps of his Financial Peace curriculum. The book begins by debunking commonly held beliefs about money. As most of these were not new to me, I was not overtly surprised or offended by his stance on myths like "debt is a tool and should be used to create prosperity," and "playing the lottery and other forms of gambling will make you rich." What I really appreciated was how he confronted these myths with facts and common sense.
Following the myths, Ramsey helps readers clear two other hurdles as he calls them. Having no knowledge of finances is no excuse for making poor decisions. Ramsey pleads with readers to learn and keep learning about money and how to use it. The second hurdle has to do with others, including our incorrect assessments of other people's financial success and peer pressure. Both of these hurdles can and will impede financial progress. Once a reader clears these, the steps to financial freedom begin.
Just like the initial portion of the book, the steps are presented in a clear, concise manner. Ramsey offers readers a step by step method to save money and pay off debt. This is not just save a little money and pay off a little debt. No, Ramsey presents a method to pay off all debt, including a mortgage, and save a lot of money.
These steps are not crazy, but people may think you are for doing some of them. Ramsey recommends, or maybe insists, you cut up all credit cards and stop borrowing money from anyone, anywhere. In a debt laden society, this move is not usually promoted, even by 'financial experts.' We are usually told to keep one for emergencies. Ramsey follows a different path. He tells us to save up an emergency fund. His advice doesn't stop there. Ramsey also shares how to pay off your mortgage, save up money for large purchases like cars and college tuition, and live off your own money during retirement.
Throughout the book, Ramsey does include some special circumstances like what to do if you are beginning the plan a decade before retirement or what to do if you are in the middle of "snowballing" your debt, but you suddenly need to pay a large unexpected bill. His advice is the same no nonsense answer one would expect from his stance on money.
The concluding chapters hold the heart and motive for following these steps. Financial freedom to do what you want with your money. Ramsey sums it up with three words: "fun, invest, and give." I greatly appreciated his thoughts on wealth based on stewardship and blessing rather than greed and the importance of giving to others.
The newest printing of The Total Money Makeover includes personal testimonies from people who have been through either the entire plan, or a good portion of it, and are experiencing a 'financial peace' like never before. These encouraging stories urge readers forward in their own journey.
Overall, this book is full of consistent and clear financial advice.
~ Dorie
Fine Print: I received a copy of this book from the publisher in exchange for a review.
