On my mission to really take a hold of my financial and personal goals, from time to time I will bring you books that I have read and that have changed my life for the better. #1 in this series is a book that has intrigued me for a while now – ‘The Total Money Makeover’ by Dave Ramsey. Dave Ramsey is well documented as having experiences of life when truly wealthy, to deep in debt and trying to fix it, and now… financially free because he learned from his mistakes and truly prospered.
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Phew now that boring bit is out of the way….
As reading and learning is a gradual process, this post series will grow organically with inspiring books for you to try too.
I firmly believe that knowledge and the benefit of other people’s experience can help us with where we need to be next. It’s a case of filling in the blanks of knowledge that we just don’t know yet.
So without further ado here is my first review.
#1 The Total Money Makeover (Dave Ramsey)
If you are really serious about slashing your personal spending and reaching heights of personal financial freedom that you never thought possible on a normal income, then this is the book for you. We have taken on Dave’s challenge of working through what he calls ‘Baby Steps’ to money freedom.
Step 1 – Create an emergency fund
Yeh we’ve all been there – like an emergency car repair or extra medical bill we didn’t plan for! Dave demonstrates how to achieve this fund in a relatively small amount of time. This is our present step. (Ugh – I had to pay out half of it for the car this month, but it felt peaceful to have had some backup savings). Creating a monthly budget is key here – and sticking to it. Dave describes this clearly and uses key myths to give you the hard facts.
This is the budget planner I created in response to this section. Head over to my gumroad site to purchase the Budget Binder through my special link.
What’s included in the 2019 Budget Binder at a glance
3 pages of budget planner
(key areas of spending in your budget)
Savings goals planner page
• Cash Envelope Sets:
Cute animal series
Inspiring quotes series
Step 2 – Snowball your debt apart from your home mortgage
Ever thought – how am I going to pay off all my debt?
Dave has helped millions to pay down all their debt on average within about 2-3 years.
He explains in a clear way, exactly how to do this realistically. What I really liked was that he built in examples of normal people and their stories. I left this particular chapter feeling super pumped up to do the debt snowball again. Read more about how I snowballed my our debts previously. We’ve paid for a new car, so we will use this approach again.
Can you imagine how relaxed you would feel, with no debt payments apart from your home?
Step 3 – Build a larger emergency fund
Dave uses the analogy of Murphy’s law to explain that things always happen when you least expect them too. By deciding how many months income you need, you are taking control of your financial stability should anything unfortunate happen. He goes through the different job types and how much, in his opinion, he thinks you need to save. Again the chapter is well supported by realistic examples of what people’s experiences have been like on Dave Ramsey’s Total Money Makeover.
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Steps 4 and 5
Seriously, can you visualise a better financial future already?
Dave really comes into his own with his expertise on Baby Steps 4 and 5 – In detail, without being patronising, he explains the advantages of doing these steps. Baby step 4 is setting up saving for your retirement, and 5 is about saving for the kids’ college fund. He is based in America, so some of the information is more US related. Nonetheless, the basic concepts he drives are the same:
You need to aim for a dignified and secure retirement
Pay cash for college for the kids
It sounds daunting doesn’t it, but again Dave leads you step-by-step. It started making me feel very secure in the step I’m taking right now – like he was taking the pressure off and just saying
‘Just you worry about the actions, I’ll worry about the big picture’.
Step 6 – Pay off the home mortgage
This is the one I am most keen to get started as soon as possible! Sounds crazy, but again this chapter is backed up with so many people that have achieved just THAT!
Dave Ramsey asks:
How would it feel to have no payments?
Can you close your eyes and dream for one moment that this is the case? What you be able to save a month? $500? $1000.
Dave guides you through the key starting points of this process and clears up popular myths in the process.
Again, for UK readers, some of the details are US specific, but the key points are the same.
Step 7 and 8
This section is particularly interesting as we really do gain that valuable insight into Dave’s various experiences of money. He harks back to the reason you have arrived at these steps:
To have FUN, INVEST and GIVE
Rightly so, here he explains that money, when you experience more of it can cause problems in itself. His model above ensures you have a balanced approach towards it so you achieve a balanced life.
Stop the financial chaos and head over to change your life balance with The Total Money Makeover (Dave Ramsey)
In my quest for inspiration on my budgeting journey, I would give this a thorough 9 out of 10.
Dave Ramsey is in no way patronising – he is a normal man, who has been from a bad place to a great long term place in terms of money. He is also so willing to share how he did this. Although I have no particular religious faith, and Dave clearly does, he never tries to convert anyone – all he does is give humble examples of how he has used his money to further action his belief system.
He is so clear and precise – at the beginning of the book, he is blunt and honest about whether you are serious enough for the challenge. I liked his approach and found his rants throughout the book clarified why I should follow these baby steps myself.
The resources he has shared at the back of the book are really useful, although my only tiny criticism would be possibly that they could have been supplied in digital form, so people would find them easier to use. Personally, I created my own budget binder based on these principles.
Over to you..
Have you read any inspirational books that we all could learn from and improve our lives? If so drop a comment and share with everyone, which book and why it has been so useful.
Do me a favour please, if you have read this book and find it useful, please share your experience below by commenting so that other people can learn too.
Other links on Saving Money, you will find super useful!
In the meantime, read these posts on specific ways of saving money:
- How to Save More Money Each Month By Cutting Personal Spending