The Total Money Makeover

by Dave Ramsey

[Raven]

If you've never had a good grasp on budgeting before, or your budget has fallen off the wagon and you are feeling lost about getting it back on track, then this can be a good read. The principles are smart and well planned, but Ramsey presents them in a condescending way that screams it was written by a salesman. You're left feeling like you were sold something you wanted along with a healthy supply of snake oil all while having been insulted.

The first half of the book is just filler and repeating the same things over and over again. Save yourself the time and pick up the workbook instead. Same thing, just without the fluff.

This is a good roadmap, but not something to use as a strict instruction manual unless you are a sneeze from bankruptcy. His methods make sense, but they are so aggressive. He basically wants you to eat, breathe, and sleep work/making money until your debts are paid off. No fun time, even free fun time, no spending time with your family, no love life. Your every waking moment should be spent working and selling anything you can to get your emergency fund and your debts paid off. He wants you to stick to his aggressive schedule until baby step 3 at the earliest, which getting there, he expects to take no longer than 2 years regardless of your income or debt.

Baby Steps:
1. Small Emergency Fund of $1000
2. Pay off all debt except house with debt snowball
3. Fully Fund Emergency Fund to 3-6x of living expenses
4. Invest 15% of income for retirement
5. Fund kids college fund
6. Pay off mortgage
7. Have fun, give and invest

I don't agree with his plan to do a debt snowball, I feel the debt avalanche is a better option. I get why he chooses the snowball, you see results quicker that way and the "wins" as you pay things off encourage you to continue. However, you pay more in interest going that way, because let's face it, very few people are actually going to be out of debt in 2 years or less. His examples are all highly unrealistic too. He uses numbers that no one would ever have. There are also a ton of Bible verses, so if you aren't Christian/religious, you might see that as a turn off. Most of his examples are also people just praising his method over and over again. It's a big infomercial. Very little content, lots of tooting his own horn.

Treat this like an outline to help you reach your destination and not Google Maps holding your hand until you arrive. It's a good way to help get your mind on target so you can figure out a system and get things in order so you can actually make progress.