25 October 2011

Book Review: "The Total Money Makeover" by Dave Ramsey

Quick review


Summary: This is definitely not a get-rich quick guide. Instead, using this book will help you gradually eliminate debt from your life and start your wealth-building engine.It will also be the smartest money you've ever spent, but only if you actually read the book and complete its worksheets.

Full review

I've been a big of Dave Ramsey's The Total Money Makeover for several years now. I don't recall who first recommended it to me, but I know that it changed the course of my life, especially my outlook on my finances.

In broad terms, the book's title describes its aims very well. Ramsey's goal is to completely rework your relationship with money. That's a challenging goal, especially with many American's mindset about debt being okay.

Ramsey starts the book by exploding some myths about personal finance and debt, and provides some worksheets and questionnaires for you to explore what ingrained money beliefs you have that are hindering your ability to live debt-free.

Chapter 2 tackles most people's denial of how precarious their financial situation is. More worksheets help you figure out your money income and outflow, assess your debts levels, and so on. One especially helpful thing is a section asking you to think about "what would you do if this happened".... It's very helpful in order to get you thinking about how your financial well-being can change in an instant.

Chapters 3, 4, and 5 continue refuting money myths that you may have, each chapter addressing a different area. While this may sound like a lot of "theory," it's really not. It' quick to read, and if you do the worksheets, you'll come to some amazing realizations about money in your life.

Finally, in Chapter 6, Ramsey gets to the first of his "baby steps" for the Total Money Makeover, which is setting up a beginning emergency fund. The subsequent chapters continue the program, discussing how to:

  • eliminate your debt
  • expand your emergency fund
  • save for retirement and your kids' college
  • pay off your home mortgage early
  • build wealth

In the original 2003 edition of The Total Money Makeover, the book concluded with thoughts on how to live your life once you're through all the steps, are debt-free, and are becoming wealthy. The new 2009 version of the book follows that chapter with a section of motivational stories of real people who made it through the program.

Ramsey's style throughout the book is similar to how he speaks on his radio talk show. He's direct and forceful, and not afraid to call things like they are. That's not to say that he's unpleasant to read (or listen to); rather, he just knows most of the typical excuses, and won't let people hide behind them. If it's unpleasant reading, it's because it can be hard to face things in your life that are not working, and many people's personal finances fit that bill.

Ramsey is also a Christian, and his faith shows up in a few instances throughout the text. Nevertheless, it's not at all preachy. I see it as a strength in the book, and it's hard to see that many readers would take notice.

As noted above, there are plenty of worksheets and questionnaires in the book. Some case studies are sprinkled throughout the text, which help inspire you to keep moving forward with your Total Money Makeover.

With a good-sized typeface, The Total Money Makeover clocks in at just around 250 pages. That makes it a quick read, were you to just read through it without doing the worksheets. Of course, that very much defeats the purpose.

That said, there is an abridged audiobook version, which you can used to quickly get through the whole book. It's listed as an abridgment, but I believe that's mainly because they leave the worksheets out of the narration. I've used the audiobook as a refresher course, mainly to see if my thinking has drifted back into old thinking.

It's worth the investment to get this book, and also to spend the time answering every question and filling out all the worksheets. You'll truly gain a new perspective on yourself and your life. You may even realize that there are things more important than money or material things in life.

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