The Total Money Makeover by Dave Ramsey is a simple, no nonsense guide to handling your money. Fueled by his humbling story of filing bankruptcy, Ramsey provides the money lessons he’s learned along his way back to wealth. Let’s examine some key takeaways from the book.
Debt is Dumb. Cash is King.
If you’ve ever listened to Dave Ramsey’s radio show, then you know the phrase “Debt is dumb, Cash is king” is a staple part of the show’s introduction. Ramsey states that your income is your number one wealth building tool and that debt eats away at it in the form of monthly payments. Dave is completely anti-debt and doesn’t recommend the use of debt under ANY circumstances. He champions the “all-cash life” in the book by promoting habits like renting a car with a debit card, paying cash for a vehicle, and cutting up all your credit cards.
Live Like No One Else
One of Dave’s most popular quotes is to “live like no one else so that later you can live and give like no one else.” What he is getting at is if you handle money with intentionality by living on a budget, pay off all debt, and save for the future, you will be able to build enough wealth to take care of your family and meet the needs of others.
The 7 Baby Steps
Ramsey is big on simplicity and process. He outlines his “how” for a total money makeover with 7 Baby Steps. They are the following:
Baby Step 1: Save $1,000
for Your Starter Emergency Fund
Baby Step 2: Pay Off All Debt
(Except the House) Using the Debt Snowball
Baby Step 3: Save 3–6 Months
of Expenses in a Fully Funded
Baby Step 4: Invest 15% of Your
Household Income in Retirement
Baby Step 5: Save for Your
Children’s College Fund
Baby Step 6: Pay Off Your Home Early
Baby Step 7: Build Wealth and Give
The Total Money Makeover is a good read for someone looking for a simple, actionable way to get on track with their finances.