The Summary of Dave Ramsey’s Total Money Makeover
Dave shows you how to get out of debt and start saving for the future. This book shares the commonsense principles that have helped millions discover how to take control of their money and change their lives.
Who this book is for?
This book is written for people who want to get out of debt or stay out of debt. It’s also great for people who want an overview of the various aspects of personal finance.
Why this Book was Written?
Dave Ramsey wanted to help people take control of their finances. He has spent over 25 years helping others become financially free through his mentoring, teaching, teaching materials, software programs, and the television show “The Dave Ramsey Show” which I watch very often on Youtube. His writing style explains things in an easy-to-understand language without talking down to the reader. This way, they would not feel humiliated.
What is Total Money Makeover?
The Total Money Makeover is a set of steps that will teach you to stop accepting debt as normal and how to eliminate it in incremental steps. It teaches you that success doesn`t come overnight, but rather can be built with time.
What is the Goal of Total Money Makeover?
The goal of the book is to help people find financial peace. It is a step-by-step guide that will teach you how to get out of debt, save money, and build wealth.
How to Get Started with Total Money Makeover?
I’ll tell you about how I am getting started with Total Money Makeover.
One of the most important points to me that Dave mentions in the book is about budgeting. It is you telling your money where to go. Taking control of your finances starts with something as simple as that.
Every month I will be creating a budget and identifying, my income, and planning where that money goes. First goes the expenses, followed by adding a portion to an emergency fund. Followed by investing some into stocks and crypto-assets and the remainder I will save or spend.
It is really important to note that at the end of the month your balance must be equal to 0. By that I mean, throughout the month things will happen but you should always make the effort to rebalance your budget so that you don’t spend more than you planned to.
For example, my income is $2,000 at the start of the month. After paying off my monthly expenses I'm left with $1,200. I decide to allocate the remaining $1,200 in an even split between investing, contributing to my emergency fund, and spending. That’s $400 on each. If an unforeseen expense occurs and I have to spend $200. I will have to reallocate the remainder of my budget.
Simple to explain but I know it may not be that simple. However, adopting the habit of budgeting and committing to it I believe will go a long way.
What are the 7 Baby Steps in Total Money Makeover?
The Total Money Makeover is a seven-step process that teaches people how to take control of their money. The steps are:
1. $1,000 emergency fund
2. Debt repayment plan
3. 3–6 months expenses in savings
4. College funding for children/grandchildren
5. Long-term care insurance for parents if they need it
6. Invest 15% of household income into Roth IRAs and pre-tax retirement plans
7. Build wealth and give generously
How Does Dave Ramsey’s Plan Work?
Dave Ramsey’s plan is one of the most popular budgeting plans in America. Dave Ramsey’s plan has been around since the 1990s and it has helped millions of people get out of debt.
Dave Ramsey’s plan is a 7-step process that starts off with paying off all debts except the mortgage, saving up an emergency fund, and then building wealth through investing.
A lot of people are interested in this plan because it provides a clear roadmap to achieving financial freedom.
Why You Should Read Total Money Make Over
This book is not just for people in debt, but for anyone who wants to take control of their finances. It is a step-by-step guide on how to get out of debt and stay out. It doesn’t matter if you’re in $5,000 worth of debt or $50,000 worth of debt, this book can help you.
This book will teach you how to identify your money personality and how it affects your financial decisions. It will teach you what skillsets are needed to be successful with money management and what skillsets might be holding you back.
Be sure to check out the book I will leave the links below and also be sure to check out the Dave Ramsey show.
