Today we're going to take a focused look into one of Dave Ramsey's most prolific publications, The Total Money Makeover: A Proven Plan for Financial Fitness.
With Dave Ramsey's total money makeover steps you can exercise your financial abilities in ways you never thought possible and finally get into shape where your wallet is concerned.
Dave Ramsey is a financial advisor who has written books, blogs, and hosted talk shows. He's well-known for his radio talk show called The Dave Ramsey Show, which you can listen to anywhere you listen to podcasts. He even started his own company built on his financial philosophies called Financial Peace University.
The Total Money Makeover is essentially a step-by-step guide for how to go about your own personal money makeover journey. These baby steps are based on Dave Ramsey's key money philosophies.
The Total Money Makeover is written as a financial self-help book. It's an engaging book with lots of real-world examples and stories from real people who have actually gone through Dave Ramsey's total money makeover steps and seen results.
The book also includes a lot of motivational help along with tips and advice. One of the biggest factors that hold people back from taking full control over their finances is the proper encouragement to make necessary changes to their lifestyle.
Dave Ramsey helps provide the financial motivation and advice everyday people need to make financial changes in their life.
The main money advice given in this self-help book is the total money makeover steps to reach financial peace and freedom. In the book,
The first steps in Dave Ramsey's 7 step plan are to basically get your financial life in order. The road to financial stability starts by setting up your finances in a stable, long-term way. This begins with setting up a beginner's emergency fund of at least $1,000.
Once your starter emergency fund is in place, it's time to focus all other monetary efforts toward annihilating all your debts with a method called the debt snowball.
The debt snowball means you start paying off your debts from smallest to largest. By starting with the smallest debts first, this debt payment method designs a sure-fire way to pay down all your debts fast. He also recommends you save paying off your mortgage for last since your mortgage is likely to be the largest debt you have.
Now that you've thrown everything you have at all your debts and gotten rid of them, it's time to save 3 to 6 months of expenses for a more official emergency fund. An emergency fund of this size will ensure that you have months of expenses put away in case something happens to your circumstances or your job.
After getting set up with your emergency money and getting rid of almost all your debt, it's time to focus on an important aspect of finance—retirement funds. Start saving money in a Roth IRA or in some other kind of retirement savings plan. One of Ramsey's solutions for retirement savings is to invest 15% of your monthly income on a retirement fund.
When it comes to financing, it's important to take care of yourself first so that you can better take care of others. If you have any children, now is the step where you can start saving up a college fund for your child so they can avoid student loans.
At this point in the Dave Ramsey 7-step plan, it's time to take care of the final debt repayment—the home mortgage. Paying off the home mortgage is easier too because you already paid off all your other debts in the previous steps.
At last, it's time to build wealth and continue saving. A big part of the Dave Ramsey financial lifestyle is to be able to pay for everything in cash. This means you'll need to continually build up your financial stores so you have the money you need. There are many ways to build up wealth like investing or building financial assets and resources.
Dave Ramsey's primary goal in his book is to help people get out of crippling debt and stay out of it for good. Many of the good points of this book lie in the financial stability and independence Ramsey's steps help readers achieve.
But remaining completely debt-free isn't always possible. Paying for everything with cash is also not always possible. Ramsey solutions are simple and helpful, but not always manageable for all people.
The Total Money Makeover teaches a lot of important lessons on planning and prioritizing. It can be difficult to pick and choose which financial aspects are more important than others.
A good idea is to sit down and make a list of all the aspects of your personal financing and then list them in order from most important to least important because this list might look different for some people than others. Then you can start making plans for how you'll address each aspect of your financial priorities list.
For most people, minimizing debts, saving money, and building wealth is going to be in similar places priority-wise.
The major con of The Total Money Makeover steps is that not everyone is able to completely avoid using credit and loans. Dave Ramsey may believe in using only cash to pay for things but there are advantages to using credit cards and loans. When used responsibly, using credit can help boost your credit score and get you the things you need to have a comfortable life rather than waiting years to save enough.
Credit cards can also provide lots of perks outside of boosting credit scores. Some credit cards come with special points that can go toward paying for things like groceries and traveling.
People enjoy Dave Ramsey's teachings because he doesn't pretend that money is what brings happiness. He's realistic and believes that money is a tool to create stability and contentment in our lives, not the secret solution to all our problems.
He eloquently tackles many mental barriers and misconceptions many of us have about money and works to not only change your behavior with money but your perspective about money as well.
So, when you read this book, be prepared to gain a whole new outlook on the purpose of money, and break free from comparing yourself to others.
Payday Loans are also commonly referred to as Cash Advances, Payday Advances, Payday Advance Loans, and Fast Cash Loans. Check City does not usually utilize traditional credit checks as part of the payday loan approval process. However, Check City may, at its discretion, verify application information by using national consumer loan underwriting databases that may include information relating to previous cash advance transactions that Check City may take into consideration in the approval process. Actual loan amounts vary. See Rates and Fees for specific information and requirements. Products or services offered to customers may vary based on customer eligibility and applicable state or federal law. Some customers applying for payday loans or installment loans may be required to submit additional documentation due to state law and qualification criteria. CheckCity.com provides loan services in: Alabama, Alaska, California, Hawaii, Idaho, Kansas, Missouri, Nevada, Texas, Utah, Washington, Wisconsin, and Wyoming. Customer Notice: A single payday advance is typically for two to four weeks. However, borrowers often use these loans over a period of months, which can be expensive. Payday advances are not recommended as long-term financial solutions. Loan proceeds issued through our website are generally deposited via ACH for next business day delivery if approved by 8pm CT Mon. – Fri.
Check City acts as a credit services organization/credit access business (CSO/CAB) in Texas.
This is an invitation to send a loan application, not an offer to make a short term loan. This service does not constitute an offer or solicitation for payday loans in Arizona, Arkansas, Colorado, Georgia, Maryland, Massachusetts, New York, Pennsylvania, or West Virginia. Tosh of Utah, Inc. dba Check City Check Cashing, a payday lender, is licensed by the Virginia State Corporation Commission. License #PL-57 Anykind Check Cashing, LC. dba Check City, a payday lender, is licensed by the Virginia State Corporation Commission. License #PL-21 Maximum funded amount for payday loans or installment loans depends on qualification criteria and state law. See Rates and Terms for details. Utah Customers: For consumer questions or complaints regarding payday loans and/or title loans you may contact our Customer Service Department toll-free at (866) 258-4672. You may also contact our regulator The Utah Department of Financial Institutions at (801) 538-8830.
Please see Rates and Terms to check the availability of online loans in your state. Check City does not provide loan services in all states.