The total money makeover

I admit, I am a skeptic when it comes to books promoting fixes, especially those quick and easy ones. Follow these ten steps, they promise, and you will lose weight, earn more money, and achieve whatever else you are after. My impression of such books is that they offer commonsensical advice, but present it in an overblown way. However, every now and then a book comes along that is worth reading. Such is the case with The Total Money Makeover.
Few of us receive explicit advice or training when it comes to managing money. The availability of credit, particularly in America, makes it easy to push financial planning aside. Easily accessible credit cards give us a false sense of security, that is why we spend more than we can afford. The book offers some sobering advice, and cites equally disconcerting statistics. People with credit cards spent on average 18% more than those with comparable income but paying cash. It is convenient to swipe a card, it is painful to give your dollars to someone else.
The main premise of the book is that debt is not a wealth building tool. Contrary to popular belief, Dave Ramsey convincingly argues that income is what allows us to create wealth. Debt usually leads to more debt. The author outlines several steps that one should follow to achieve financial independence. First, you should save aside $1,000. This is your emergency fund and should only be used for emergencies, not Christmas shopping. Many people have a very hard time saving $1,000. For some it might take even a year of saving before the can move to step number 2. The next step is to pay off your debts, except the house mortgage. Even if your debt is “just” $10,000 it is difficult to pay it off. It might take you 2 – 3 years before you can move on. Step three is about saving six months worth of your income. If you make $4,000 a month, then you need to set aside $24,000. It is only from this point on that you can invest in your retirement, attack you mortgage, and start a college fund. 
The Total Money Makeover is not a quick fix. It asks people to commit for the next 20-30 years, depending on when you start. The book does a marvelous job of identifying what lays at the heart of your financial troubles – it is you. You spend more than you make, and you continue to borrow. Dave Ramsey does not mince words but his plan has resonated with many. His framework is easy to understand, but difficult to follow. It asks people to make big sacrifices: sell your car if you have to, get another job, buy less stuff, and above all else start a budget. Those without a budge aim at nothing and they hit it every time. If you are serious about becoming debt free, this book is an absolute must.

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