The Total Money Makeover

Overall, having blazed through this book in just a couple of hours, I can completely understand the appeal in following Dave Ramsey’s guide to becoming debt free and attaining financial freedom. While Dave’s plan isn’t the quickest path to financial freedom, mathematically, it utilizes the human element of debt payoff with quick wins, and positive reinforcement to make the journey more bearable.

Dave’s book seems like it would be a good fit for anyone at any point in their life, whether you’re a 45 year old single parent of three drowning in debt, or a 22 year old recent college graduate with a six figure income. I actually liked this book more than I expected, and that says a lot considering I had a preconceived idea of Dave’s approach to wealth.

The Good:

Dave does a decent job of pointing out that this book is based on his personal experiences and isn’t a magical cure to debt. I like that this is stated upfront to help reinforce that if someone is looking to get out of debt, they are likely going to have to change their way of life pretty drastically. He never claims to be a guru for anything, though he does often take the time to remind you that he’s interacted with tens of thousands of families, all in the same assumed boat as the reader.

The approach outlined in the book is an easy to follow seven step plan that anyone can jump into. The reader is walked through many examples of differing circumstances that might slightly tweak how they should handle each step. I also appreciate that the examples are all used from real-world stories, this helped to ground the conversation within the text.

The Bad:

Dave takes the first 97 pages to set the stage for his book. While I understand that he wants the reader to know where he’s coming from, I believe that he could have gotten to the point a lot quicker. You could honestly skip the first five chapters and still get a full understanding of his recommended process. Though I can understand the need for his precursors due to the worlds wide-range of education on the topic.

Starting with the first step, (Save $1,000 Fast), Dave lost me a little - He says that in order to set your life on track, you need to save up $1,000 as fast as possible, whether that means starting a side job, or selling some items. The part that I disagree with is he says to liquidate other forms of money that you might have, like a certificate of deposit or a savings bond, even if you would take a penalty for early withdrawal. He comes across as absolutely terrified of non-cash forms of payment, which I believe he could come to terms with if he spent the time to educate himself on them.

I was nodding along as I read through the second step, (The Debt Snowball), except for two points of concern. The first being that the way Dave says to pay off debt isn’t mathematically the fastest way to do so, though he does admit this in the text. The bigger piece of concern for me though, was that he suggests ending your 401(k) contribution to free up more money to pay down your debt. While at a base level, that doesn’t seem terrible, I think if you take into account that not only are you now losing your (potential) company match, but your 401(k) is also normally taxed beneficially, as compared to your take-home pay.

He also has multiple letters that have been written into him, by families that used his system, to thank him for help with encouraging them to eliminate their debt. The first one actually jumps out at you, and if you’re not familiar with the format, you have to double-check to make sure you didn’t some how miss a few pages. I feel that if he just had a testimonials section at the beginning or the end of the book, they would have made more sense together. The testimonials sprinkled into the text often didn’t relate to the current topic and felt like a random thought just to reiterate that Dave know’s what he’s talking about.

Why Read:

There’s a reason that Dave Ramsey is world renowned for his financial guidance. He is a respected financial planner and talk-show host who has lived the life that he portrays in this book. He himself found himself bankrupt once before and was able to use the very system he writes about to find a way back to being a millionaire. His examples are all of average wage people who were able to focus on paying off debt to eventually become financially free, and they are all relatable scenarios. While I do disagree with his low tolerance for risk, he has created a system for a no-frills, easy to manage system and path to wealth. As a bonus, he provides many worksheets in the back of the book to help plot our your course to financial freedom!