Book Summary – The Total Money Makeover – A Proven Plan for Financial Health – By Dave Ramsey

Bottom line, buy this book. Financial stress is the biggest threat to our nation right now. People run scared every day as unemployment rises, the value of a dollar declines and good paying jobs disappear. Dave outlines everything he needs to do to go from broke to financially fit. If you haven’t read or heard of Dave, you’ll like him because he brings a southern common sense to his work. My grandmother was from Georgia and she had a fifth grade education and she had more southern common sense than anyone she’s ever met. Dave is the same.

Why is this important to me? Watch this and you’ll see why control of your money and finances is essential. Divorce rates in this country are over 50% and the number one cause is financial stress. Dave talks about women having a security gland and the need to have secure finances. When the future is uncertain in terms of life, education and family, women tend to be more affected than men. This inherent difference in the cases stresses and therefore divorces. Dave discusses how to handle this a bit in this book and in much more detail at Financial Peace University. What happened to the WORD of the people? There were 1,593,081 bankruptcy cases in 2010.

I think my grandparents are happy to be in the other world because SOME people in this country have lost their self-respect and have huge rights issues. I don’t like to make sweeping judgments and understand that some bankruptcies are unavoidable due to medical problems or trauma. I have no problem with that, but there are a lot of lazy people out there who think they can wipe the slate clean and start over. Worse than that, they’ve done it more than once. This is like a part-time Catholic cheating on his wife but asking for forgiveness at Sunday Mass every week. He imagines that he can start again. This is wrong.

This book is packed with great information that, if followed, is designed to get you out of debt and into financial shape. For the sake of time, I will highlight certain sections and the myths that Dave describes.

1. Financial fitness is 20% how and 80% behavior. The concepts are really simple, but it is the behavior that is difficult. I can outline a diet and fitness plan for anyone in 5 minutes that will produce results. The question is will it produce results for you, i.e. will YOU do the work??????? Shocking statistic: 90% of Americans buy things they CANNOT afford.

2. Emergency Fund: How many people have funds available for 3-6 months in case of an emergency? I was very lucky to grow up with a financially astute father. I thought I was 5 years old again reading Dave’s book because all the things that are taught in the book were taught to me at a young age. I realize that not everyone is so lucky. The horrible statistic is that most Americans are 2 weeks away from financial collapse.

3. Dave describes a myth that is very real. The myth is that if you lend money to a friend or family member, you are helping them. In reality, if you lend them money, the relationship will be strained or destroyed. The only relationship that would improve is the one that results from one party being the master and the other the servant.

4. Golden rule: the borrower is always a slave to the lender.

Dave has a mindset that says: You need to be intense like Gazelle when it comes to your financial health. You must recognize that it is your behavior and your approach that will dictate whether you become financially fit. If you’re in financial trouble, then the “how to” steps outlined in the book work.

1. Create an emergency fund.
2. Address your debt.
3. Save 15% of your money
4. Delete all payments
5. Give
6. Imagine a life without payment and with all the income… Victory!!!

These 6 simple steps are easy to understand but difficult to follow. As you know, most people will not follow these steps. That is why people bet and play the lottery. One of Dave’s rants that I agree with is, “The lottery is a tax on the poor and people who can’t do math.”

Remember: “Where focus goes, energy flows.” If you find yourself in a financial mess, I recommend that you start with this book and change your mind to fix it.

Live like no one and then live like no one is a brilliant saying. Basically, this means that you must be disciplined and sacrifice now for financial freedom and security later in life. Remember that if you are nervous about your finances now, it will only get worse as you get older. Most people don’t think about their health and energy until they start to lose it. If you HAVE to work until you’re 70 because you don’t have any money, then that’s a horrible thing. If you work at 70 because you love it and you don’t have to, then that’s a blessing. Which one do you want?

I hope you found this short overview video helpful. The key to any new idea is to work it into your daily routine until it becomes a habit. Habits are formed in as little as 21 days. One thing you can take away from this book is to look at yourself in the mirror. Denial affects you like poison. If you have financial problems, admit it and commit to doing something about it NOW. Schedule 15 minutes every day toward your financial education to fix the problem NOW.