★ Rockstar Book Review: “The Total Money Makeover”

Posted January 13, 2017 6:00 am by with 4 comments

Book:
Dave Ramsey
Price:
$14.99

Reviewed by:
Rating:
4
On January 13, 2017
Last modified:January 13, 2017

Summary:

I would recommend this book for anyone who carries any amount of consumer debt. Its message is powerful and persuasive, and it’s supported by worksheets and other motivational tools.

total money makeover review

This is part of our Rockstar Book Review series.
Be sure to check out all previous books we’ve covered!

“The Total Money Makeover” by Dave Ramsey

rockstar rating 4 stars

Who it’s for: Anyone who has debt and is looking for both the motivation and the system they need to get it paid off.

Readability: HIGH. Ramsey’s writing style, the book’s clear objectives and organization, larger font size and the success stories it contains make it an easy read, despite clocking in at 200 pages.

What I liked about it: Ramsey’s TTMM offers a no-nonsense approach for household money management. His instructions are clear, as is the rationale for his recommendations. Dave takes the reader through his plan, baby step by baby step, from denial all the way to financial security, debunking money myths along the way. I also like that the advice he covers in this book is supported by a daily radio show that takes caller questions and shares success stories from families who have successfully become debt-free as a result of his program.

What I didn’t like about it: The book is preachy in all senses of the word* (though he does offer a warning about that fact right up front) and includes tenets that few would appreciate, such as renouncing the use of credit cards, dismissing the value of a credit score and a strong focus on home ownership. I also dislike the lack of information about fee-only advisors and the strong focus on mutual funds vs. lower cost options, not to mention the stated belief that a steady 12% return is a realistic return for most investors, or even as a total market return, making it possible to live off 8% of the total investment base annually!

*Ramsey’s start in publishing was with a book called “Financial Peace.” His marketing is strong with Church groups in North America, with many congregations supporting his program (including its strong focus on tithing, of course).

Find it @ Amazon for $14.99 || Free at the library :)

“The Total Money Makeover” – Solid Advice for Those of Us Who Seek Financial Security

The author is a straight shooter. Right from the start, he makes it clear what the book is and what it is not. He also acknowledges that there’s something in it to offend just about anyone. I find that quite refreshing. Dave also writes as he speaks, which means that anyone who likes his style is likely to find this book entertaining.

Here’s an example:

Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change. When it comes to money, we can be like the toddler in a soiled diaper. (pg. 14)

Beyond its edutainment value, TTMM is first and foremost a how-to type book, taking a reader through the stages of financial management from reality check to true financial wellbeing, often using physical fitness as a metaphor and real life success stories to help convince readers that financial freedom is achievable.

This well-known Ramsey quote sums it up nicely:

If you will live like no one else, later you can live like no one else. (pg. 5)

The 10 Steps of “The Challenge”

The following are the steps you’ll find explained and supported in this book, which he calls “The Challenge” and which are in line with his now-famous Baby Steps:

  1. Addressing Denial
  2. Rethinking Consumerism (a.k.a. addressing the need to “Keep Up with the Joneses”)
  3. Building a $1,000 Emergency Fund (Baby Step #1)
  4. Eliminating Consumer Debt (“The Debt Snowball” a.k.a. Baby Step #2)
  5. Building an Emergency Fund of 3-6 Months of Expenses (Baby Step #3)
  6. Investing in Retirement Savings (Baby Step #4)
  7. Saving for Kids’ College Fund (Baby Step #5)
  8. Paying off the Mortgage (Baby Step #6)
  9. Building Greater Wealth & Prosperity (Baby Step #7)
  10. Reaching the Pinnacle Point (ability to live off 8% of the household nest egg)

The steps and the advice listed above are sound for the most part (I’ve already noted some objections in the summary above). Anyone who follows this advice will find themselves well ahead of the Western norm for household financial management.

[I]f the Joneses (all the broke people) think you are cool, you are heading the wrong way. If they think you are crazy, you are probably on the right track. (pg. 100)

total money makeover back cover

I offer one additional cautionary note regarding the strong emphasis on home ownership (which is prominent in the book due to the strong psychological benefit of owning the roof over our head): Given the wild ride that has been real estate over the last decade or so, especially in larger urban locales, smaller square footage apartments are becoming an increasingly-favorable option. It’s an option that can spare a number of individuals from the pain of finding themselves house poor.

Yes, owning a home free and clear is wonderful, but it is not a requirement in achieving financial security. A house is an asset first and a poor performer as an investment, given the maintenance requirements and the fact that a significant portion of a family’s net worth is “locked in” and inaccessible without getting into debt to tap into the equity (which would defeat the purpose of pursuing financial security in the first place).

The Bottom Line

I would recommend this book for anyone who carries any amount of consumer debt. Its message is powerful and persuasive, and is supported by worksheets and other motivational tools. It offers everything we need to convince ourselves to take and sustain real action.

Where you can find the book: Amazon ($14.99)
Where you can find the author: DaveRamsey.com

For other books in this genre, I would suggest “I Will Teach You to Be Rich” by Ramit Sethi, “Dear Debt” by Melanie Lockert, “Your Money or Your Life” by Vicki Robin and Joe Dominguez, “The Automatic Millionaire” by David Bach and “The Wealthy Barber” by David Chilton.

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Hélène is Rockstar Finance’s Curator of Books, and Blogger at FreetoPursue.com. A perpetual student, speaker, writer and coach, you’ll often find her reading, researching or writing. She also likes travelling and hanging out with her husband and their couple of furry four-legged friends.
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4 responses to ★ Rockstar Book Review: “The Total Money Makeover”

  1. Mrs. Picky Pincher January 13th, 2017 at 10:29 am

    While I did use Dave Ramsey’s Snowball Method to pay off our credit card debt, he’s not my favorite money writer. I don’t like his tone, but I also don’t like the focus on home ownership–you can save plenty of money renting vs owning, especially in certain markets.

    Anyhoo, a lot of his stuff is worth a good read, but it should be taken with a grain of salt.

    Reply

    • Hélène Massicotte January 13th, 2017 at 12:14 pm

      Sounds like you got some useful info from him, which is always a plus. I understand what you mean by his tone. It’s a bit thick in the “I know better than you ever could” department. But, as you said, “a lot of his stuff is worth a good read”.

      Reply

  2. Kathy January 13th, 2017 at 1:37 pm

    Although we’ve been out of debt long before Dave Ramsey became popular financial guru, I still got his book (I’m a personal finance junkie). I really like most of what he says regarding debt. While his approach to credit cards is not realistic for most people, it is probably valuable for those who cannot resist the temptation to purchase some unneeded item on credit. His debt snowball is a method that gives incentive for people to continue on their payoff plan because it gives them reward through seeing balances on bills become zero. However, I do NOT like his investment advice. He doesn’t appreciate that some people do not have the intestinal fortitude to be in the stock market, My mom, for example, lived through the depression following the market crash in 1929 and would have lived in fear if that was where her money was. Ramsey hates her preferred method of investing through CDs. And his 12% rate of return every year is certainly nonsense. As I said, read him for his debt advice, Do not read him for investing advice.

    Reply

    • Hélène Massicotte January 13th, 2017 at 2:16 pm

      Agreed. His debt reduction advice is what’s particularly solid. If most people did that, we’d all be better off…by a long shot.

      Reply

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