Sundays are for Book Reviews: The Total Money Makeover

As we celebrate freedom here in the United States today, my mind is on another kind of freedom — financial freedom. How many of us have dealt with apprehension and unease when it comes to money? How much time have you spent wondering how you can get out of debt? How many times have you worried over the financial aspect of your future?

The good news is that you can achieve financial freedom, and author Dave Ramsey has laid out a road map for getting there in The Total Money Makeover. By dispelling certain myths that we as Americans have about money, debt, and financial needs, Ramsey sets the stage for a “total money makeover” that consists of seven important steps…

1. Save $1000 fast.

2. Pay off all debts. (Excluding your mortgage.)

3. Build up an emergency fund that will cover three to six months of expenses.

4. Maximize retirement investing.

5. Invest for college.

6. Pay off your home mortgage.

7. Build wealth — make your money work harder than you do.

I hesitate to even type out these steps by themselves, as the accompanying chapters that Ramsey writes for each step are so crucial to understanding the process and really can’t be missed. But for reference, these are the seven steps he fleshes out in the book, and he insists that you follow the steps in this order to maximize your savings and investments. It’s not a quick process, but when carefully followed, Ramsey insists that you will have a financially secure future by the time you’ve reached the end.

Wes and I were introduced to a similar way of thinking nearly a year ago, thanks to Crown Financial Resources. (Which we highly recommend!) Reading this book, though, has given us an even more concentrated focus on saving and building up investments. When we consider the expenses of home ownership, college savings, retirement, and just day to day life on just one income, it can all seem very daunting. This book makes it seem more possible, and after following the principles (even those that seem so completely radical to our American way of thinking, like eliminating all credit card use and NEVER taking out a car loan/lease), the results speak for themselves. We’re just learning how to “tell our money where to go instead of wondering where it went,” as Ramsey continually says, and we’re encouraged by the many testimonies included in the book of those who have completed the process and are financially secure. What a challenge!

How about you? What financial planning resources do you recommend?

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