Total Money Makeover is a best-selling book with 5 stars reviews by Dave Ramsey, a well-known finance coach. With its simple, practical seven-step plan, it has helped millions become debt-free.
Dave Ramsey, like no one else, put his 20 years of financial teaching and counseling into seven well-organized baby steps that will get you out of debt and help become financially free.
In this article, you will learn all about:
- Who is Dave Ramsey
- The book: Total Money Makeover – a way to build up money muscles with America’s favorite finance coach
- Is the book really as good as they say?
- An alternative way of saving up
It’s All About the Money-Saving
Money problems and an unsure financial future loom large in people’s minds. Many try to find the best way to avoid all of these issues and manage their personal finances to successfully build wealth. However, sometimes there is a need for a personal finance expert, who will put us on the right path to financial peace. It’s been proven that saving money is a safe way to avoid not only debt but also maximize retirement investing. In today’s feature, we will take a closer look at Dave Ramsey’s proven plan for financial fitness.
Few Words About the Author
Dave Ramsey is a personal financial advisor, radio show host, author, and businessman from the United States. He also hosts the nationally syndicated radio show The Ramsey Show. Ramsey has authored several books, including the New York Times best-seller The Total Money Makeover, which received 5 stars reviews, and hosted a Fox Business television show from 2007 to 2010. He also appeared on many popular shows such as Good Morning America, Fox News, and CNN.
The Magic Book – Total Money Makeover
The Total Money Makeover helps you to avoid any fat and flabby expenses and dangerous money myths and instead gives you a sure-fire plan to turn a skinny little bank account into a bulked-up cash machine.
Steps to Financial Stability
Set aside $1,000 for a starter emergency fund.
This first step of securing an emergency fund will change the way how you deal with your assets and help you create a well-toned budget.
Using the debt snowball, you can get out of debt.
This entails listing all of your debts and sorting them by the smallest to largest amount. Make only the minimum payments on all debts except the smallest. Pay off the smallest debt as much as possible with your available funds. When you have paid off your smallest debt, add that money to the payments on your next smallest debt. Do that until all debts, except your mortgage, are paid off.
Make a proper emergency fund of 3-6 months’ worth of expenses.
Finish the starter emergency fund from step one.
Invest 15% of your household income in retirement.
Ramsey advises halting all investment activity, even if you have a 401(k) with an employer match. He puts off investing until after he has established good habits.
Set aside money for college funding.
After you’ve started saving for retirement, you can turn your attention to your children. “Saving for college ensures that a debt legacy is not passed down your family tree,” Ramsey writes. To save for your children’s college education, you should use an Education Savings Account or a 529 plan.
Pay off your mortgage early.
After you’ve taken care of everything else, it’s time to take one final, massive step. Ramsey recommends prepaying your mortgage. He is aware of the possible difficulties, but he believes it is a wise decision in any case.
Create wealth and be generous
Once you’ve paid off your debts and started saving for the future, it’s time to start building your wealth. Use the advice from experts, such as tax advisors, CPAs, estate-planning attorneys, and so on, who can provide you with sound advice on what you should do with your money.
Conclusions:
Total Money Makeover is for people, who want to improve their financial situation by taking seven steps that will put them on the road to debt-free and financially successful living. Ramsey’s seven stages to financial independence are at the heart of The Total Money Makeover. Readers gradually progress from debt to wealth by following these in order and not moving on to the next until the current step is completed.
Is Dave Ramsey’s Book Really That Good?
Pros
Dave Ramsey places the responsibility for taking control of your finances squarely on your shoulders, rather than blaming external factors. The baby steps emphasize that taking ownership and taking action is the most productive thing to do.
As mentioned by the pro above, baby steps encourage you to act now rather than later. There is no reason to wait until next month or next year; everyone can begin taking baby steps today.
The steps are simple and designed to be completed one at a time, making it easier to succeed and giving you a reason to celebrate along the way!
There are numerous success stories available from people who did a Total Money Makeover challenge
Cons
Baby steps rely on behavior rather than math. They aren’t for everyone and they should be more flexible. The baby steps are supposed to be simple, but some important items, such as getting insurance, saving for a house, and tracking your finances, were left out of the framework. They are implied throughout the process but are not stated explicitly in their own step.
Financial Freedom in a Different Way
The Infinite Banking Concept
Infinite Banking allows you to operate and borrow money in the same way that a traditional bank does, but without relying on a third party. You will be a creditor as well as a lender.
Instead of borrowing from a bank, you borrow money against yourself and control your cash flow while still allowing your whole life insurance policy to earn dividends (money) even though you are using it elsewhere. In other words, you accumulate wealth by borrowing and repaying the cash value of your permanent life insurance policy.
One of the most significant benefits of a whole life insurance policy is that you will never have to deal with banking fees or loan interest rates. You can borrow money as a policyholder by using your policy’s cash value. You will never have to borrow money from a bank again if you use this borrowing setup (your whole life insurance). As a result, you are your own bank now.
Infinite Banking’s goal is to replicate the process as much as possible to increase your own bank’s value. The lending and repayment of money typically held in the cash value of a permanent life insurance policy occurs during the duplication process.
The infinite banking concept enables you to better work towards your individual and unique financial goals for yourself and your family, as well as have control over your finances without having to deal with banking fees or loan interest rates.
Final Thoughts
We hope that we have assisted you in becoming acquainted with Dave Ramsey and his guide to upgrading your financial life, “Total Money Makeover – A Proven Plan for Financial Fitness.”
However, consider the personal banking system if you want to get life insurance while also changing your life and gaining financial freedom.
Watch Our FREE Masterclass
We can teach you how to manage, make, use, and multiply your money completely independently using your whole life insurance and the system we call Lifestyle Banking.
Lifestyle Banking is a personal banking system that can help you erase your debt and create a cash flow using the same things you’re currently doing. You don’t need to change your lifestyle to achieve your financial goals, you only need a money mindset shift and the right system to accomplish that.
We know Lifestyle Banking is the right system because we and our clients have been using it for years. We’re an open book, and we talk about different strategies and ways how to use this system in the most beneficial way.
Watch our free masterclass, and you will know it too.