Recently I wrote a quick introduction to Dave Ramsey. Now, I thought it would be appropriate for me to review his most popular book, The Total Money Makeover. This isn’t a book on how to invest your money, or how to get a great rate on a home loan. This book is more about Dave’s overall approach to personal finance. Dave’s Total Money Makeover really isn’t that detailed. There aren’t tons of facts to memorize or anything. Actually, about half the book is motivational stories from people who have used his system. If you’re currently in debt, though, it’s probably one of the best books out there.

If you live like no one else, later you can live like no one else.

Dave Ramsey Total Money MakeoverThat’s Dave’s motto, and he really sticks to it. Dave’s system is all about making short term sacrifices, getting out of debt, and paying for everything with cash. Before addressing the how-to, Dave first digs into the hurdles that keep people from achieving personal financial success. All of Dave’s principles are rooted in the fact that personal finance is 80% psychology, 20% knowledge. Nearly everybody knows what they should do, but doing it is a completely different thing. I think that becoming financially fit is similar to becoming psychologically fit. We all know that we should eat healthy and exercise often, but doing it is entirely different.

The first hurdle that Dave Ramsey addresses in denial. Having debt and living paycheck to paycheck has become “normal”. I think that denial is the #1 hurdle that is keeping people from achieving financial freedom. It’s easy to trick yourself into thinking that not paying off the credit card this month really isn’t a bad thing, because you’ll pay it next month. Or that you should get the latest iPod, because you work hard, and you deserve it. I know I’ve done both of these things.

Dave next addresses debt myths. You can’t deny the fact that history shows us that twisted logic, if repeated often enough and loud enough, can become the accepted norm. Debt is sold to us so often, that some debt has become known as “good debt”. We all know what “good debt” is, right? Mortgage loans and student loans are the two that immediately come to mind. Dave believes strongly that there is no such thing as good debt. He won’t yell at you for having a mortgage, but all other debt is strictly off-limits.

Thirdly, Dave Ramsey brings up what he refers to as money myths. Dave subtitles this section, “the (non)secrets of the rich” because that’s what they are. There are no secrets to becoming rich, just like there are no secrets to losing weight. People are constantly looking for the magic pill that will help them lose weight, or the DVD set that will help them generate a six-figure income while they work four hours per day. Many Americans continue to buy lottery tickets, since “somebody’s gotta win.”

The last two hurdles are ignorance and keeping up with the Joneses. High schools teach almost nothing about money, yet many of those students will go directly to work. They won’t pass go, they won’t collect $200. The fact that you’re even reading this ensures that you’re not ignorant when it comes to money. The ignorance factor plays right in with keeping up with the Joneses. The Joneses might have a cool car and take awesome vacations, but they’ll have that car payment their entire life and they are paying for their vacation with a credit card.

The Baby Steps

After going through what Dave considers to be the main hurdles to achieving financial independence and completing your total money makeover, he introduces his popular Baby Steps. Dave Ramsey has compiled a list of seven goals, which he calls his Baby Steps. Your can do anything you want in life as long as you have defined, manageable steps (goals) to get there. If you follow and complete each of Dave Ramsey’s Baby Steps, you’ll be debt-free and financial independent. As you complete the Baby Steps, the idea is that you’ll focus on that one goal with all of your efforts. If you’re saving for an emergency fund, you should be doing only that. Most people fail at their finances because they try to do too many things at once. If you’re working to save money for an emergency fund while paying down debt you’re going to feel like you’re not making any progress because your efforts (and money) will be divided. Click on this link to check out the Total Money Makeover Baby Steps in detail.


Dave Ramsey’s Total Money Makeover delivers big in the motivational department. There are testimonials littered throughout the book from people who have had success after implementing Dave’s Baby Steps. If this book doesn’t get you motivated to achieve financial independence, I don’t think anything will. The Total Money Makeover also delivers on explaining the “why” for many of the things Dave proposes, whether in his other books or on his radio show. However, some people may want a more practical, how-to book. The Total Money Makeover is Dave’s “why” book, and Financial Peace University is his “how to” book/course. This book is absolutely worth buying if you’re unfamiliar with Dave Ramsey. I think it’s still worth buying if you are familiar with him too and these types of books interest you. However, if you want more of a how-to book and you were only going to buy one Dave Ramsey book, I think that Financial Peace University is the way to go.