The Total Money Makeover (2003, Thomas Nelson) and Complete Guide to Money (2011, Lampo Press), both by Dave Ramsey, the Financial Peace money guru.
Let’s just do this up front: you either love the Dave Ramsey system or you hate it. You either jump in with both feet and hang on for dear life, or you go in half-hog and never make it. It’s an all or nothing proposition, because it is a financial system. Also, let’s be clear: Financial Peace is a Christian financial system. This does not mean you have to be a Christian to adopt it; the financial bit will work either way. But it does mean that you are going to come across Christian apologetics and worldview, occasionally.
And now I’ll tell you how I ended up sliding this book into my reading list. A couple reasons: one, Dave Ramsey’s financial books are easily listed in both the best religious books and most influential books of our time. Millions of Americans ascribe to his financial system, listen to his radio show, take his courses, and read his books, and many of them claim that it has changed their lives. So these books are legitimate additions. The other reason, though, is that my husband signed us up for a Dave Ramsey class, Financial Peace University, so I was required to read Complete Guide to Money. The Total Money Makeover I had already read, before I started writing reviews for The Starving Artist, and it is listed HERE on my best self-help books list.
So here we are. The class is over. The books have been read. And disclaimer: the Flahertys have deepened our love of and commitment to the Dave Ramsey financial system. If you must know, we are on the band wagon and there we will stay. This is counter-culture, life-changing stuff. I’m a smart person and I agree with the whole shebang. But let’s see if we can’t get a regular ol’ book review out of this.
The Total Money Makeover is a book that I read years ago, and is meant to be read by an individual (or a couple) to give them the complete Ramsey system without taking a class. Of course, the individual could benefit from The Total Money Makeover Workbook and is also encouraged to take a class (which has a pretty minimal fee and includes lifetime membership).
Right from the beginning, Ramsey says that this book is not new information and it is not complicated; it is just a system for doing what your “grandma” did with her finances. Ramsey, the man, was a real estate broker who did all the normal things and ended up bankrupt and financially crushed in his late twenties. Then, he started asking why all his finance professors had been broke and came to a lot of counter-culture conclusions (which incidentally were not counter-culture just a few generations ago) which he turned into a teachable system, and eventually an empire.
The system is based on Seven Steps (which he calls “Baby Steps” and I find to be a misnomer). You do the Seven Steps, completely and in order, and you get out of whatever financial pickle you may or may not be in, no matter how old you are or how much money you make. The book is set up to first lay some concept groundwork, then de-bunk myths about debt and wealth, then walk you through the Steps in detail. I do find myself wondering about people in poverty, of course, and also about people who are just slammed by life. But I have no experience to back me up in this, and Ramsey supposedly does. He says it works every time.
I am the person he refers to in Complete Guide to Money: “Every time I teach on investing, I can immediately spot the… Free Spirits in the room …. They go to their happy places. I can see [them] start to float out of their bodies. Their eyes glaze over, and all of a sudden, they are running through a wheat field or singing in the rain in their minds. They just totally check out” (p196-197). As an artistic type with ADHD, that’s how I feel about finances. But these books are actually written well enough that I only occasionally skip around. Ramsey as an author (and speaker) is interesting and he keeps it fast-paced and simple enough that I actually find it pleasurable to read. There is a lot of new and fascinating information in there, and Ramsey makes sure to throw in stories and personal anecdotes. And if you’re buying in to it, you feel a real sense of urgency, hope, and excitement. That’s not an easy task to accomplish as an author, but it is perhaps one of the main reasons Ramsey has been successful where others have not. Sometimes I groaned at a joke or a phrase or whatnot. It’s true. But mostly the whole thing went down like the proverbial spoonful of sugar and my pen was flying over the page taking notes and making stars and arrows.
As for Complete Guide to Money, let me first say two things: 1) There is no reason why you would need to read both these books. They cover the same ground, basically. 2) This one is meant to be used in conjunction with the class. You could read it on your own (best with the package including the workbook, chart, CDs, etc.), but officially it is the companion book for Financial Peace University.
And I would basically give it the same review. It is well-enough written to keep you engaged and it is concise and fast-paced enough to finish it. The information can be life-changing, it can be hopeful and empowering. At the very least, you should feel more in charge of your financial destiny just by having more information. (Of course, there are plenty of people who would say it is misinformation, and just as many who would disagree with them emphatically, back.)
Having read this book along with the nine week class, I found the classroom experience to be both great and terrible. First of all, the in-class videos are almost exactly the same as the reading material. I had a college professor who used to do this, too, and it drove me crazy then and now. I suppose the repetition is helpful for some people, but to me it feels like a waste of time. Second, going through this controversial material with others is, as I said, both great and terrible. One moment, you watch as people get frustrated or reach mental blocks and get picked off. It totally happens because, let’s face it, this stuff is not for the faint of heart or the lazy or the not-so-sure. But then another moment, I realize that I have found a lot of financial peace from the Ramsey system, just in knowing more about money and being able to put my finger on all our money and financial stuff. If you have a plan and you understand your basic finances, that is much more peaceful than being clueless, in denial, or fearful. And we’re not even half-way through the steps, yet.
I would like to complain about the organization, though, meaning the organization of the books, workbook, and printable charts. It just fell short for me. I kept finding things did not seem as clear as they could or should, and things were missing that I wanted, or included when I thought they were unhelpful. For example, I really needed Ramsey to bold, underline, and highlight the action points. I didn’t need to do a half-way budget a week before completing the whole budget. What good is an incomplete budget? The books clearly try to be straight-forward, complete, and practical, but I think they could have been better in this way. So there was that. You just need to get organized for yourself. I also really think that once you have gotten used to the given budget forms, you need to make your own personalized one. You need to.
I also disagree with Ramsey occasionally, but that won’t stop me from following the complete system. For example, I do think obedience can be at least part of our motivation. I also think that he gets a little sentimental about all of us getting jobs that we love and are great at. But that’s just me; Midwestern to the core. For every opinion that I vary with Ramsey on, there are reservations that I had with him at the beginning which I just plain don’t have anymore, because I changed.
Over all, though, I clearly recommend these books. Finances are the kind of thing that–no matter how you might drag your feet–you do need to understand and to take control of. These books are New York Times best-selling, and millions of people have jumped on the band-wagon, so they are certainly worth checking out. I don’t know what it’s like to read them and decide either to dismiss them or go half-way with them. I assume that experience is not awesome. But I thought they were well worth reading, interesting enough, painless information, and even, I believe, potentially one of the most important books you will ever read.
Ramsey’s other books include:
- Life Lessons with Junior
- Financial Peace for the Next Generation
- More Than Enough
- Smart Money, Smart Kids
- The Legacy Journey
- Financial Peace Revisited
- The Money Answer Book
And here is the one thing that is not in his books but that I really wish was; a complete list of the steps, in order, to financial freedom. This list will vary slightly depending on where you start (like if you own a home or or not, if you are single or have kids, etc.), but this is a great place to start. Add your own notes as you read the book.
- Begin 10% tithe to home church
- Vow to never borrow another penny again
- Vow to never loan money, only give
- Get an accountability partner
- Start Budget Meetings, weekly and/or monthly
- Start Zero-based Budget
- Start Envelope System
- Cut up those credit cards
- Get rid of the car payments
- Check Credit Report once/year
- Okay all significant purchases from now on
- Wait overnight for big purchases from now on
- Don’t buy what you don’t understand from now on
- Stop Retirement Contributions (this is temporary)
- Step 1: Get $1000 in a savings account, for emergencies only
- Put a cushion in your checking account – $250
- Look into HSA and Health Insurance, and get with the program
- Update Life Insurance NOW: term, 10x income or 10x childcare
- Get will done!
- Check Homeowner’s and Car insurance: $1000 deductible and liability >=$500,000
- Get Occupational Disability Insurance for couple years coverage
- Get Long-Term Disability Insurance from workplace and trade org., 60-65%
- Get Identity Theft Protection for restoration services
- Talk to your parents about their Long Term Care Insurance
- Make a Legacy Drawer
- Start your kids in financial education and peace
- Start needed expenses Sinking Fund
- Step 2: Do the Debt Snowball (to get out of debt!)
- Step 3: Save 3-6 months income Emergency Fund in money markets
- Cancel Short-Term Disability Insurance
- PINNACLE POINT! (The point at which this starts being more fun)
- Step 4: Invest 15% gross in Retirement with mutual funds. 1) 401K with company up to match, 2) Roth IRA up to max per person, 3) 401K/Company plan up to 15%
- Step 5: Do your kids’ College Funding – max out ESAs
- Start wants Sinking Fund
- CRUCIAL POINT! (The point at which you don’t want to buckle so close to the finish line)
- Step 6: Pay off Mortgage
- Consider Real Estate (see p.300 or pay cash)
- Step 7: Build Wealth and Give! (Mutual funds: 25% growth, 25% growth and income, 25% aggressive growth, 25% international, >5 yrs old, avg 12%)
- Give offering above your tithe, post-family-needs
- Get Umbrella Insurance Policy
- 60 Years Old: Get Long-Term Care Insurance
QUOTES: (There are about 6,000 per book, so I just picked a random few.)
The Total Money Makeover
- “But once she’s done with the pity party, she still needs to start with Baby Step One and follow the Total Money Makeover step-by-step to put herself in the best possible position” (p163).
Complete Guide to Money
- “Men, for example, use money like a scorecard and lose self-esteem when money problems pop up. Women, on the other hand, experience fear–my wife actually says terror–when money problems come up, because money represents security to them” (p28).
- “Managed money goes farther” (p63).
- “We felt like buying something we needed kept us from buying something else we needed, and it was a black cloud that followed us everywhere, every time we spent money” (p65).
- “The goal is to get out of debt–fast and forever. That doesn’t happen with little-bitty, comfortable payments. If you want out of debt, you’ve got to do whatever it takes” (p93).
- “If you want to be a powerful giver you should view your wealth as the goose and give the golden eggs” (p320).