The Total Money Makeover: A Proven Plan for Financial Fitness

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The book is based on the author's personal experience of getting out of debt and accumulating wealth, as well as the testimony of numerous people who have taken his advice and attained financial

Best-selling author Dave Ramsey's guide to managing your finances, The Total Money Makeover: A Proven Plan for Financial Fitness, provides readers with a useful and efficient method. 

The book is based on the author's personal experience of getting out of debt and accumulating wealth, as well as the testimony of numerous people who have taken his advice and attained financial freedom. 

The book debunks certain widespread financial myths and fallacies, including the necessity of borrowing money, the advantages of consolidating debt, and the wisdom of keeping up with the Joneses. Instead, it proposes a simple and straightforward plan that consists of seven steps:

Save $1,000 for an emergency fund. 

This serves as a safeguard against unforeseen costs that can throw off the budget. The emergency money ought to be held in a separate account that is simple to get to but hard to use for other things.

Pay off all debt except the house using the debt snowball method.

In this case, all debts must be listed in order of size, regardless of interest rate, and paid off in that order. All obligations should be paid at least the minimum amount due, with the exception of the smallest debt, which should be repaid as quickly as feasible. 

Once the lowest obligation is paid off, the remaining funds should be used to pay down the next smallest loan, and so on. By paying off debts one at a time using this strategy, motivation, and momentum are generated.

Save 3 to 6 months of expenses for a fully funded emergency fund.

This is a bigger buffer that can deal with serious situations like losing your job, paying for expensive medical care, or needing house repairs. A money market account or certificate of deposit, for example, are safe and liquid place to keep the fully paid emergency fund.

Invest 15% of household income into retirement savings.

In tax-advantaged accounts like 401(k)s or IRAs, this is the bare minimum that should be set aside for long-term asset accumulation. The book advises buying mutual funds with a minimum ten-year track record and diversification in four categories: growth, growth and income, aggressive growth, and international.

Save for children's college education using tax-favored plans.

For parents who want to assist their children in paying for higher education without accruing debt, this is an optional step. The book advises adopting programs like 529s or Education Savings Accounts, which enable money to grow tax-free and be withdrawn tax-free for approved educational expenses.

Pay off the home mortgage early.

This represents the last step toward debt freedom and home ownership. To lower the interest and shorten the loan's duration, the book suggests making extra principal payments on the mortgage each month or switching to biweekly payments.

Build wealth and give generously.

The ultimate goal of the financial plan is to get to the point where money is no longer a worry or a source of stress but rather a tool for attaining goals and giving back to the community. The book advocates saving and investing for long-term objectives like vacations, hobbies, and legacies while also encouraging charitable giving of at least 10% of income.

No matter your income level, age, or history, the book asserts that by following these principles you may achieve financial peace and wealth in any circumstance. Additionally, it offers helpful hints and resources for saving money, investing, and avoiding typical mistakes and con artists. Anecdotes, examples, humor, and a motivational writing style are used throughout the book.

Anyone who wants to take charge of their finances and make improvements can benefit from reading The Total Money Makeover. It provides a tried-and-true strategy for financial health that is founded on sensible ideas and common sense.


The main philosophy behind the book is that financial success is 80% behavior and 20% knowledge. It emphasizes the importance of personal responsibility, discipline, and avoiding all debt.

The first baby step is to save $1,000 as a starter emergency fund.

Dave Ramsey suggests avoiding all debt, including credit cards. He believes that credit cards encourage overspending and lead to debt.

The final baby step is to build wealth and give. This involves investing, building wealth, and using money to help others.

The book suggests paying off all debt, including student loans, as quickly as possible. This is part of the second baby step, which is to pay off all debt using the debt snowball method.

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