New York Times best seller! More than five million copies sold!*
You CAN take control of your money. Build up your money muscles with America’s favorite finance coach.
Okay, folks, do you want to turn those fat and flabby expenses into a well-toned budget? Do you want to transform your sad and skinny little bank account into a bulked-up cash machine? Then get with the program, people. There’s one sure way to whip your finances into shape, and that’s with The Total Money Makeover: Classic Edition.
By now, you’ve heard all the nutty get-rich-quick schemes, the fiscal diet fads that leave you with a lot of kooky ideas but not a penny in your pocket. Hey, if you’re tired of the lies and sick of the false promises, take a look at this—it’s the simplest, most straightforward game plan for completely making over your money habits. And it’s based on results, not pie-in-the-sky fantasies. With The Total Money Makeover: Classic Edition, you’ll be able to:
- Design a sure-fire plan for paying off all debt—meaning cars, houses, everything
- Recognize the 10 most dangerous money myths (these will kill you)
- Secure a big, fat nest egg for emergencies and retirement!
Includes new, expanded “Dave Rants” sidebars tackle marriage conflict, college debt, and more. All-new forms and back-of-the-book resources to make Total Money Makeover a reality.
Dive deeper into Dave’s game plan with The Total Money Makeover Workbook: Classic Edition. The Total Money Makeover: Classic Edition is also available in Spanish, transformación total de su dinero.
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About the Author
Dave Ramsey is America’s trusted voice on money and business. His five New York Times bestselling books—Financial Peace, More Than Enough, The Total Money Makeover, EntreLeadership, and Smart Money Smart Kids—have sold more than 7 million copies combined. The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations and iHeartRadio.
Read an Excerpt
THE TOTAL MONEY MAKEOVER
A PROVEN PLAN for FINANCIAL FITNESS
By Dave Ramsey
Thomas NelsonCopyright © 2013 David L. Ramsey III
All rights reserved.
The Total Money Makeover Challenge
"As lost as a ball in tall weeds!" That is exactly how I felt. Although it was decades ago, I can still taste the emotion as if it were yesterday. Out of control, lost, no sense of power, I felt dread creep across the room like the afternoon shadows on a cold winter's day. Sitting again at the kitchen table with too much month left at the end of the money, I was not having fun. This "adult" stuff where a wife looks to you to provide and kids expect to be fed and kept warm was not exactly working. I didn't feel like some powerful adult; instead, there was a little boy inside me who was very afraid—afraid of this month's bills, afraid of this month's mortgage, and absolutely terrified when I considered the future. How was I to send kids to college, retire, enjoy life, and not live at the edge of money worries?
The "Normal" American Family
It seemed every month I sat at that same table with the same worries, fears, and problems. I had too much debt, too little savings, and no sense of control over my life. No matter how hard I worked, it seemed I couldn't win. I was to forever be a slave to some banker, to the government, and to the "needs" of my family. When Sharon and I "talked" about money, we ended up in a fight, leaving her feeling afraid and me feeling inadequate. The next car purchase, the next house, the kids' college—our entire future seemed out of reach.
I didn't need a get-rich-quick guy to pump me up or tell me to be positive. I didn't need a secret formula to riches. I wasn't afraid of hard work or sacrifice. I didn't want to "feel" my way into being "positive." I was positive of only one thing: I was sick and tired of being sick and tired. I was tired of sitting down to "do the bills" and having a heaviness come over me. The hopelessness was overwhelming. I felt like a gerbil in a wheel—run, run, run, no traction, no ground covered; maybe life was just a financial illusion. All the money came in, all the money went out, and only the names were changed to protect the innocent. I owe, I owe, so off to work I go. You know the drill and all the clichés that go with the drill.
Oh, some months everything seemed to work, and I thought maybe we were going to be okay. I could tell myself then, "Oh well, this is how everyone lives." Those times offered enough wiggle room that I could continue to lie to myself that we were making headway, but deep down, I knew we weren't.
I Did It My Way, and My Way Wasn't Working
ENOUGH! THIS STINKS! I finally decided that this nonplan wasn't working. If you have ever had any of those feelings, you are going to love this book, and, more important, you will love your Total Money Makeover.
Back in our late twenties, my wife, Sharon, and I went broke. We lost everything due to my stupidity in handling money, or not handling it, as the case may be. Hitting bottom and hitting it hard was the worst thing that ever happened to me and the best thing that ever happened to me.
We started with nothing, but by the time I was twenty-six years old, we held real estate worth over $4 million. I was good at real estate, but I was better at borrowing money. Even though I had become a millionaire, I had built a house of cards. The short version of the story is that we went through financial hell and lost everything over a three-year period of time. We were sued, foreclosed on, and, finally, with a brand-new baby and a toddler, we were bankrupt. Scared doesn't begin to cover it. Crushed comes close, but we held on to each other and decided we needed a change.
So after losing everything, I went on a quest, a quest to find out how money really works, how I could get control of it, and how I could have confidence in handling it. I read everything I could get my hands on. I interviewed older rich people, people who made money and kept it. That quest led me to a really, really uncomfortable place—my mirror. I came to realize that my money problems, worries, and shortages largely began and ended with the person in my mirror. I realized also that if I could learn to manage the character I shaved with every morning, I could win at money. That quest, the one that ended with me staring at myself in the mirror, led me on a new journey: the journey of helping others, literally millions of others, take that same quest to the mirror. Live Events, Financial Peace University, The Dave Ramsey Show, and the New York Times bestsellers Financial Peace, More Than Enough, The Total Money Makeover, and EntreLeadership have enabled me to tell millions of Americans what I have learned—the hard way—about money.
The Big Challenge: Find a Mirror
I have a challenge for you. Are you ready to take on the guy or gal in your mirror? If you are, you are ready to win. I rediscovered God's and Grandma's simple way of handling money. Wealth building isn't rocket science, which is a good thing for me (and probably you). Winning at money is 80 percent behavior and 20 percent head knowledge. What to do isn't the problem; doing it is. Most of us know what to do, but we just don't do it. If I can control the guy in the mirror, I can be skinny and rich. We will let other books work on the skinny, and I will help you with the rich part. No, there are no secrets, and yes, this will be very hard. Hey, if it were easy, every moron walking would be wealthy.
So my Total Money Makeover begins with a challenge. The challenge is you. You are the problem with your money. The financial channel or some late-night infomercial gimmick aren't your answer; you are. You are the king of your future, and I have a plan. The Total Money Makeover plan isn't theory. It works every single time. It works because it is simple. It works because it gets to the heart of your money problems: you. It is based on a series of prices that must be paid to win. All winners pay a price to win. Some losers pay a price and never win, and that is usually because they didn't have the benefit of a proven plan for financial fitness.
Tens of thousands of ordinary people have used the system in this book to get out of debt, regain control, and build wealth. I've scattered their stories throughout the book. If at any point during your makeover you are tempted to quit or you just need a little encouragement, read one of these stories. These people have sacrificed for a short period of time so they will never have to sacrifice again.
If you are looking for a road map to get you home, you've found it. If you are looking for something easy or fast, you have the wrong book. If you are looking for a book to help you pass your CPA exam in the area of financial knowledge, you have the wrong book. If you are looking for a writer who has intricate academic theories (that don't work in the real world), you've got the wrong guy. I have many of the academic pedigrees, but I ended up broke. I have actually twice become a millionaire from nothing. The first time I was in my twenties, the money was in real estate, and I lost that due to my stupidity; the second time I was not yet forty, but I did the money thing right that time, and I am debt-free.
I often hear about broke finance professors who bemoan that I am way too simple, or as an e-mailer told me on The Dave Ramsey Show one day, "You are a one-trick pony." To those of you who say you have great but unexecuted plans, I say, "Prove it. I have." I like the way I've built wealth better than the way you haven't. You will meet people, educated and uneducated, throughout this book who have won, or begun to win, with money for the first time in their lives. The Total Money Makeover works!
The Total Money Makeover Motto
This plan works, but it will cost you. It will teach you to say new words, like no. In short, your Total Money Makeover will be a personal money makeover where you learn this motto: IF YOU WILL LIVE LIKE NO ONE ELSE, LATER YOU CAN LIVE LIKE NO ONE ELSE. This is the motto of your Total Money Makeover. It's my way of reminding you that if you will make the sacrifices now that most people aren't willing to make, later on you will be able to live as those folks will never be able to live. You will notice the motto all through the book, even across the bottom of the pages. I'm sorry there isn't an easier path to feature in the motto, but the good thing about this one is that it works. You can repeat the motto to yourself as you pass up a purchase in order to hit your goals. When you work late and are tired, you can say the motto to yourself. Of course, this isn't a magic formula; I'm not into that. But it does remind you that you will win, and the payoff will be worth the cost.
Some of you are so immature that you are unwilling to delay pleasure for a greater result. I will show you exactly how to get the result you want, so the price you pay will not be in vain. I don't want to walk across hot coals because it is fun, but if I can be shown how a short, painful walk will do away with the lifetime of worry, frustration, stress, and fear that being constantly broke brings me, then bring on the hot coals.
Early on in our marriage, we decided that Kari would stay home with our children rather than working outside the home. This decision has perhaps disadvantaged us financially at times, but it has been the best choice for our family in many other regards.
Financially, we have made some mistakes such as keeping our student loans around because of the "low interest" and even leasing a car at one point. To us, credit cards were a status symbol, and we had a few. Our debt peaked at about $375,000 (including the mortgage). That's not the smartest situation to get yourself into when you have four kids and one salary. By the time we got on Dave's plan, we were ready to work with gazelle intensity to get rid of our debt! During one six-month period we paid off $57,000 and gave $7,000 to our church. That really encouraged us and kept us going! It was also great going to Atlantis with Dave and Sharon as finalists in The Total Money Makeover Challenge!
Now we are debt-free and helping our daughter through her first year of college. We are also saving for retirement at a good rate and building a new house. We enjoy earning interest now, rather than paying it. We couldn't have done it without Dave. We pay cash for everything, and we tell our money where to go. We can't even tell you the peace and freedom this has brought our entire family!
The first months were the most painful as we went from credit to cash. But it's so nice not to be paying for today and yesterday anymore! By following Dave's Total Money Makeover plan, you will gain peace of mind as you get control of your money. Just remember to stay focused.
The key to our success was both of us getting on the same page at the same time. We now work together to plan our spending rather than racing to outspend each other. We are each other's source of strength during weak moments when spending sounds fun again. We have learned to have FUN talking about money and financial goals. It's no longer a contentious subject.
Our advice: Honestly assess your earning capacity and live below your means. Be in control of your own destiny and your own happiness!
Kari Stolworthy (both age 43)
My Promise to You
My promise to you is this: if you will follow the guidelines of this proven system of sacrifice and discipline, you can be debt-free, begin saving, and give as you've never given before. You will build wealth. I will also promise you that it is totally up to you. The Total Money Makeover isn't a magic formula to wealth. This system will not work unless you do, and then only to the degree of your intensity in implementing it. In the following pages, you will meet many individuals and families who have won many money victories, but not one of them won until they won the battle with the guy in the mirror. Your situation isn't your spouse's fault (well, maybe, but we'll talk later), it isn't your parents' fault, it isn't your children's fault, and it isn't your friends' fault. IT IS YOUR FAULT!
But guess what? That means that if you're the one who got you into this mess, you're the one who can get you out. No law, regulation, or mandate will fix you. No politician's promises or government handout will fix you. No dream job or sky-high salary will fix you. Some of those things may help, but none of them will do a thing unless you take charge of your own life. This is your life, your call, your future. This is 100 percent your decision. If you're ready to move, then let's get going. Right now. I'll lead the way. But I won't push you across the starting line, and I can't drag you across the finish line. This whole journey from start to finish is up to you.
My financial life began turning around when I took responsibility for it. People all across America have used these steps to become free, regain a sense of confidence and control, and build a future for their families. Please join me on a journey away from the young man I was, the one I described earlier who was racked with worry, fear, and guilt over money. Take this journey with me to your own Total Money Makeover, but remember, the first part of the quest is confronting the man in the mirror. That man in the mirror is your Total Money Makeover Challenge.
Denial: I'm Not That Out of Shape
Several years ago I realized I had let my body dissolve into flab. I had worked so hard for so many years that I had abandoned the care of my physical condition. The first step to getting into shape was to realize I needed to change my ways, but the second and equally important step was to identify the obstacles to getting there. What would stop me from getting into shape? Once I understood those obstacles, I began a process to lose weight, grow muscle, and become fitter. Your Total Money Makeover is the same. You need to realize there's a problem, but you must also see what could hinder your move toward financial fitness. The next few chapters will identify some major obstacles to YOUR Total Money Makeover.
Look in the mirror. Take a long look. What do you see? Suck in that gut; hold up your chest, and really look at yourself. It doesn't matter how many angles or poses you take; the mirror is cruel. "Well, I'm really not that fat, maybe just a little flabby." My dad used to say that 90 percent of solving a problem is realizing there is one. Focused intensity, life-or-death intensity, is required for you to reset your money-spending patterns, and one of your biggest obstacles is DENIAL. The sad thing is that you can be financially mediocre in this country, financially flabby, and still be average. And if the truth be known, being average, normal, and financially flabby is pretty much okay by most folks' standards. This, however, is not a book for the wimpy among us. This is a book about winning, about really having something.
We started out our marriage with absolutely no debt. We lived on a single income, the cars were paid for, and we even had a small amount of savings. However, we eventually made the misguided decision to move into a much larger house that stretched us financially. After a few years, I changed jobs and we increased our annual income—giving us the illusion that we could increase our standard of living. That is when the debt really started accumulating. We financed two NEW cars to replace our old ones. We started buying everything on credit. We even got a home equity loan. Before we realized it, we were buried in debt!
Excerpted from THE TOTAL MONEY MAKEOVER by Dave Ramsey. Copyright © 2013 David L. Ramsey III. Excerpted by permission of Thomas Nelson.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
What This Book Is NOT.................... xiii
Flying Turkeys and Skinny-Dipping.................... xxi
1. The Total Money Makeover Challenge.................... 1
2. Denial I'm Not That Out of Shape.................... 9
3. Debt Myths Debt Is (Not) a Tool.................... 16
4. Money Myths The (Non)Secrets of the Rich.................... 49
5. Two More Hurdles Ignorance and Keeping Up with the Joneses............. 74
6. Save $1,000 Fast Walk Before You Run.................... 88
7. The Debt Snowball Lose Weight Fast, Really.................... 104
8. Finish the Emergency Fund Kick Murphy Out.................... 124
9. Maximize Retirement Investing Be Financially Healthy for Life.......... 140
10. College Funding Make Sure the Kids Are Fit Too.................... 152
11. Pay Off the Home Mortgage Be Ultra-Fit.................... 165
12. Build Wealth Like Crazy Become the Mr. Universe of Money.............. 181
13. Live Like No One Else.................... 196
Meet the Winners of The Total Money Makeover Challenge.................... 201
About the Author.................... 205
Total Money Makeover Worksheets.................... 207
Most Helpful Customer Reviews
Radio talk show host and money maestro Dave Ramsey shares his sure-fire baby step method to financial security. He also debunks money myths and explains how commonly held beliefs about money and debt actually enslave American consumers. At the end of the book, Ramsey offers worksheets to help readers work out a budget and implement the principles covered in his book. As Ramsey himself states at the beginning of this book, this is not a get rich quick book filled with information that can not be found elsewhere. Instead, it is a common sense approach to getting rid of debt by paying it off and not allowing it back into your life. I think this book should be a required read for anyone undergoing credit counseling, going through a bankruptcy, or for high school seniors before they leave home and enter college. A lot of the information is common sense or easily figured out if you just spend a little time thinking about what is really important in life. However, the majority of American consumers either don't have this insight, or just choose not to exercise it! What I found most helpful about this book was the myth debunking section. It is funny how misconceptions that are repeated often enough from a variety of sources eventually become "facts". I loved how Ramsey played on the names of different credit cards or financial terms to help readers easily remember why they should not even be considered by anyone wanting to be financially healthy - for example, a car "fleece" instead of a car lease, and Social Insecurity. He has an engaging writing style that makes the potentially dry topic of money management an interesting, quick read. This book doesn't take that long to read, but can be life-changing if families take the time to implement the Baby Steps. I also really liked the way Ramsey offers hope to everyone, regardless of their age or economic level. He shared stories of all different types of people that utilized his strategies to become debt free. The chapter focusing on educating children on beginning with a solid foundation was good, too. As I read back over this review, I see myself saying over and over, "This was good and that was good". Obviously this was a good book with a lot of helpful information. I can't think of anything really critical to say. If you desire to have financial freedom, walk through the steps of this book. If it doesn't bother you to look into the future and see years and years of making payments to banks and other organizations making them richer while you continue to get by without a solid financial plan, then spend your reading time on something else. But again, this book can provide you with the tools to financial freedom through common sense and delayed gratification, so check it out if that is something you are interested in. I received a complimentary copy of this book from BookSneeze in exchange for my honest review. All opinions are my own.
Had already read the first edition, but still enjoyed reading the updated version. Bought 3 copies to give for Christmas presents. Only wish I had started his plan when I was younger.
Dave Ramsey helps you design you own surefire plan for paying off ALL of your debt - from your house to your car, and yes, any medical bills too. He helps you recognize the ten most dangerous money myths that tend to get most of us in trouble, like the fact that debt consolidation might help you save interest, but it only treats the symptom, and most folks who consolidate their debt end up right back in the same cycle down the road. He'll also help you fatten up your savings account, so you're ready for those financial emergencies like car repairs (ahem) and get you on the path to a secure retirement fund. While this book was previously released about 10 years ago, this new edition has been updated with new insights (since the 2008 recession has/is affecting most of us) and current resources at the back of the book. Please note that I received a complimentary copy of this book to review.
The Total Money Makeover: A Proven Plan for Financial Success by Dave Ramsey educates the reader with common sense financial planning. This book is not written for the wealthy, but all socio-economic walks of life. Ramsey's financial wisdom can apply to the single mom with a $20,000 income or a family with a $70,000 income. The strength of this book is that it can be applicable to everyone's financial situation- even those who find themselves unemployed and burdened with debt. The author offers a glimmer of hope- a way out of debt in a world where so many despair after losing jobs. This release of the original classic is timely considering the large unemployment rates, and record high numbers of people collecting food stamps and other assistance. A financially struggling society needs a book like this- filled with common sense steps as well as spiritual biblical insight. One point of issue is that I do feel that Ramsey's income to housing ratio is either out of date, or not applicable to many places with very high costs of living such as New Jersey and California. As Ramsey suggested, housing should not be over 40-45% of the gross income. Yet, for many disadvantaged individuals and families who do not own homes and find they must rent, there is no way to avoid this discrepancy. In NJ, it is the norm to find an average apartment under 1100 square feet, 3 bedrooms, 1 bathroom- to cost $1500 per month. Housing costs are high even for a modest homes. Relocation to cheaper housing is not an option when it requires relocating to a new state. This author addresses the psychology behind the science of saving money and budgeting. He encourages simple "baby" steps in order to show the reader that it is possible to master their spending and saving. He introduces simple to understand concepts- with concrete steps to follow. This is not simply an academic book on the theory of budgets and savings. Ramsey actually takes on the role of the personal life coach or accountant with specific steps and a plan to follow. In cases where one's financial situation is so dire that the basic needs cannot even be met he challenges the reader with aggressive yet effective tactics- such as a second job or selling non essential or expensive items such as cars, boats, jewelry. He even suggests garage sales as a way to squeeze out a bit of money. Yet- this book isn't about accumulating money and wealth simply for the sake of accumulating wealth. The author shares the greater purpose which is to reduce, and eliminate debt as well as the use of credit cards. Additionally, watching spending habits and making smart choices contributes to the sustainability of a budget. This book is a real eye opener as it educates the reader with valuable information about loans and debt. He provides interesting facts about the dangers of payday loans, rent to own payment plans, car payments and buying lottery tickets- explaining how institutions and loan sharks take advantage of the poor and desperate- creating an ongoing cycle of poverty. This book stats from the beginning with the "baby steps" of saving a smaller sized emergency fund- down to the more advanced final steps of paying off a mortgage and buying a car with cash and saving for retirement. Throughout the book are real life stories of regular ordinary families and people who succeeded in their financial goals with Ramsey's money makeover plan. The back of the book includes several very useful budgeting worksheets as well. I feel like this book makes a great resource. As a blogger for booksneeze I received this book published by Nelson Books, and imprint of Thomas Nelson publishers.
An easy ready and common sense instructions for getting rid of debt. It gets you excited about eliminating payments. I wish I had found this many years ago, but it's never too late to get control
Hthiis a really good book it is helping me before i graduate and start college. It has really made me realize some of the decisions i had planned have changed that way i do not start off on the wrong track. Thanks Dave Ramsey.
I read Financial Peace University years ago. We're in a place in our lives where we are ready to get out of this nagging debt and prepare for the next phase of life. It is based on simplistic principles and discipline.
This is a great book with easy to understand steps to take that make logical sense. I like that this method can help those struggling with debt to see the progress they are making so they feel encouraged to keep going.
This book helped us get out of debt and stay out! I recommend it to everyone and have probably bought 10 copies and given them as gifts to my friends and family that ask "How did yall manage to get out of debt while raising 4 kids and not making more than $65,000 a year?" It's all about changing your spending habits, budgeting & working hard. There is no magic, easy way out. Happy to say our daughters highschool teaches Dave's course now. It really was a life saver for us!
Fantastic book. I would recommend this to everyone, along with his radio show.
Mr Ramsey provides excellent and clear advice on the critical issue of getting out of personal debt. It seems he believes this a very 'hard sell' because about half this book consists of lengthy testimonials by people who claim their new success is due to following his advice. His approach is to follow what amounts to an "AA" type step agenda. All his statements about debt in general and its specific causes and forms are valid.As one who adhered to his principles for life and have never been in debt beyond a temporary home mortgage I recommend anyone follow this advice. But better is to stay out of debt. The critical ideas could have been written in half the space with stress on how to stay out of debt.' try it john sloan.
Very thankful for Dave Ramsey Total Money Makeover. It is not only a great book for getting your financies in order but your lifestyle.
Great book. Gave it as a wedding gift to a young couple so they "can live like no one else."
This book lays down a simple blueprint that is easy to understand for the average person who is wanting to better their financial future.
Very motivational book. Worth the buy
I like the way he explains the ideas, very simple for anybody. Looking forward to put all these financial tools in practice
I recently finished reading this book and it has really opened my eyes. It scared me big time, huge eye opener. I think every young person should read this book. It's an easy read and has a lot of really great information in it. It has completely changed the way I look at money and I will highly benefit from this book. It does have some religious quotes in it. Even if you are not a christen, if you can look past that I think it could be really helpful to anyone who reads this. It doesn't have a TON but there is some through out the book. I wish I would have found this book sooner. I could have saved myself a lot of stress. I'm excited to becoming debt free! I highly recommend this book to anyone, even if your doing well with money.
Love Dave Ramsey. He's a huge help with understanding money issues.