Dave Ramsey’s Total Money Makeover Review

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Dave Ramsey's Total Money MakeoverDave Ramsey is a polarizing figure. Some people love him and swear by his advice and others think he’s a hack. Which one is he? Unfortunately that’s a question only you can answer but hopefully I will provide you with enough information about his flagship book to make your own decision.

The problem with personal finance is that there are multiple solutions to any one problem. If you think it’s simply about math, you’re wrong. Someone in credit card debt understands that when you use your credit card and don’t pay your entire bill, you’ll go into debt. They aren’t stupid, they know how interest works, but there is a non-math reason why they’re in debt.

If you had to boil down the book into a single sentence, then I’d say that Dave Ramsey’s Total Money Makeover is a book that gives you a good framework to get yourself out of debt and back on solid financial footing.

Dave Ramsey’s “Baby Steps” to Financial Freedom

At the core of Dave Ramsey’s advice is his “baby steps” towards financial freedom:

  1. Save $1,000 cash as a starter emergency fund
  2. Start the debt snowball
  3. Finish the emergency fund – accumulate 3-6 months of expenses
  4. Invest 15% of your income in retirement
  5. Save for college
  6. Pay off your home mortgage
  7. Build wealth – Invest, donate, enjoy life (without going into debt)

Debt Snowball Strategy

The debt snowball strategy is one that has received a lot of ink throughout the years. The strategy states that you should list all of your debts and their monthly payments. If you have extra cash to put towards debt, put it towards your smallest amounts first. When that debt has been repaid, take the amount you would’ve sent them and add it to the payment you make to the second smallest debt. This way, as you pay off your debts, your monthly payments to the other debts increases like a snowball.

Why does this strategy work? It comes down to motivation and celebrating successes. It makes more financial sense, mathematically, to put your extra cash into the debt with the highest interest rate. However, by paying off the smaller debts, the number of debts you do have decreases. These successes give you the motivation to continue your payments and put you back on the right path.

The brilliance in this methodology, specifically the much maligned debt snowball strategy, is that it takes into account human psychology. That’s the non-math part of personal finance. Like I wrote earlier, people don’t get themselves into debt because they don’t understand math. No matter what you say about the inefficiencies in his strategy, the reality is that it works. I’d venture to guess that thousands of people have pulled themselves out of debt with the advice he’s given in just this one book.


The book is routinely in the top three in Amazon’s Personal Finance category, so if you’re struggling with debt, I think you might want to give this book a try. The book also contains a lot of motivational stories of people who probably were in more dire straits than you and were still able to pull themselves out.

One final recommendation, if you are in debt, borrow this book from the library and put that cash towards your smallest debt. 🙂

{ 61 comments, please add your thoughts now! }

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61 Responses to “Dave Ramsey’s Total Money Makeover Review”

  1. Anonymous says:

    The Bible says: “Owe no man anything, but to love one another”. “He who borrows becomes a slave of the lender”. The Amish, with 8th grade education, are the richest church per-capita in America. Someone’s getting scammed in highschool and in college, and it’s not the Amish. I think The Holy Bible has the best financial advise ever.

  2. aspentree says:

    Dave Ramsey is very good for folks whose debt is their master. But he is quite elementary for those that know how to master debt. His followers are quite fanatical, almost religiously fanatical. While most of his followers get out of debt, they don’t really achieve wealth. I would consider David’s teachings to be the elementary school of Personal Financial Management.

  3. KR says:

    I have not been through his program yet, but am upset because it is a requirement at my college. I am financially responsible and don’t feel I need it. I didn’t choose a Christian University so that product can be peddled to me in the name of God. I’m sure Dave has plenty of money in the bank since people are have to go throuhg his program for a “discount” of $125 as a college requirement. Very smart Dave!

  4. Diane says:

    I have read Dave’s book, and, prior to my divorce, participated in a SUnday-School video series study of Financial Peace University. I didn’t complete it, however, but I remembered it when I decided recently to get myself out of my huge amount of debt.

    Like Terry, who I can relate to, I am below poverty level. Totally cut off, no job, no car, no $ to even pay for a car, living with my folks temporarily because I can’t even afford to make any kind of rent, very, very, very few personal possessions, let alone “toys”, I have disabilities which make it difficult to FIND work, let alone DO the work without having illness and attendance problems, etc. It’s a dire, “hopeless” situation. I have debt, ONLY because I had to do SOMETHING to survive day by day. I don’t believe in credit cards, actually, and was extremely hesitant to get one. I didn’t get my first credit card until recently, at 32 years old! I had a job at the time…….

    So basically, just “getting going” with Dave’s plan, is a HUGE task for me. Getting “current” wth my necessities is a very large hill; getting “current” with my bills? A major mountain in itself. And that’s BEFORE the Baby Steps begin! I am bound and determined to do this, though, modified of course to suit my situation. Even though I have this massive mountain in front of me to just get started, though, I see light up ahead. I have done samples of the debt snowball, suited to my irregular income and “pro-rata” figuring of debts. That snowball is VERY impressive, and in those samples, I had 4 debts chopped off inside of 3 months! That gave me a lot of HOPE and MOTIVATION.

    What am I going to do about income? Well, that’s the kicker these days. In this economy it’s difficult finding a job, more difficult if you are disabled. But, it is not IMPOSSIBLE. I am out job hunting a LOT, although it is admittedly discouraging. I find that I do better when I am able to do things to make $ from home. So, I am also doing that. I make these little Disciple’s Cross necklaces, and they sell like hotcakes, literally!!! Thankfully I had just barely enough of a tiny cushion in my bank account to invest in a starter kit. I swear to this, I wear a necklace less than 5 minutes, oftentimes, and it’s SOLD, BOOM! With orders and requests to make more always coming. Today I sold 3, just by wearing 1. ANd I JUST started this venture! I feel good that I can give honest days’ hard work with the labor of my hands and heart, and not worry about being fired, or getting sick, and that I am giving myself a jumpstart to financial freedom. My hands hurt, my back hurts, etc., but you know what?? THAT’S OKAY. I’m on my way to being debt-free and in financial peace!

    HARD? Absolutely. Harder that I don’t have steady income and survive off almost nothing (I have less than $2 in my bank account. Being able to make anywhere NEAR $500 a month would be a dream come true for me. Any more than that would be Paradise!). IMPOSSIBLE? NO. Absolutely not. I have motivation, and loads of it, despite my extreme poverty, and I have made myself FIND unorthodox ways to bring in money to “make it”. I will MAKE Dave Ramsey’s program work for me, and I am against credit cards and debt in the first place!

  5. Angeline says:

    The baby steps are sound common sense, exactly what my mother taught me over 30 years ago. What Americans have lost (perhaps we never had it) was the capability to push ourselves away from the table when we’re done.

    And, as to having a reasonable paycheck to make it work, definitely, that is important. To tell someone “oh, let’s be victims” because they’ve stated they’re near poverty level is down right rude. There is no reason to respond to someone is such a manner, most especially since Mr. Ramsey aims his products particularly at Christians. Regardless of your belief system, to respond in such a manner shows your lack of respect for those, and I have been there, who are living hand to mouth. Try it some time – it is not fun.

    As to Mr. Ramsey’s product/plan/advice, I’ve heard from many that it does work. You just need to stay strong and stick to a budget, just like a diet plan, you won’t see result unless you put the work in.

    God’s Blessings y’all. Remember, be kind and polite to one another. Money’s not something you can take with you once you meet your maker anyway.

  6. saraetta says:

    I googled Ramsey because my church is offering his program early next year. It’s $93 for a package of resources, and you go to a weekly meeting and watch his DVDs. I am not in debt, and I don’t think I need to spend the time and money to learn stuff I already know. I really just need a very good, preferably free, website for budgeting. Any ideas?

    One other thing, they’ve shown excerpts of Ramsey’s DVDs at church to encourage people to sign up. In one of them, he’s giving an illustration and makes a joke about someone having a “Prozac moment” in reference to spending more than they earn. I was tempted to laugh, but started thinking about the implications of his joke. People who take Prozac are not stupid or even mildly forgetful. I think if I was taking Prozac, I’d be offended by Ramsey’s comment. That’s another reason I’m not going to spend my hard-earned money on his program.

    • Loopback says:

      Bah, getting bent over an illustration is understood but focus more on the teaching/lesson and less on a particular product drop. The advice he offers is sound and, frankly, basic.

      IMHO, he is successful in understanding what it takes to change a person’s behavior. It’s a MONUMENTAL task for most people to change and he is a master and motivating those whom are READY. Some will heed the advice, do the hard work and improve their financial picture forever. Others will pick out a word and try to decide if that’s a reflection of his character. Should I do this or should I not? etc.

      I was in the same boat a few months ago and realized I was afraid to face the ugly truth: my “financial planning” sucked, my family was at risk and something needed to be done differently. I was contributing to the success of credit card, merchant and bank execs the world over vs. doing the right things for myself and my family. OUCH.

      Ramsey’s perspective and motivation forced me to look at things differently and changes started to occur. Slowly, surely.

    • Marker says: (Free) ($19.99 a month)

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