The Total Money Makeover

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As newlyweds, we read The Total Money Makeover to understand the newfound responsibilities and opportunities concerning personal finances.  I honestly was clueless, and so I bought this book so that my bride didn’t think I would remain clueless.  It was a complete game-changing eye-opener for us during our first year of marriage.

I am currently taking some guys through some discipleship steps and one of them is the area of personal finances.  As I began to share some principles that seemed so natural to me now, I realized that most of them started with the read of Dave Ramsey’s famous trade book.  I reread it in order to remind me of principles and also to share some more info with my guys.  While there are more detailed volumes out there, I don’t know if you can find a better summary book that deals with all the major areas of personal finances than this one.  It has a way of flipping the paradigm on the American Dream and causing you to see the cultural scams that are stressing everyone out.

The thesis for the book is:

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

“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” (5-6).  Strive to be self-controlled and wise concerning personal finances.  Make the hard calls now and later you will be freed up either to give more, borrow less, spend more, or just experience freedom.  Regardless of your motivation to create financial margin, it is a good thing to have it.

Favorite Quotes

  1. If you will live like no one else, later you can live like no one else (5).
  2. Being willing to delay pleasure for a greater result is a sign of maturity (17).
  3. Over 97% of people don’t systematically pay extra on their mortgage (33).
  4. You can get a mortgage if you have lived right [fighting against the common myth that you must have credit cards to get a mortgage] (39).
  5. It hurts when you spend cash, and, therefore, you spend less (42).
  6. A budget is people telling their money where to go instead of wondering where it went (62, quote from John Maxwell).
  7. I am not against the enjoyment of money.  What I am against is spending money when you do not have money to begin with (65).
  8. You must set up a budget, a written budget, every month (95).
  9. Spend every dollar on paper before the month begins.  Give every dollar of your income a name before the month begins, which is called a zero-based budget (99).
  10. Every dollar you can find from anywhere in your budget goes toward the smallest debt until it is paid (117, explaining the Debt Snowball principle).
  11. A fully funded emergency fund covers three to six months of expenses (133).
  12. Beware not to rationalize the use of your emergency fund for something that you should save for and purchase (136).
  13. The point is that as you get in better shape, it takes a lot more to rock your world…What used to be a huge, life-altering event will become a mere inconvenience (146).
  14. When your spouse gets the raise you are expecting, don’t raise your lifestyle with it.  Save more!  Invest more (189)!
  15. When asked about mortgages I tell everyone never to take more than a fifteen-year fixed-rate loan, and never have a payment of over 25 percent of your take-home pay (198).
  16. Money is good for fun.  Money is good to invest.  And money is good to give (204).
  17. To use riches is to cause them to be consumed, to trust in riches is to count upon them for things they cannot provide, but to possess riches is to have the right to say how they will or will not be used (221, quote from Dallas Willard).