I had just talked to one of my brothers and sisters-in-law about Dave Ramsey's financial advice and books when I checked on available books via Thomas Nelson's blogger review programme, Booksneeze. Ramsey's book, The Total Money Makeover, was available, so I decided to see what I thought. My brother and sister-in-law are big fans. She says Ramsey's advice helped her see the error of her own financial management. And, while I don't think of them as wealthy, they are financially comfortable.
Let me acknowledge that this book was not really written for me (just shy of 60 years old). It barely addresses financial issues that I face as I don't have 20 years before retirement. We do use credit cards but have no debt, have an adequate nest egg, and our kids are already through with university.
First impressions: a lot of hype and a lot of cliches and sound bites. I've never listened to Ramsey's radio programme but I often felt like I was reading a transcript, particularly in the first part of the book, which seemed primarily motivational. That is fine, but I didn't really need that.
All of that being said, this is an excellent read for anyone who has consumer debt or who is undisciplined with finances or who has 20 years or more before retirement. Ramsey lays out clear principles and plans for controlling one's finances rather than letting them control you. And, it doesn't matter whether one has an annual income of $25,000 or $225,000 — the principles and the plans apply. In fact, this book may be more important for the one with the $25,000 income.
Ramsey's primary messages, though he doesn't use these phrases, "get out and stay out of debt — avoid it like a plague" and "be laser-focused on working your financial plan" (Ramsey's phrase is "focused intensity"). His advice is sound, though it may be unconventional:
- Quickly set aside a starter emergency fund
- Get rid of consumer debt, starting with the smallest debt first — early success is a strong motivator for future effort.
- Complete your emergency fund
- Maximize retirement savings
- Save for your kids' college
- Pay off your mortgage
- Build wealth
- Give, have fun, invest
For me, the biggest weaknesses of the book are:
- It's cliche-ridden — to be fair, though, he warns the reader up front that it will be.
- I think he doesn't make a strong enough emphasis on giving early in the book. One could get the impression that giving doesn't begin until one has built wealth.
- He doesn't address what to do if one is within 10 years of retirement and doesn't have decades to build wealth.
Run well, y'all,
[DISCLAIMER: I received a free copy of this book from the publisher in exchange for an honest review of the book. My future participation in the program is not dependent on how I review the book, I'm free to write the review that I think the book deserves.]