The Total Money Makeover Review

Over 15 years later, it remains a must read

The Total Money Makeover, originally published in 2003 by Dave Ramsey, has sold more than five million copies, and is one of the most popular personal finance books ever written. You likely have heard of Dave, who has a daily radio show and podcast which boast over 2 million listeners daily. His nine week personal finance course, Financial Peace University, is taught online and in schools and churches all around the country.

The Total Money Makeover is a straight forward, step-by-step guide to get a grip on your finances for those in the starting blocks. As Dave says, personal finance is 80 percent behavior, and just 20 percent head knowledge, and you have to change what you are doing to get a different result.

Throughout The Total Money Makeover, Ramsey provides real-life examples from people who have followed his plan on how they were able to apply the principles he teaches, and the outcome that resulted.

The first point I learned when I read The Total Money Makeover the very first time was that you have to admit that there is a problem, and then commit to make a change. Much like committing to working out or dieting, deciding to change your behavior with your finances is something that you must come to terms with in your head and heart. I enjoyed Dave’s view on debt and credit, and while I don’t completely agree with his stance on credit cards (Dave is anti-credit card), I do believe for many in America who are natural spenders and have compulsive spending behavior, plastic can be a burden and not a blessing.

Speaking of credit, the only credit Dave teaches you should use is for the purchase of your primary home. Note I said primary residence, not rental/investment real estate. If you don’t have the cash, then you should not purchase it (and that means automobiles, clothes, shoes, electronics, etc). For many Americans, taking this advice is a hard pill to swallow, however if you are struggling with debt, it’s the message they need to hear.

One of the other major takeaways from Dave’s book was how he teaches that just because you make more money, your money problems don’t go away. For years I personally tried to outearn my stupid decisions, and while income would go up, my debt did as well. I unconsciously increased my standard of living, justifying the changes because my direct deposits were enough to cover these unplanned purchases.

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Dave speaks in detail about the danger of keeping up with the Jones’s, and how many of us are ruining our finances just trying to keep up with our friends, co-workers, neighbors, or even people we don’t know. I again have been victim of this in my life, buying clothes and cars to impress people I didn’t know with money I didn’t have. Looking back, had I adopted and lived by a budget in my early 20’s,  I would likely be able to be financially independent today.

Virtually all personal finance bloggers believe that you should have a basic emergency fund/savings account when starting your journey of eliminating your debt. Some will differ on the actual amount you need (we personally recommend our readers just starting out  on their G.O.O.D (Get Out Of Debt) journey to save up $500 if your household income is less than $50,000).

This is the first step and without the question the toughest. Challenging not because logically you can’t save the money, but because it mentally and emotionally is the moment you have to decide to change. People who are not natural savers (like myself) are forced to get out of their comfort zone, and commit to making a difference in their life by saying no to cravings they otherwise would say yes to. On the contrary, once you accomplish saving money for your emergency fund, the mental win is a natural high and a shot of adrenaline that should propel you to Baby Step 2 (paying off your debt, smallest to largest).

Related: What is the Debt Snowball Method?

One of the other points Dave teaches that I disagree with is to stop retirement contributions until your debt is paid off, to include your 401(k). Our advice is if your company provides a match, especially if it is dollar for dollar, you should contribute even while paying off debt.


  • You need to automate the savings muscle while manually changing your life
  • You will never get this time back. If it takes you 3 years to pay off your debt, that is 3 years of free money you essentially won’t ever be able to get back
  • That extra 5 percent post-tax you could potentially put on your debt won’t pay off those balances you have run up much faster.


Dave Ramsey Speaking at The Total Money Maker Live (Dallas, TX)


Dave Ramsey’s Baby Steps Taught in The Total Money Makeover:

Step 1 – $1,000 in an Emergency Fund

Step 2 – Pay off all non-mortgage debt using the Debt Snowball

Step 3 – A minimum of 3 months of expenses in your savings account

Step 4 – Invest 15 percent of your household income into Retirement (Roth IRA)

Step 5 – Fund college for your children (if applicable)

Step 6 – Pay off your home early (if applicable)

Step 7 – Build wealth and give


Once you pay off all your non-mortgage debt, you are through arguably the toughest baby steps. Step 3 takes you back to your emergency fund, and ideally you should be able to funnel the money you have been throwing on your debt payments directly into your savings, until you have a minimum of 3 months saved up. While I agree with that, I will say for those who work in volatile industries, or in sales/commission only jobs, you should consider saving up to 6 months of your monthly expenses. One may say how do I equate my monthly expenses?  At this point in your journey, your budget should consist of your mortgage or rent payment, along with your basic household expenses. In order to achieve financial independence, aim to keep this as low as possible, and aim to reduce this even if by 1 percent each month. Once you have built up the emergency fund, we head back to the automated savings plan which if you follow our advice, you haven’t stopped. Baby Step 4 is invest 15 percent of your household income into Retirement, via a Roth IRA. Our other amended advice would be if your goal is to financially retire inside of 10 years, consider increasing  that number from 15 to 25 percent of your take-home pay. Not only will this force you to live lean and on a budget, you will accelerate your retirement (and wealth building) in the final decade of your “ideal work life”.

For those who are not homeowners or those who do not have children, Baby Step 5 and 6 are skipped.

Dave focuses his final baby step on the art of being philanthropic. Giving back is a personal choice, and what and where you decide to donate is something you have to decide. If you are a person of faith, tithing is touched on a bit on the Total Money Makeover, and I personally can say since reading Dave’s book, I began to consistently title, even when I thought I “couldn’t afford to”.

Whether you agree completely with Dave Ramsey’ process or not, The Total Money Makeover has transformed more lives in the area of personal finance than anyone else in this space. Dave has devoted his entire life to helping people get out of debt, devise a plan to budget, and retire early. The Total Money Makeover is the very first book I recommend to read for anyone who is looking to make a change with their finances.

If you are interested in learning more about Dave Ramsey’s course Financial Peace University, go here.

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