I have stated before that the book, “The Total Money Makeover” by Dave Ramsey changed my life. How so, you say?
Well, it basically ripped to shreds every preconceived notion I’ve ever had about personal finance. This term is slightly overused, but Dave is truly a GURU when it comes to ridding your life of debt and thereby changing everything about your life. Permanently. If you purchase the book, I would venture to say it’d be the best $25 bucks you’ll ever spend. The thing about Dave’s message and plan is that it’s useless to you if you’re not ready to commit to making some serious changes to your financial behavior. My husband and I were ready back in 2007 and Dave has become an honorary member of our family as a result!
Today we got the chance to see him live, right here in our hometown. We bought tickets back in April. Yes, you read that right…APRIL. When I saw that he’d be coming to the Los Angeles area, there was NO WAY we were going to miss the opportunity to hear him speak! We waited a long time for this event and he didn’t disappoint!
His presentation was thought provoking, inspirational, and funny! He has an incredible sense of humor and he’s a dynamic speaker. If you’re starting to feel like this is a Public Service Announcement on the awesomeness that is Dave Ramsey…well…it is! His teachings are simple, sound, and Bible based, and proven. No tricks, no gimmicks…just real talk.
Anyway, I posted on Facebook about us attending the event and a couple people asked for notes. I decided a blog post would be a perfect way to share the info with everyone! So here are the key things that stood out to me when I read the book a few years ago and that he went over in detail again today. Please note that this is all taken from the “See Dave Ramsey LIVE!” workbook and promotional material.
- The average American household has $91,000 in debt, and the total consumer debt has doubled since 1980. (Federal Reserve and U.S. Census Bureau)
- Conflict over money is still the leading cause of divorce today (Multiple Studies)
- 28% of Americans spent more time watching reality TV last month than they spent planning and preparing for retirement over the past 10 years. (AARP poll)
Myth: Car payments are a way of life, and you’ll always have one.
Truth: Staying away from car payments by driving reliable used cars is what the typical millionaire does. This is how they became millionaires.
Myth: You need to take out a credit card or car loan to “build your credit.” You must build your FICO score to prosper.
Truth: The FICO score is an “I LOVE debt” score. Why would you want to go into debt so you have the opportunity to go further into debt?
Myth: You need a credit card to rent a car, check into a hotel, or make a purchase over the phone or web.
Truth: A debit card will do all of that, except for a few major rental companies. Check in advance.
Dave offers 7 Baby Steps toward financial freedom. They are:
1) Start an emergency fund of $1,000
2) Pay off all debt using the debt snowball
3) Build a fully funded emergency fund of 3-6 months of expenses in savings
4) Invest 15% of household income into Roth IRAs and pre-tax retirement
5) Create a college fund for your children
6) Pay off your home mortgage early
7) Build wealth and give
My husband and I got to step two and living debt free was the only way we have been able to keep our heads above water during the recession and survive my husband’s layoff. After today, we are charged up and ready to pick up where we left off – building our fully funded emergency fund. We are proof that this plan works and look forward to getting all the way to Baby Step 7!
If you’d like more information, check out Dave Ramsey’s website. He’s got a variety a products that can help you get motivated and get started! You can also pick up a copy of “The Total Money Makeover” from any major book retailer and/or on Amazon.
I wish you the best in your financial endeavors! It’ll take a lot of hard work, but the result will be WELL worth it!