The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey
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The Total Money Makeover: A Proven Plan for Financial Fitness Audiobook by Dave Ramsey is a book focusing on having a financially stable and healthy life. The author aims at helping people reduce their debt and live a debt free and less stressful life. His principles are simple and he says work hard, pay what one owes and stay clear of debt. He also suggests seven baby steps for the readers to stay away from debt and build wealth. The seven baby steps are:
Step 1: Create a $1000 emergency fund which can be used as a cover for meeting any emergencies.
Step 2: Debt Snowball: Ramsey urges the readers to pay off their debts starting with the smallest debt first moving to the highest. When one debt is paid, those payments can be used to add to repaying the next debt and so on.
Step 3: Complete the emergency fund: Once the debt has been repaid, one should create an emergency fund of 3-6 months of living expenses.
Step 4: Invest in retirement fund: Once the debt is clear and an emergency fund created, it is time to save for retirement. At least 15% of the total income should be invested in a retirement fund.
Step 5: Save for children’s education: People should save for funding their children’s education. It will ensure a better future for their children.
Step 6: Pay off the home mortgage: Ramsey proposes paying off the home mortgage which though may seem difficult to people, is distinctly possible.
Step 7: Wealth building: The final step is wealth building where the author says that if someone does not have debt, credit card bills, and other liabilities, they can make their money grow faster.
The Total Money Makeover: A Proven Plan for Financial Fitness Audiobook by Dave Ramsey has been successful in helping people get rid of their debt trap and become financially stable. It provides actionable and measurable steps for debt repayment and wealth creation.
Since the author himself has experienced financial distress in life, he provides inputs for avoiding common mistakes which can lead to debt snowball and create financial stress for people. This is a recommended read for readers looking for improving their financial situation.