Panzer’s penchant for performing book reviews surfaces again as I embark on my next series reviewing Dave Ramsey’s “Total Money Makeover” that took me a weekend to read but many more sessions to digest each of his 7 Baby Steps. This 7 parter will be less intense that the previous “Are You Ready for Retirement” series as Dave’s 7 steps are more intuitive and require lesser number crunching and running through of CPF rules.
I had heard of Dave Ramsey many times because many personal finance blogs make reference to the concept of “debt snowball” that is popularised by Dave Ramsey. I had heard of that term many times but never really understood it until I picked up a copy of “Total Money Makeover” through our excellent public library system.
Who is Dave Ramsey
He a best-selling author, radio host and someone who was a millionnaire before his 30s and he became bankrupt before discovering the knack for counselling people in dire financial straits. Like any popular figure, he also has his share of criticisms as you can see in this wikipedia article.
“Total Money Makeover” is one of his popular books and is the subject of our discussion.
Debt is BAD, BAD, BAD!
Make no qualms about it, Dave Ramsey is an interesting writer because his writing voice is informal and feels like he’s talking to you through the book. He peppers the books with side notes on “Dave’s Rants” or “Myths” that he dispels about debt and money. His approach to your total money makeover of a typical debt-ridden family or individual is to get with the program to become Arnold Swarzendollar. I kid you not…
His approach to getting yourself and your family’s finances back into shape is to follow the 7 Baby Steps:
1. Save $1,000 cash as starter emergency fund
2. Start the debt snowball
3. Finish the emergency fund
4. Invest 15% of your income in retirement
5. Save for college
6. Pay off your home mortgage
7. Build wealth