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Updated: Jun 17, 2020

In 2010 my husband and I were completely broke, owed thousands of dollars in credit card debt, had poor credit scores, drove P.O.S. cars, stayed in a house that belonged to my grandparents and lived paycheck to paycheck. Now, we are completely debt free (except for our mortgage), own nice newer vehicles (paid off, no car payments) own a beautiful home, have an emergency savings account with 6+ months of our total living expenses, invest 15% of our income into a retirement account, travel on luxurious vacations once a year, and only one of us works full time. How did we go from financial losers to the top 5% -10% of Americans? Read my blog about the book that helped create our financial success. I hope our story will inspire you to start a Total Money Makeover!

My Total Money Makeover

The Total Money Makeover By Dave Ramsey


Okay, folks, do you want to turn those fat and flabby expenses into a well-toned budget? Do you want to transform your sad and skinny little bank account into a bulked-up cash machine? Then get with the program, people. There’s one sure way to whip your finances into shape, and that’s with The Total Money Makeover: Classic Edition.

By now, you’ve heard all the nutty get-rich-quick schemes, the fiscal diet fads that leave you with a lot of kooky ideas but not a penny in your pocket. Hey, if you’re tired of the lies and sick of the false promises, take a look at this—it’s the simplest, most straightforward game plan for completely making over your money habits. And it’s based on results, not pie-in-the-sky fantasies. With The Total Money Makeover: Classic Edition, you’ll be able to:

  • Design a sure-fire plan for paying off all debt—meaning cars, houses, everything

  • Recognize the 10 most dangerous money myths (these will kill you)

  • Secure a big, fat nest egg for emergencies and retirement!

"Personal finance is 80% behavior and 20% head knowledge." Said Dave Ramsey

In each chapter Dave shares real inspirational stories of how his principles have worked for ordinary people. So throughout my summary I'm going to share my personal stories that I've experienced applying these principles.

The Total Money Makeover

Chapter 1- The Total Money Makeover Challenge

"What to do isn't the problem; doing it is. Most of us know what to do, but we just don't do it…You are the problem with your money." Dave says.

"Tens of thousands of ordinary people have used the system in this book to get out of debt, regain control, and build wealth." Claims Dave.

Myself included!

Dave's motto is:


Dave explains "... if you will make the sacrifices now that most people aren't willing to make, later on you will be able to live as those folks will never be able to live."

My parents are a good example of this. I grew up in a family of 6 on one income. My Dad worked, and my mom stayed home to take care of me and my 3 siblings. Growing up I always thought we were broke because we never had anything fancy or got to travel anywhere except one trip to Disneyland when I was 12, and I always heard my parents say "We don't have money for that." So I assumed we were totally broke! But the truth is, my parents were making sacrifices for us and their future. They built their first house when they were 26 yrs old and paid for most of it in cash. 10 years later they sold and built a new 5,000 sq ft. house and paid for that house in cash and bought a new truck in cash. My parents didn't have any extra money because they paid for everything they own in cash. My parents made the sacrifices most people don't want to make like learning how to stretch a dollar with meals like PB&Js, top ramen, canned soup, and Hamburger Helper. They purchased used items, and cleaned them up to look new. They paid cash for almost everything they owned and because of that, my mom has never had to work, my dad is on a plan to retire before 60, and they're able to live debt free in their dream house in the mountains and they have what most people don't have- a stress free lifestyle and peace of mind!

Chapter 2- Denial: I'm Not That Out Of Shape

Dave quotes his dad "90% of solving a problem is realizing there is one."

To reset your money spending habits, you must overcome the biggest obstacle DENIAL!


Dave quotes the Wall Street Journal "70% of Americans live paycheck to paycheck."

In 2008, when I was 22 years old, I was in denial because I thought I was doing better than everyone else! I own a business (my childhood dream job) lived alone in my own place (rented it from my grandparents) was debt free and I had $15,000+ in my savings account. I was independent and not living paycheck to paycheck like everyone else my age.

Then one day while I was vacationing in Maui, I spent $15,000 (all of my savings) on a timeshare! A month later I got an annual maintenance fee from the timeshare company of $900. After spending $4,000 on my trip to Maui and all of my savings on the timeshare (I paid the full amount in cash), I didn't have $900; so I had to charge it on a credit card. Shortly after that, I started having car issues. The fuel pump in my Chevy Blazer needed to be replaced, and then the transmission, then the entire rear axle. I had no money for these repairs or money to buy a new car, so I had no choice but to charge it on my credit card. Within a couple of months I went from being debt free with money in the bank, to broke and thousands of dollars in credit card debt. I went from being in the 30% of Americans to the 70%.

Dave paraphrases a story from Zig Ziglar "… if you drop a frog into boiling water, he will sense the pain and immediately jump out. However, if you put a frog in room- temperature water, he will swim around happily, and as you gradually turn up the water to boiling, the frog will not sense the change.The frog is lured to his death by gradual change."

For me, buying that timeshare was like jumping into boiling water. As soon as I felt the burn of being broke and in debt, I jumped out of the pot I was in and never wanted to go back. The burn I experienced drove me to make a change!


"Change is painful. Few people have the courage to seek out change. Most people won't change until the pain of where they are exceeds the pain of change." Says Dave

The pain I felt from the loss of my savings and the weight of the credit card debt is what drove me to change and seek professional financial advice. Looking back now I'm grateful for my mistake of buying that timeshare because it is what helped me achieve my financial success now!

Do I still have the timeshare?

No, unfortunately I only owned the timeshare for 3 years and never once got to use it! Why? Because it was never available when I wanted to use it and each year the annual dues went up 9%. After complete frustration with the timeshare company and my own stupidity, I hired a lawyer. For a fee of $250, the timeshare company took back my shares and released me from my contract and annual fees. They also kept my $15,000!

Lesson learned- Say NO to timeshares! If it sounds too good to be true, it unusually is!

Chapter 3- Debt Myths: Debt is (Not) a Tool

MYTH: Car payments are a way of life; you'll always have one.

TRUTH: Staying away from car payments by driving reliable used cars is what the average millionaire does; that's how he or she became a millionaire.

Dave explains "The Federal Reserve notes that the average car payment is $495 over 64 months. Most people get a car payment and keep it throughout their lives. As soon as a car is paid off, they get another payment because they "need" a new car. If you keep a $495 car payment throughout your life which is "normal," you miss the opportunity to save money. If you invested $495 per month from the age of 25 to 65, a normal working lifetime, in the average mutual fund averaging 12% (the 80 year stock market average), you would have $5,881,799.14 at the age of 65! Hope you like that car!"

I've witnessed the value of what not having a car payment can do. The first example is of my parents during my childhood.

"Do you want a new car or a new house? My dad (age 26) asked my mom in 1990. "A new house" she said. So my dad sold their new Ford Bronco that my mom loved so much, and bought a used Honda Civics with the cash they had saved up. Eliminating their car payment helped them have extra cash to buy the building materials needed to build their new house.

The second example is what I experienced by paying off my Audi A4, and driving it until the engine blew up, when it was 16 years old. Buying a slightly used luxury vehicle, with low miles, helped me save a lot of money. After I was able to pay it off, I was able to save up money for the down payment on my first home. Not having a car payment helped me save up for my next car.

Chapter 4- Money Myths:The (Non)Secrets of the Rich

MYTH: I can't use cash because it is dangerous; I might get robbed.

TRUTH: You are being robbed every day by not using the power of cash.

My husband used to think if he had cash he would spend it, which is true. But, when I followed Dave's Envelope System and created a budget for him (fiance at the time) he was able to spend his money responsibly on his bills, save up money for our honeymoon in Jamaica, and still have money left over to spend on his guilty pleasures. Dave's envelope system helped us control our over spending, pay off debt, and save money!


Dave rants"It's easy to overspend when you don't have a clear boundary line. The budget tells you what that line is for each category, but when your gas money and grocery money and entertainment money are all sitting in one big lump in your bank account, one category can plow right past the line without you knowing. That's why I recommend using the envelope system for some categories.

Say you budget $600 for food this month. Well, when you get paid, you take that $600 out of the bank in cash- yes, actual cash- and put it in an envelope. Write "FOOD" on the outside of that envelope. When you go to the store, take your envelope and spend your cash.

You don't use that money for anything other than food, and you don't buy any food except with the money out of that envelope. When the cash is gone, you're done! That's a pretty clear boundary!

The envelope system works best in categories like food, entertainment, clothing, gas- stuff like that. You don't need to use it for monthly bills that you spend through the mail or have automatically debited from your account.

Here's the deal: Swiping a piece of plastic doesn't register in your brain the same way cash does. When you actually lay a couple of Benjamins on the counter, you know you're spending money. That's why using the envelope system will help you change your spending habits. Cash is king!"

Another myth I can relate with…

MYTH: I don't have time to work on a budget, retirement plan, or estate plan.

TRUTH: You don't have time not to.

After I got married, my husband and I were working a lot and making a lot of money! It was great! We were making so much money that we didn't think needed the envelope system or to budget our money, or so we thought… Then in 2013, when we filed our taxes and saw exactly how much money we made together as a married couple, we were shocked, and what shocked us even more was the fact that we had NO MONEY in our savings account, no money in a retirement account, I still had a car payment, and we still had credit card debt!

"Where did all of our money go?" My husband and I asked each other.

So I sat down and took Dave's advice and created a budget. After two years of following our budget, I was able to pay off my car, all of our credit cards, save up a 20% for a down payment to buy a condo, start an emergency cash fund, and pay cash for a slightly used ski boat (horrible purchase)!

Chapter 5- Two More Hurdles: Ignorance and Keeping Up with the Joneses

Hurdle #1: Ignorance: No One Is Born Financially Smart

"Ignorance is not lack of intelligence; it is lack of know-how… No one is born with the knowledge of how to handle money, but we aren't taught that!" Dave said.

As a teenager my dad tried to teach me about managing money, but like most teens, I didn't want to listen to my parents especially when I thought they were broke.

What Dave teaches about money, is all the same things my dad tried to teach me. But I was too ignorant at the time to listen. It wasn't until I read Dave's philosophy about money that I realized how SMART and RICH my dad actually is!

Dave says "Overcoming ignorance is easy. First, without no shame, admit that you are not a financial expert… go on a lifetime quest to learn more about money… read something about money at least once a year."

Total Money Makeover is a great book to read! Check out Dave's website for other great books by other authors.

"What you don't know about money will make you broke and keep you broke." Dave states.

Hurdle #2: Keeping Up with the Joneses

Keeping up with the Joneses, what does that old phrase mean? It refers to peer pressure, and cultural expectations.The "Joneses" are the people who on the outside look rich and they are the people you feel the need to impress with material things.

What do you think of when you think about a millionaire?

A big house, new cars, fancy toys, expensive clothes?

According to Dr. Tom Stanley the author of The Millionaire Next Door, most millionaires don't have those things.

Stanley found that most millionaires (people who actually have a million dollars in cash) live in middle class-homes and drive older paid-for cars.

"When you buy a big pile of stuff with no money and lots of debt, you are a financial fake." Dave says.

Truth bomb... most of the "Joneses" are financially fake!

"Radical change in the quest for approval, which has involved purchasing stuff with money we don't have, is required for a money breakthrough." Dave said

Now at this point of the book Dave explains what he calls Baby Steps to achieve a Total Money Makeover.

What Are the Baby Steps?

Dave Ramsey's 7 Baby Steps will show you how to save for emergencies, pay off all your debt for good, and build wealth. It’s not a fairy tale. It works every single time!


Save $1,000 for your starter emergency fund.


Pay off all debt (except for your home) using the debt snowball.


Save $10,00- $25,000 (3–6 months of expenses) for a fully funded emergency fund.


Invest 15% of your income for your retirement.


Save for your kid’s college fund.


Pay off your house.


Build wealth and give.

Chapter 6- Save $1,000 Fast: Walk Before You Run

When you first start to manage your money, start slow. Dave suggests to start with what he calls “Baby Steps” Dave explains “When you try to do everything at once, progress can be very slow.” “Think of a 350 pound person beginning marathon training with a quick ten-mile run. The results of not building up to that run could be total frustration at best and a heart attack at worst... Walk around the block and lose some weight before going on a ten-mile run.”

Walk before you run.Take baby steps to get started.

Before you start taking baby steps you must set up a written budget for every month. Dave says “A written budget for the month is your money goal. People who win at anything have written goals. Goals are what you are aiming at.” Sig Siglar says “If you aim at nothing, you will hit it every time.”

Dave quotes Harvard grad and best selling author Brian Tracy “3% of people who had written goals achieved more financially than the other 97% combined!”

Check out Dave Ramsey’s website for more information on creating a monthly budget.

Now it's time for the first step!

Baby Step One: Save $1,000 Cash as a Starter Emergency Fund

Dave quotes Money Magazine “78% of us will have a major negative event in a given ten-year period of time.”

That is why it is crucial to have a rainy day fund! Losing your job, an unexpected pregnancy, a health emergency, or a global pandemic are all things nobody can plan for, but they happen. COVID 19 is a perfect example of why we should all have an emergency fund set aside for rainy days.

Do whatever you can to save $1,000 ASAP. Dave says “work extra hours, get a part-time job, deliver pizzas, sell something. Get crazy… Remember, if the Joneses (all the broke people) think you are cool, you are heading the wrong way. If they think you are crazy, you are probably on track.”

Once you have $1,000 HIDE IT! What my mom always says “Out of sight, out of mind.” Don’t tempt yourself to spend your money.

Once you complete Baby Step One, move on to Baby Step Two.

Chapter 7- The Debt Snowball: Lose Weight Fast, Really

List all of your debts from smallest to largest. Paying off the smallest ones first will motivate you and give you the momentum you need to stay dedicated to paying off all of your debts.

“If you go on a diet and lose weight the first week, you will stay on that diet...go six weeks with no visible progress, you will quit.” Dave said.

Then Dave says “After you list the debts smallest to largest, pay the minimum payment to stay current on all the debts except the smallest. Every dollar you can find from anywhere in your budget goes towards the smallest debt until it is paid.”

Once you pay off the smallest debt, start paying off the next one, and then the next one. This is what the second step looks like.

Baby Step Two: Use the Debt Snowball to become debt-free except for your home.

How to Get the Snowball Rolling

Where can you get extra money to pay off your first debt when you don’t have any extra money?

Here is what Dave says “You can sell lots of little stuff at a garage sale, sell a seldom-used item on the Internet, or sell a precious item through the classifieds… sell so much stuff that the kids are afraid they are next… If your budget is stopped-up and your Debt Snowball won’t roll on its own, you are going to have to get radical.”

If you don’t have anything to sell Dave says to temporarily increase your income.

“Temporarily, just for a manageable period of time, the extra job or overtime may be your solution.” Dave said.

“The debt snowball is very possibly the most important step in your Total Money Makeover.” said Dave Ramsey

Need some motivation to become debt free?

Dave reveals the math “The typical American with a $50,000 annual income would normally have an $850 house payment and a $495 car payment, with an additional $180 payment on the second car...a $165 student-loan payment; the average credit-card debt is about $12,000, making those monthly payments around $185 per month… miscellaneous debt on things like furniture, stereos, or personal loans on which they pay an additional $120. All those payments total $1,995 per month. If this family were to invest that instead of sending it to the creditors, they would be cash mutual- fund millionaires in just fifteen years! (After fifteen years… they’ll have $2 million in five more years, $3 million in three more years, $4 million in two and a half more years, and $5.5 million in two more years. They would have $5.5 million after twenty-eight years.)”

Chapter 8- Finish the Emergency Fund

After you have paid off all of your debt except for your home, then move to the next step.

Baby Step Three: Finish the Emergency Fund.

Dave says “A fully funded emergency fund covers three to six months of expenses… emergency fund will usually range from $5,000 to $25,000.”

“A strong foundation in your financial house includes the big savings account, which will be used for emergencies.” states Dave

What if you are saving for a house? Should you save for a house first?

Dave says “Do not buy a home until you finish this step… if you move into home ownership with debt and no emergency fund, Murphy will set up a residence in the spare bedroom.”

Dave refers to Murphy as “Murphy’s Law” meaning that anything that can go wrong will go wrong.

Dave says saving for a down payment or cash purchase of a home should occur after Baby Steps 2 & 3. He calls that step Step 3 (b)

This is what Dave said about buying a house “Let it be a blessing rather than a curse. It will be a curse if you buy something while you are still broke.”

Chapter 9- Maximize Retirement Investing: Be Financially Healthy for Life

“A Total Money Makeover retirement plan means investing with the goal of security.” -Dave Ramsey.

Dave quotes “ According to a study by the Employee Benefit Research Institute, 70% of Americans say they are not where they need to be with retirement savings, and more than 40% have never even tried to calculate how much money the need to save in order to retire with dignity.”

And Dave says “CNN found that 56% of all workers have less than $25,000 in retirement savings.”

This leads us to the next step.

Baby Step Four: Invest 15% of Your Income in Retirement

Dave says “Invest 15% of your gross income… If you under- invest, you will one day be buying that classic cookbook 72 Ways to Prepare Alpo and Love it (BTW Alpo is dog food) and if you over- invest, you will keep your home mortgage too long, which will hold you back the wealth- building power of your Total Money Makeover.”

DAVE RANTS… "The reason you are afraid of investing is because you do not know what you are getting into. Learn about investments."

I admit, I am NOT a numbers person and investing scares me because of my lack of knowledge. I’ve read a few different books about investing, including Investing For Dummies, and I’m still nervous about investing in the stock market. Luckily for us, my husband is one of the lucky ones that gets 2 pensions through his Union and a 401(K) through his company. And I have my own ROTH IRA. Right now we are investing about 18% of our income into our retirement.

Over the last few years I have felt comfortable with our retirement plan, but after reading TOTAL MONEY MAKEOVER for this review, I am going to take Dave’s advice and invest in mutual funds. Because of my lack of investing knowledge I’m going to find a financial adviser, whom I trust, to help me set up an investing plan.

“Smart people hire smarter people to work for them.” UNKNOWN

Chapter 10- College Funding: Make Sure the Kids Are Fit Too

Dave starts this chapter by stating “College is important.”

Then he rants...

DAVE RANTS… One Myth About the College Degree

"I've never walked into a doctor's office and said "You know what, Doc, before you check my blood pressure, you better tell me where you went to medical school."And I've never gone into my CPA's office and quizzed him about where he got his accounting degree.

But when we're picking out a school for ourselves or our kids, we act like where we get our degree is some kind of magical fairy dust that's going to automatically make our lives successful. Here's a shocker: it's not.

Knowledge, perseverance, integrity,and character will carry you a lot farther than a piece of paper with a particular school's logo on it…

Now, I'm not against an elite education or private education. But what I am against is the debt that usually comes with those degrees and the lack of thought that often goes into getting them.

People call my radio show all the time with $80,000 in student loans while working a job that brings in $25,000 a year. The math just doesn't work, and people just can't live that way…

Bottom line: The most useless part of your degree is its pedigree. To be financially successful, you've got to quit caring what other people think. If you can really get that before you go to college, then you're making a giant step in the right direction."

“Student loans are a cancer. Once you have them, you can’t get rid of them. They are like an unwelcome relative who comes to stay for a “few days” and is still in the guest room ten years later.” Dave says.

Dave states “The College Savings Foundation found that 35% of Americans with kids don’t save a dime towards college. According to a 2011 study by SallieMae, only 14% of families use college savings funds like ESAs and 529 plans. That means 86% have saved nothing or close to nothing.”

Almost everyone will agree that college is important, but why do only a few people save for it?

Dave says “Because we are in debt, have no emergency savings, no budget, and so on. We have to Baby Step our way here in our Total Money Makeover before we have money to save for college.”

So that brings us to the next step.

Baby Step Five: Save for College

What is the best way to save for college?

Dave suggests “funding college with an Educational Savings Account (ESA), funded in a growth-stock mutual fund. The ESA aka the Educational IRA, grows taxes- free when used for higher education. If you invest $2,000 a year from birth to age 18 in prepaid tuition, that would purchase about $72,000 in tuition, but through an ESA in mutual funds averaging 12%, you would have $126,000 tax- free. The ESA allows you to invest $2,000 per year, per child. If you start investing early, your child can go to virtually any college if you save $166.67 per month ($2,00/year).”

“Saving for college ensures that a legacy of debt is not passed down your family tree.” Dave Ramsey

“A Total Money Makeover will likely not only pay for your child’s education, but also- by teaching your children to handle money, and by becoming wealthy- your grandchildren can go to school debt-free.” Dave said.

Chapter 11- Pay Off the Home Mortgage: Be Ultra-Fit

Once you have completed Baby Steps 1- 5; you created a budget, become debt- free (except for your mortgage), have a fully funded an emergency fund, you’re actively investing 15% into your retirement fund, and investing in your kids college fund, you become part of the top 5% to 10% of all Americans. Now it is time to move on to Baby Step 6. !

Baby Step Six: Pay Off Your Home Mortgage

Dave says “Thirty- year mortgages are for people who enjoy slavery… If you must take out a mortgage, pretend only fifteen- year mortgages exist. Simply make payments as if you have a fifteen- year mortgage, and your mortgage will pay off in fifteen years… If you want to pay off your mortgage in twelve- years or any number you want, visit or get a calculator and calculate the proper payment at your interest rate on your balance for a twelve- year mortgage (or the number you want). Once you have that payment amount, add to your interest payment and your current principal and interest payment, and you will pay off your home in twelve years.”

Dave recommends “Never have a payment over 25 percent of your take-home pay.”

“Paying cash for a home is possible, very possible. What’s hard to find is people willing to pay the price in a sacrificed lifestyle.” Dave Ramsey

Currently I owe $350k with a 30 year fixed mortgage. After reading this chapter in the Total Money Makeover, I see how possible it is to pay off my mortgage in less than 15 years!

Living debt-free in a mortgage free home can be done! I’ve seen it happen for my parents. Trust me, if they could do it with 4 kids and one income of $50,000, anyone can do it!

Chapter 12- Build Wealth Like Crazy: Become the Mr. Universe of Money

Baby Step Seven is where the top 2% of Americans are. The 2% is completely debt free- no house payment, car payment, credit card debt, money in savings, money in retirement, and your kids don’t have student loans.

Dave says Money is good for FUN. Money is good to INVEST. And money is good to GIVE.”

Baby Step Seven: Build Wealth


“The problem with people is, they buy things when they can’t afford them.” Dave said

At step seven, you have earned the money to have fun and buy the toys you’ve always wanted. Because now you actually have the money to pay for them.


Dave saysAlways manage your own money. You should surround yourself with a team of people smarter than you, but you make the decisions. You can tell if they are smarter than you if they can explain complex issues in ways you can understand.”

Work with professionals who want to teach you and not take advantage of you.

“When your money makes more than you do, you are officially wealthy.” Dave Ramsey


“From meeting with literally thousands of millionaires the thing the healthy ones have in common is a love of GIVING.” Said Dave

Giving to others and paying it forward is the most fun you can have with money that never gets old. Like the old saying goes “If you always give, you will always have.”

“There are only three uses for money: FUN, INVESTING, and GIVING. You cannot claim Total Money Makeover status until you do all three.” Dave says

Chapter 13- Live Like No One Else

Dave says “Wealth will make you more of what you are. If you are a jerk and become wealthy, you will be king of the jerks. If you are generous and you become wealthy, you will be most generous. If you are kind, wealth will allow you to show kindness in immeasurable ways. If you feel guilty, wealth will ensure that you feel guilty for the rest of your life.”

Along with great financial advice, here is what I got from reading THE TOTAL MONEY MAKEOVER.

Take Away

  • Save more, spend less.

  • Create a budget and stick to it.

  • Have an emergency fund. (6+ months of expenses)

  • Don't worry about what other people think.

  • Hire people smarter than you to invest your money.

  • Give money when you can.

I hope my stories and my summary of this book will inspire you to take control of your finances, create a plan, save money, and get out of debt!

If you enjoyed my summary, I recommend buying Dave Ramsey’s book The Total Money Makeover and visiting his website for more information

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