The Total Money Makeover: A Proven Plan for Financial Fitness

by Dave Ramsey

To my beautiful wife, Sharon, who walked arm in arm with me through a Total Money Makeover—I love you, honey.

You who have courageously had a Total Money Makeover of the heart and wallet are the real superstars.

Skinny-Dipping

As a matter of fact, I recommend you skip through the book reading all the stories first. They will inspire you to read all the way through and actually do the Proven Plan to Financial Fitness.

Many years ago I was given a calling: to show people the truth about debt and money and to give them the hope and tools necessary to set themselves free financially.

Later Financial Peace was published by a New York publisher and became our first New York Times bestseller.

The Total Money Makeover.

I am positive that personal finance is 80 percent behavior and only 20 percent head knowledge.

a good idea of what to do with money but not ...

I am sure that the problem with my money is the guy in my mirror.

If he will behave, he can make the money thing work. The math of wealth building is not rocket science; it is simple—but you have to DO IT!

So the proven Total Money Makeover plan I teach has become very successful not because I have fo...

Not because I am the only one with a “Debt ...

Because when you change your life, you really change your life.

So when Mike Hyatt, then the president and CEO of Thomas Nelson Publishers, brought me the concept for a Total Money Makeover book, I became very excited. I became excited because I knew this book would inspire readers to take immediate action through a simple, step-by-step process that could only lead to life-changing results. Hope—the light at the end of the tunnel that is not an oncoming train—is a very powerful force.

This book hit the market like a lightning bolt—it just blew up! And it wasn’t because I was some genius; it was because the country was ready for a financial wake-up call.

It was because American families—hard-working men and women who were sick and tired of being sick and tired financially—were ready to change their lives.

The Total Money Makeover

You are about to read about a process, a proven plan, to win. You will find the plan to be very simple yet very inspiring.

The principles are not mine. I stole them all from God and your grandmother. The principles are common sense, which isn’t so common anymore.

I have successfully bottled common sense about money into a plan that anyone can do. And millions are!

I am so thankful that I have not only given them a proven plan but have also inspired them to change their family tree.

By recognizing and identifying some basic truths and everyday common sense, I have convinced millions of people to change their lives—to have a Total Money Makeover. Are you next?

This book and what I have or have not said in it has generated a lot of negativity and name-calling.

That is fun. Not fun because I set out to offend or because I love reading the nasty things people often say.

It is fun because the negativity means two things: one, for some people, we are touching a nerve that needs to be touched in order for them to change their lives, and two, I ...

Aristotle once said, “To avoid criticism say nothing, do nothi...

My grandmother used to say, “Those convinced against their will are of the same opinion still.”

So it is appropriate that I tell you what this book is NOT.

This Book Is NOT Sophisticated or Complicated

In the financial world we have been taught to be arrogant snobs. Some believe that simple ideas are not profound, that instead, simple ideas are for the “little people.” That is a false and arrogant notion.

Most of us know what to do; we just have trouble doing it. How do you lose weight? Exercise more and eat less. I know that, and yet I bought and read a couple of books on the subject while I took action, and I lost thirty pounds. Did the authors of those books tell me big ideas that were groundbreaking? No, they simply gave me an action plan and some supporting details to what I already knew had to be done. Welcome to my world.

There are several people in our country today who are ignorant on the returns offered by investing well. Ignorance is not lack of intelligence; it is simply “not knowing.”

Does that mean you can expect to see 12 percent growth every year? Of course not. That’s not how this thing works. The market goes up and down all the time, and sometimes it’s a pretty wild ride.

Just looking back over the past few years as of this writing, it looks like a roller coaster. In 2009, the market’s annual return was 26.46 percent. In 2010, it was 8 percent. In 2011, it was actually down for the year at -1.12 percent. But true long-term investors don’t worry too much about the year-to-year returns. They look at the history over the long haul, knowing that some years it’ll be up, and some years it’ll be down.

So don’t let anyone tell you that you can’t predict a 12 percent rate when you are considering investments for ten years or longer.

This book is about life. I’ve already said that personal finance is only 20 percent head knowledge. The other 80 percent—the bulk of the issue—is all about behavior.

seldom list my formal academic credentials because, honestly, I don’t think they are important. I have met so many broke people with financial credentials that I almost think it discredits me to have had formal training. Yes, I have a degree in finance. Yes, I have been or am licensed in real estate, insurance, and investments. Yes, I do have many of the stupid letters to put after my name. But the thing that qualifies me most to teach about money is that I have done stupid things with zeros on the end. I have been there, done that. I have a PhD in D-U-M-B.

So I know what it is like to be scared and scarred. I know what it is like to have my marriage hanging by a thread because of financial stress. I know what it is like to have my hopes and dreams crushed by my own stupid decisions.

The other huge qualifier is that I used the principles I teach to personally build wealth. My wife and I have truly lived this book. The th...

So don’t take financial advice from broke people.

I stated earlier that personal finance is 80 percent behavior. To properly view behavior and to understand how to change behavior intelligently, we must consider several things. Behavior intelligently viewed takes into account the emotional, the relational, the family history, the socioeconomic impacts, and the spiritual.

So I openly discuss the spiritual in this book. As a Christian, I include some Bible verses.

“Proven Plan to Financial Fitness”

So I upset both sides—those who don’t like it because I include spiritual thoughts in my teachings and those who don’t believe my writing is spiritual enough. Either way, you have been warned.

But I always answer the same questions with the same answers even though sometimes folks think their situation may be different. It isn’t different. The principles stand, and they work every time.

Financial Peace is “what to do with money.” It is a great textbook for common-sense money management.

So how is The Total Money Makeover different? It is more than a “what to do” book—it is a “how to do it” plan. This is a process book. We are aiming at carefully weaving inspiration and information together into a step-by-step plan.

If you are looking for a ton of new information because you are someone who only gathers facts and figures, then you will be disappointed.

Many Financial Peace readers have told me that The Total Money Makeover gave legs to the concepts to which they had been introduced, so they were thankful to read it as well.