The Total Money Makeover- Book Review

For those looking to revamp their money mindset and the way they handle money, The Total Money Makeover by Dave Ramsey has been a popular go-to book. I have already written a post about my thoughts on Dave Ramsey, so I thought I would take this opportunity to review one of his books.

One concept that Dave Ramsey stresses is the idea of personal responsibility when it comes to managing your money. He shares his own story as an example: although he had $4 million worth in real estate by his mid-20’s, he ended up in “financial hell” and eventually declared bankruptcy due to overwhelming debt. This was no doubt devastating to him and his family, but it also motivated him to learn more about money. Specifically, why he had failed, and what he could do in the future to avoid the same mistakes.

“If you live like no one else, later you can live like no one else.”

Dave Ramsey, The Total Money Makeover

This is the motto of this book, and it encapsulates the idea that you need to think and act differently than the masses when it comes to money. Our consumerist society places a lot of value and emphasis on spending, not so much on living within or below our means.

It’s so easy to cast the blame on external circumstances: our upbringing, lack of financial education, the government, etc. But Dave Ramsey doesn’t care; he turns the table and challenges us to rise above the past and look towards the future.

A good portion of the book is dedicated to the behavioral side of personal finance, including chapters that focus on the following: denial, debt myths, money myths, ignorance, and keeping up with the Joneses. Here are some highlights:

  1. Debt is a way to build prosperity (a myth): With easy credit in the form of credit cards, auto loans, mortgages, and student loans, you can convince yourself that debt is a normal part of life; therefore, there’s little risk to having debt. Dave argues that carrying debt is very risky, but we as a society have been conditioned to ignore the risk and simply carry on by accepting this debt as normal.
  2. You aren’t born being financially smart: Financial savviness is learned, not innate. If you weren’t lucky enough to be born into a family, community, or culture that talks about being smart with money, then chances are you aren’t going to be smart with money.
  3. Stop keeping up with the Joneses: According to Dave, the Joneses don’t know how to do math. So it would do you a lot of good if you just ignored what the Joneses are doing and focus on yourself instead.


People understand the basic concept of paying off debt and saving money for the future, but Dave has come up with a plan that aims to help his readers reach financial peace in a step-wise fashion. Here are his 7 baby steps:

Step 1: $1,000 emergency fund: It’s hard to make any headway with your finances if you keep having emergencies that delay your progress. This is why the emergency fund is so important– emergencies will happen, so you might as financially prepare for them.

Step 2: Tackling debt: Here, Dave Ramsey introduces the idea of using the debt snowball to pay off your debt. You list your debts in order to smallest to largest balance, ignoring interest rates. You start aggressively paying off your smallest debt first while paying your minimum payments on your other balances. After you pay off the smallest debt, you then take this monthly amount and apply it to the second smallest debt. This is repeated for all remaining debt, not including the mortgage. This method forces you to always pay above the minimum amount and eliminates debt more quickly since it is a very focused strategy. Another method is the debt avalanche, where you start with the highest interest debt and work your way down to the lowest interest debt. This method will save you money in interest in the long term, but many people prefer the debt snowball method because you’re more likely to stick to a plan that shows quick results, building momentum to tackle that next debt.

Step 3: Finish your emergency fund: Ideally, your emergency fund will have 3-6 months worth of expenses.

Step 4: Invest 15% of income into retirement: Here, Dave mentions a specific asset allocation using growth mutual funds. He also recommends starting with the match for retirement, next maxing out your Roth IRA, then contributing the max to your workplace retirement account.

Step 5: Save for college: Once you take care of yourself, in the form of saving for retirement, you can now focus on ways to make college more affordable for your family.

Step 6: Pay off the mortgage: It’s time to tackle this last remaining debt.

Step 7: Build wealth: This is what financial freedom looks like. You are debt free, with no obligations to pay anyone back. You can use your money to continue saving/investing, flex your philanthropy muscles, and/or just have some fun.


In general, I agree with many of Dave’s principles. I am also a believer that there is a huge behavioral component to how we deal with money. The sooner we can learn to be self-aware of how we think about and handle money, the sooner we can start making some smart choices and make the math work in our favor.

I am also a big fan of the debt snowball. This was the method I used to pay off my debt, and at the time, I didn’t know that there was a term for how I was paying it off. It was incredibly gratifying to see those balances go down to zero, and it gave me extra motivation to move on to the next debt.

Now, here are some areas where following the Dave Ramsey method may not work in your favor:


For those coming out of school with large student loan debt burdens (six-figure debt), it may take 20-25 years to pay off your loans if you are on an income driven repayment plan. Yes, I know that Dave Ramsey hates IDR plans and thinks everyone should be “gazelle intense” when it comes to paying back their loans. I am also an advocate for paying your loans back in full, even if it hurts a bit.

But I also realize that there are people that legitimately need this option. Even those that are not paying back their loans on an IDR plan can expect that it can take up to 10 years if they opt for the default standard repayment plan.

If you graduate at age 25, it is not realistic to think that you have to wait 10 years, at the age of 35, to do the following:

  • fully fund your emergency fund
  • start saving for a house
  • start contributing to your retirement account
  • plan on having children
  • saving for college if you already have children

There are plenty of veterinary graduates who go on to do internships, residencies, and attain additional advanced degrees. There are those who are coming to veterinary medicine as a second career. There are also plenty of grads who took time off between their undergraduate school and veterinary school. Diligently following Dave Ramsey’s 7 steps pushes back the age where they can even start making headway with these other financial/life goals.

Of course, these 7 steps are not written in stone. I’m willing to bet that the majority of people who follow Dave Ramsey are tweaking their steps to fit their own financial situations, as they should. However, due to his heavy emphasis on paying off debt, it can be difficult to figure out how to balance debt, saving/investing, and spending. Remember, debt is just one aspect of your financial picture. You need to be aware that improving your financial wellbeing does not revolve around debt alone.

Credit Cards

Dave Ramsey is famous for being anti-credit card. There are studies that show that the use of credit cards can, indeed, increase your spending. He advocates for using debit cards instead, or simply going to cash.

Credit cards are so tempting because many of them come with perks, such as cash back rewards and travel rewards.

If you are having a lot of trouble paying down debt and keeping your spending in check, then a credit card may not be your best option. However, if you’re responsible about using credit, faithfully pay off the balance every month with no issues, AND you’re on track with your financial goals, I wouldn’t worry much about your using credit cards on a regular basis.


Dave Ramsey has gotten a lot of flack claiming that you can expect a 12% return on investments, specifically in growth mutual funds. He is also a big proponent of using financial advisors that work on commission.

I’ve written about financial advisors and investment philosophies. I see a lot of opportunity for conflicted advice with an advisor that works on commission. Dave Ramsey’s investing philosophy also seems to favor active management that focuses on rate of returns.

I don’t have any experience with his ELP’s (Endorsed Local Providers, which includes financial planners, realtors, and CPA’s), so I won’t make any blanket statements as to how they dole out financial advice. I want to reiterate that it’s so important to find an advisor that will work as your fiduciary and matches your own philosophy when it comes to investing. Also, don’t use 12% as a realistic benchmark for future rate of returns.


This is a great introduction to behavioral finance, so if you’re the type of person that needs that mindset shift when it comes to money, this is a good place to start. If you previously thought that debt is normal and an expected part of your everyday life, this book will help you see otherwise.

Adding the seven baby steps gives structure for readers that want a money makeover. However, remember that the seven baby steps should be used as guidelines. Stay focused on debt, but remember not to ignore or delay the other important parts of your financial life that are outlined in steps 3-7. You WILL conquer all 7 baby steps in your own time!


  1. The Vetducator on April 3, 2019 at 3:46 pm

    Great to put a veterinary spin on this! I’m surprised you didn’t comment on his 15% savings rate, though, which is really quite low.

    • Financial Wellness DVM on April 3, 2019 at 9:07 pm

      I agree that 15% is on the low side if you’re wanting to give yourself a nice financial cushion. If I can convince anyone to save more than what they’re saving now, regardless of their percentage, then I’d be happy!

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