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Book Summary – The Total Money Makeover: A Proven Plan for Financial Fitness

The Total Money Makeover - Book summary

A shocking number of Americans are in poor financial health. 88% of graduating college students have credit-card debts before they have jobs, 60% of Americans don’t pay off their monthly credit card bills, and 49% of American families only have enough savings to last less than 1 month if they lose their household income. This book by Dave Ramsey debunks modern myths about money and debt, and provides a proven step-by-step plan to help you become debt-free and wealthy. In this free version of The Total Money Makeover summary, we’ll outline the foundations and 7-step plan for your total money makeover—if you embrace these ideas and implement the steps consistently, you will become financially healthy and transform your life.

The Total Money Makeover: An Introduction

Transforming your financial situation is about 20% know-how and 80% action. The principles in this book are not new, and are actually very simple. The real challenge is in adopting them and taking concrete action to change the way you think and live. In this book, Ramsey (i) explains various financial principles vs myths, (ii) a 7-step plan to transform your life, and (iii) injects hope/inspiration through stories of people who’ve successfully applied the plan. We’ll now outline how you can improve your financial health. Do get a copy of our full 13-page summary for more details.

Addressing Obstacles to Financial Health

The Total Money Makeover program is built on this underlying principle: if you will make the sacrifices now that most people won’t, you can live later in a way that most people can’t. To successfully embrace the Total Money Makeover, you must first address several mental-emotional obstacles.

The Total Money Makeover summary_barriers to wealth

Overcome Self-denial

The first step is to face up to your financial reality, and take 100% responsibility for your money and life. You can’t address a problem if you don’t first acknowledge it.  Learn more about the 3 common risk denials from our full book summary.

Debunk the Debt/Money Myths

Our modern culture is filled with propaganda and lies designed to influence our buying behaviors and lifestyle choices. To transform your financial health you must first change your perspectives about debt and money.  In the book , Ramsey shares facts and examples to debunk a whole list of debt myths and money myths we’ve been brainwashed to believe. In reality, debt is not a tool that’ll bring you prosperity (it only makes the lenders rich) and there’s no secret or shortcut to overnight riches (so stop dreaming of making easy money or hitting the jackpot). You can get a synopsis of the key debt/money myths (e.g. facts about gold, investment products, prepayments, interest-free loans etc.) from our complete book summary. The real building-block for your wealth is your income; the key to wealth is to free up your income so you can invest and grow it.

Conquer Ignorance and Social Pressure

There’s no point buying things you can’t afford and living a luxurious life beyond your means just to impress others. Learn to prioritize your financial goals over others’ opinions, and become rich rather than appear to be rich.

Once you’ve removed these mental-emotional barriers, it’ll be much easier to achieve your total money makeover without falling back into old habits and thinking patterns.

Total Money Makeover: Your 7-Step Financial Plan

The Total Money Makeover is built on a series of sequential Baby Steps, each acting as a building block for the next step. Just like how you’d eat an elephant 1 bite at a time, you’d go from being financially-overweight to ultra-fit one tiny step at a time. Here’s a quick outline of the 7 key steps:

The Total Money Makeover summary_7-step financial plan

  • Step 0: Start with a written zero-based budget where every dollar you earn is accounted for.
  • Step 1: Set up a $1,000 Mini-Emergency Fund, so you won’t abandon your plan once you hit the next mini-crisis.
  • Step 2: Start your “Debt Snowball”, i.e. your strategy to eliminate your debts, regain control of your income and free up cash for wealth-building.
  • Step 3: Complete your Emergency Fund, so you have 3-6 months of living expenses if you lost your income. The riskier your financial situation, the more you should set aside.
  • Step 4: Build your Retirement Fund using 15% of your income.
  • Step 5: Save Up for College. If you don’t need to attend college and don’t have kids who do, you can skip this step.
  • Step 6: Pay off your Home Mortgage. By this phase, you’re already financially fit and are ready to get ultra-fit. Once you finish this step, you will be totally debt-free.
  • Step 7: Build Wealth. By now, you are debt free, in control of your finances and are systematically planning, saving and investing for your future needs. You become truly wealthy when the returns from your investments are higher than your regular income. At this point, you’ll have money working 24×7 for you, regardless of whether you work.

In our complete 13-page summary, we zoom in on the specific rationale and execution tips for each of these 7 steps, including:

  1. Why/how to create your emergency fund and the dos/don’ts;
  2. Specific steps to progressively remove your debt (yes, you can and should become debt-free);
  3. How to calculate the amounts needed for retirement and college (and the investment options to consider);
  4. Why you’re better off removing your mortgage loans (rather than believe in the myths about them); and
  5. What to do with all that wealth (to maximize your happiness and fulfillment) when you’re truly rich.

Remember: Money alone won’t solve all your problems or make you happy, but it can certainly reduce stress and give you more options in life. Money in itself is also not inherently good or bad–what you do with your wealth will merely amplify who you are.

Getting the Most from The Total Money Makeover

If you follow the 7 steps in the Total Money Makeover plan above, you will definitely become wealthy in the next 20-40 years. The process is the hardest at the start, but it gets progressively easier once you’ve shed some weight and gotten in shape. In this article, we’ve briefly outlined some of the key insights and strategies you can use to achieve desired change. For more examples, details, and actionable tips to apply these strategies, do get our complete book summary bundle which includes an infographic, 13-page text summary, and a 25-minute audio summary.The Total Money Makeover summary - book summary bundle


In the book, Ramsey also shares:

  • Short examples and calculations to illustrate the financially-unsound decisions that we make in our daily lives;
  • Various US-centric examples and illustrations of retirement-related regulations and tools, additional debt and money myths etc; and
  • Many short stories of people who’ve transformed their financial situation with the Total Money Makeover.

You can download Ramsey’s Financial Peace software program or get more details/resources at or

[If you want to be rich, stop following the ignorant masses and start learning from truly-rich people—read “The Millionaire Next Door” to find out how rich people live and build their wealth.]

About the Author of The Total Money Makeover

The Total Money Makeover: A Proven Plan for Financial Fitness is written by Dave Ramsey–an American radio show host, author and businessman. Ramsey graduated from the College of Business Administration at University of Tennessee. In 1988, he filed for bankruptcy as he was unable to repay the loans on his rental real estate portfolio. After recovering financially, Ramsey started to counsel couples at his church, and later developed a range of lessons, materials and tools on financial health and transformation. Ramsey’s company, The Lampo Group, Inc., focuses on financial education. His syndicated radio program, The Dave Ramsey Show, is heard on more than 500 radio stations throughout the United States and Canada. He has written numerous books. Ramsey was named the 2009 Marconi Award winner for Network/Syndicated Personality of the Year and was inducted into the National Radio Hall of Fame in 2015.

The Total Money Makeover Quotes

“Personal finance is 80 percent behavior and only 20 percent head knowledge.”

“What to do isn’t the problem; doing it is. Most of us know what to do, but we just don’t do it.”

“It is human nature to want it and want it now; it is also a sign of immaturity.”

“90 percent of solving a problem is realizing there is one.”

“The lottery is a tax on poor people and on people who can’t do math.”

“The secrets of the rich don’t exist, because the principles aren’t a secret.”

“We buy things we don’t need with money we don’t have in order to impress people we don’t like.”

Click here to download The Total Money Makeover summary & infographic

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