Joe and Cindy were a couple like many couples. They had gone to college (which they paid for with student loans), purchased a car (with which they had monthly payments), and had loads of credit card debt. They weren’t saving for retirement yet, but figured that they would get to that “eventually.”
They ran into a couple of issues recently. They had wanted to adopt a child, but they didn’t have the finances to do so, so they had to rule that option out. They also wanted to invite their extended family over for Christmas, but they knew doing so would cost money, and money was something they didn’t have currently. Life had been stressful for both of them with their jobs, and they wanted to take a short, simple vacation. But even that wasn’t a possibility because of their finances.
Notice something similiar in each situation? Money prevented them from doing the activities they wanted to do; many of which were good and noble activities.
They had made poor financial decisions over the years and now found themselves in a hole they hadn’t realized they’d been digging.
Most of us don’t really think about money until we need it or our out of it. We spend and spend and spend, only to wonder, where did my money go? (Which, by the way, is a direct result of not budgeting.)
We’re not prepared for emergencies, and so we rack up credit card debt when emergencies arise . We want to do social justice and help the poor, but are held back because of money. (The Good Samaritan didn’t seem to run into that problem…)
Why do so many of us allow money to control our lives?
Why do we let money determine what happens in our life, instead of telling our money what’s goin’ down?
I’m convinced that if we knew how to manage our money, and if we could align our behavior to match what we know, we would realize that money is a great tool and blessing to both us, our families, and the world around us.
I’ve been reading personal finance blogs and books for the past seven months, so that I can control my money and so I don’t let my money control men.
I’ve learned a lot of helpful, practical, and even biblical money tips from these various books and blogs. (Yes, the Bible has a lot to say about money. More on that later.) But I recently read something that surpassed all the finance books and blogs I’ve read so far: The Total Money Makeover by Dave Ramsey.
In this book, Dave opens your eyes to stupid money myths that most of society blindly accepts and believes, shows you the truth about money, and then provides you with a proven plan for financial peace and success.
Dave’s plan for financial fitness follows the 7 Baby Steps, which are:
- $1,000 emergency fund
- Pay of ALL debt (except the mortgage, for now)
- Fully-funded emergency fund (about 3-6 months expenses)
- Invest 15% of your monthly income
- Save for your kids’ college education(s)
- Pay off the mortgage (become COMPLETELY debt free!)
- Build wealth and give!
Dave says, “Personal finance is 80% behavior, and 20% knowledge.” The Total Money Makeover is a book that shows you how to manage your money (the knowledge), and motivates you to do it (the behavior). It’s a book that gets to the heart of your money problems and goals: you.
The book is filled with stories from people and families of many different ages and financial situations, so no matter what your age or financial situation is, you are sure to be encouraged and inspired by the many stories throughout the book.
Whether you’re a student who just landed your first job, a married couple swimming in debt, or a 65 year old granny wanting to turn your financial situation around, you are sure to learn the financial lessons and game plan – and be motivated to actually do it – no matter what your age and situation is.
If you only read one personal finance book during your lifetime, read this one. (Hopefully you’ll read more than just one personal finance book during your lifetime, but if you don’t like to read about money, try and at least read this one.)
I’m not there yet, but I’m convinced his plan works because of the countless stories throughout the book (and the many more outside the book), because of the progress I’ve already begun to see in my own life, and because Dave himself is financially ripped (he followed his own advice and is now a millionaire).
Questions: Have you read The Total Money Makeover? What were your thoughts after reading it? What personal finance books have you read that you recommend? Would love to hear your thoughts in the comments below!