I surfed the web about personal finance and I came across Dave Ramsey’s name more and more often.

Encouraged by the positive reviews I decided to give a chance to the book “The Total Money Makeover: A Proven Plan for Financial Fitness”.

But first of all, who is Dave Ramsey?

Dave Ramsey is a writer / podcaster / youtuber who deals with the topic of personal finance. With his books and social channels, he shares advice to his public on how to manage their finances and helps tens of thousands of people on their path to be debt-free.

The interesting thing is that Dave hasn’t always been a finance guru, quite the opposite. At 28 he entered the real estate market by contracting debts to buy property. When the bank that lent him the money was acquired by a larger one, the latter requested the immediate repayment of the loan. Unable to pay, he had to file for bankruptcy. From that moment, thanks also to his family, he declared war on debts and over time he began to divulge his advice through books and his highly followed social channels.

I leave you the link to his YouTube channel:

He created a simple 7-step plan that he calls “Baby Steps” to help others change their behaviors that keep them poor and help them get out of debt. The advice he gives is simple and in many cases it just seems like the advice your grandmother would give you on money. 😄

THE BOOK

The book is dedicated to those who are looking for a structured plan, to those who want to be free from debt and to build a life far from myths regarding money. Although the book focuses mainly on the American situation (for example credit card debt), many of its tips can also be applied here in Italy.

The first half of the book tries to prepare the reader for the 7 steps by trying to dispel the myths and common sense about money and how to manage it. For example having a monthly budget helps a lot about tracking expenses. In addition, the whole book is interspersed with stories of people who have followed these steps that have led them to be free financially and how this has changed their life.

The second half instead talks about the famous 7 steps and these steps are:

Baby Step 1

Save € 1,000 in cash as an emergency fund. Having this money aside, allows you to cope with the inevitable emergencies that will happen without making further debts.

Baby Step 2

Pay all debts (except home loan) through “Debt Snowball”. For example cars, personal loans, household appliances etc. All debts should be sorted from the smallest to the largest, paying the minimum for all other payments except the smallest, trying to close it as soon as possible. As soon as this is closed start paying the second smaller one with the money saved by the first one and so on.

Baby Step 3

With the money saved from debt, plump the emergency fund up to 3-6 months of expenses.

Baby Step 4

Invest 15% of your income in a pension fund.

Baby Step 5

Saving money for the university of the children. This is a typical only American case, in which the cost of college is decidedly higher than in Italy and which often forces young people to take out loans for university.

Baby Step 6

Pay off your mortgage before the deadline, so that you are free of debt.

Baby Step 7

Building wealth, investing the money you used to pay off debts and donating part of them to the community.

COMMENT

The book is simple and straightforward and will make you think about how you are managing your money. If you are looking for a book that talks about personal finance and you feel the need to change your spending habits, I highly recommend it.

PURCHASE:

https://amzn.to/3d2wgNp