Book Review: Total Money Makeover
I recently relistened to Dave Ramsey’s book “Total Money Makeover” because I remember it being pivotal to how I spent my money after completing University for my nursing degree. At the time I was $40,000 and then some in debt because of student loans despite living at home for most of it.
TL;DR I am super broke now, I need some motivation, and I’m working hard to get my finances sorted out again.
After moving into my first, grown up apartment building, by myself, it came crashing down on me that yes, I had to afford my apartment and its associated costs, pay off my student loans, save for a wedding (being engaged to my ex already), and pay for transatlantic flights to see my ex in the UK.
And you know, travel, be fashionable, and live my best life.
With all the changes going on in my life, it was safe to say I was feeling overwhelmed. Particularly about money since I never really had any and now I had to learn to manage everything all at once.
Not long after I had settled into my own apartment, having a touch of insomnia from ALSO not knowing how to manage my sleep in my first shift work job, I came across a blog that mentioned “Total Money Makeover”. I downloaded (aka torrented, because that was a thing) the audiobook and finished it in a few days. It’s about 6 hours long, so also doable in one day if you had that sort of attention span.
Some of the concepts I was already familiar with, like debt snowballing and having an emergency fund at least 3 months worth your salary. They were concepts my mom had taught me, having been exposed to practical and theoretical economic and financial concepts all her life. It was reassuring to hear another source other than my mother telling me about paying off my debt and saving money. The problem was, I didn’t REALLY know how to achieve these goals, and besides saving, what saving money could do for me.
Because I was so far off saving for retirement or investing money, I didn’t think about those steps or really pay attention to what Dave Ramsey was saying at the time. I did, however, manage to pay off my student loans, pay for a wedding and honeymoon, and go on several transatlantic flights, had a $1000 emergency fund, and two and a half months worth of salary saved.
I had to ruin this success by moving to the UK. It’s not the UK’s fault per se, I made a number of mistakes in the year leading up to my move and the year that I moved. I also put a large portion of blame on my ex husband’s shoulders because he refused to ask for help, to learn and expand his financial knowledge, or to put me in touch with the Family Welfare resources available for family members of the Armed forces settling in.
Still sometimes kills me to this day.
To give further context to this situation, my ex and I had almost totally separate finances until I moved to the UK: it was difficult to have joint accounts in countries where you don’t have a legal status to reside. We also didn’t really talk about the state of our finances. I trusted my ex to have money and manage it well because he always appeared to be able to pay for repairs, lifestyle habits, and travel to see me with no problems. We often spoke about saving, investing, down payments, deposits, etc etc. This led me to assume he was as financially savvy as me.
What he had hidden from me was that despite being paid a really good wage, and getting bonuses from work, he was living in his overdraft. There were zero savings. He also took out a bank loan to buy a car which I advised him not to buy because it was too big and expensive for our situation.
Imagine my devastation when I stepped off the plane and saw this car, while simultaneously revealing to me that he was too close to his overdraft limit to buy me a nice supper until payday over a week later. We got home and there wasn’t even any of our furniture or personal belongings in the house while I sat and ate a plate of fish and chips that we had picked up on the way home.
What had I done?
What really rubbed salt into the wounds was that I had warned my ex that as with any transition to another country, a person may not always find work right away so it was important to have some money saved in case my savings ran out and I would need to rely on him for a short period of time until I got my life sorted. Of course I had savings of my own, but when you don’t have an income you burn through your savings pretty quickly.
It’s difficult to adjust your spending downwards after all.
We couldn’t have predicted that there would be bureaucratic decisions made that delayed my nursing registration and entry into gainful employment as a nurse. Coupled with poor financial decisions, we ended up going deeper and deeper in debt. Even when I finally did start working as a nurse, it seemed to have almost no impact on our financial situation because it seemed like it was permission for my ex to spend more money instead of staying disciplined and paying off debt.
About 18 months after I moved to the UK I had enough, and in an effort to try and regain some control over my life and finances, I opened my first bank account in the UK. I figured if he wanted to be financially irresponsible I didn’t need to go along. In hindsight, this seemed to be the first step in the undoing of our relationship because about 18 months after this I left him.
At first, I did have some control over my life again. Despite having to pay for a divorce and re-learn how to live on my own I still felt like I had more control over my life. I even managed to put a little bit of money aside in the first year and a half (I feel like 18 months is becoming a pattern here…). It was after my mom’s diagnosis of pancreatic cancer that my life started to unravel a little at a time, with moving to Cornwall and being kicked out of the room I was renting (that’s a blog post for another time), and being stuck in various countries during COVID-19 lockdowns.
I am more broke than I have ever been in my life.
Like, actually broke. In debt, missing income, no permanent accommodation, no pension, no sick days, no permanent work contract, etc etc. I was kind of in a position like this last year and after 18 months (har har) I am a little bit sick of living like this.
I’m not terrible with money, but I am not in a good financial position either. I have leaned on some good friends heavily to get back to the UK, to have a roof over my head, and to be able to start making money again. I can see where I have made mistakes, mostly because I trusted the wrong people, and partly because I didn’t feel like there were people I could trust anymore: all I’ve had is my instinct and intuition.
So I felt like I needed to do something. I’ve had chats with various people and friends about finances, I’ve felt really focused about my vision: I know what I want to achieve, and I’m ready to work hard (I mean, I always have worked hard, but I am not feeling like I’m burned out and I’m just needlessly grinding). This series of events has led me to re-read “Total Money Makeover” by Dave Ramsey.
As I had mentioned at the beginning of the blog post, it had been the inspiration and motivation I needed 14 years ago to give me direction and run with it. Dave’s still around with his podcast and if his InstaGram is anything to go by, lots of people are finding their way out of debt at the very least. So what could it hurt? Re-reading his book and following his steps wasn’t going to make me any more broke.
One of the consequences of being 14 years older, experience living in 2 other countries, and a slew of other life changing experiences from the first time I read the book is that I see the world with a slightly different lens. Politics, environment, society, and global events are all absorbed and discerned a little differently, and it’s difficult to stay the naive 22 year old from a small, Canadian city. So when a book or public figure starts making blanket statements, it’s hard not to tilt your head and think to yourself, “Uhm, I don’t think that’s accurate.”
Here are some of the biggest assumptions that “Total Money Makeover” makes throughout:
That every couple and family are CIS gendered and follow the traditional family roles and structure. For example, the husband is the breadwinner and the wife stays home to run the household. If the woman does have a job, the income isn’t considered or relied on. You know, play money.
Mental health is not a consideration. Mental Health diseases can sometimes make it very difficult to think logically and make poor financial, and many suffering from poor mental health can often be overwhelmed with finances, and if they ask for help they are the most vulnerable to be taken advantage of.
Every reader, curious about how to improve their life, will be American. Obviously.
Every reader is a Christian and believes in God devoutly. Standard.
That cash will always carry the same amount of importance throughout society. Since the COVID-19 pandemic, cash has fallen out of favour due to hygiene considerations and the rise of cryptocurrencies really makes you ponder the future of money and wealth.
Food budgeting in the way that Dave Ramsey is describing it only works if you have the space to store bulk food. If you rent a room, you should be sleeping on your chest freezer.
World politics and economies are stable so rising taxes and food costs aren’t factored in. “Total Money Makeover” was written during an economic boom and so many more people had a lot of expendable income. The obstacles that come with an economic recession are not acknowledged.
At one point Dave Ramsey advises married couples, where one spouse is keen to make changes to “grow a backbone” and tell the other spouse off who doesn't want to become disciplined. This statement fails to acknowledge that no 2 marriages are the same and not all people are confident enough to simply be so direct with their spouse. Further, this statement fails to acknowledge that domestic abuse in all its kinds presents large and complex obstacles to financial independence, nevermind becoming wealthy.
That the cost of living will have stayed the same over the decades. It’s worthwhile asking if £1000 really is an adequate cash emergency fund.
I feel like because these assumptions are repeated throughout the book, Dave Ramsey comes across as super preachy and very condescending. Sure, he’s found a formula to build wealth, but he fails to realize that certain amounts of criteria need to be met even BEFORE a person can start to tackle the Steps to Wealth.
Listening to the audio book, there are moments where Dave Ramsey gets so into what he’s saying that he starts shouting. The tone, the context, and the words don’t make it feel like he’s passionate about what he’s saying (although, I’m sure he is), but rather comes across like a drill sergeant. A common reaction amongst many people is that if you are being yelled at, or feel like you’re having something shoved in your face, you either want to dig your heels in and do the complete opposite, or you crumble where you stand.
Now that I’ve spent the last thirty minutes taking a figurative dump on the book, I bet you’re wondering, is there still any value in reading the book? Any value in the advice Dave Ramsey provides? To be honest, yes.
Dave Ramsey can come across as indifferent, and downright ignorant because of the aforementioned, but there is value in having some be brutally honest with you about something like finances. Everyone needs someone who will be honest and upfront with them that you have to take responsibility, be accountable, that there are no shortcuts or any magic formula to manage money. Nevermind building wealth.
Success & Money Won’t Work If You Don’t
The book also doesn’t acknowledge generational wealth, which, to be fair, wasn’t a commonly discussed topic back in 2004. Generational wealth and privilege is a whole other kettle of fish that deserves its own blog post, but I’d like to acknowledge that I am aware that this influences finances and wealth building.
Particularly from my Generation and before (I’m an Elder Millennial, if you must know), we were sold an idea that if you work hard enough you can become wealthy, rich, live large, and retire comfortably. And there’s a certain truth to that statement for me: If I hadn’t moved to another country, with life adding a few extra obstacles, I might have just been able to keep working and keep building on the foundation I had established in my early 20’s. Instead, I’m having to double (triple?) down on working hard now in order to make up those losses and move forward.
We Buy Things We Don’t Need To Impress People We Don’t Like
It had to be said. And I can recall falling victim to this 15 years ago as well. I won’t go into all the details as to why this was true for me in this blog post, but this definitely was reflected on many times over the years. It boils down to that I felt an intense pressure to “have it all” by a certain age or stage of my life, instead of just being satisfied with small, step by step achievements. It didn’t help that my peers and friends all seemed to “have it all” before me or at a faster rate. And for what? To show everyone else how “successful” I was?
All very ironic since I now have the equivalent amount of clothes that can fit into a suitcase, and no more boxes that can fit into my car. I can’t say that I’m any less happy than when I tried to have ALL THE THINGS.
Focus on One Baby Step at a Time
Related to the previous statement, instead of trying to have everything at once, do everything step by step. I’m super guilty of over committing, over planning, and overachieving.
I’ve been told on more than one occasion that “You can only eat a whale one bite at a time.”
I always thought it was a stupid expression, but it’s a good reminder to do one thing at a time, which “Total Money Makeover” does reiterate. Basically, you can’t run before you can walk, and you can’t walk before you can crawl.
The life lesson is that while it’s good to have a vision and want to achieve it, you’ll never get there if you don’t break it down into tiny pieces and achieve one thing at a time. The key is to be patient and have faith that you will achieve these goals that will get you to your vision.
Live Like No One Else, So You Can Live Like No One Else
Soul searching isn’t easy. It’s messy, lonely, and there’s a grieving process involved because often you come to conclusions that don't fit the narrative you grew up with. Breaking away from prescriptive narratives of what you should be and what you should do isn’t easy, and in the same vein, making lifestyle choices that suit you and get you closer to your goals will not be understood by everyone. Or anyone.
Dave Ramsey does say frequently throughout “Total Money Makeover” that you should stop caring about what other people think, how other people live their lives, and what they think about your life. He does a good job of normalizing and encouraging people to make sacrifices and do what’s necessary. He acknowledges that it’s not easy and you will face ridicule, but it’ll be worth it.
As Dave Ramsey so succinctly puts it, “If you will live like no one else, later you can live like no one else.”
And to be honest, that’s my biggest take away from this book.
