Respected financial expert Dave Ramsey offers a comprehensive plan for getting out of debt and achieving financial health. Against a playful backdrop of fitness terminology, Dave gives solid, hard-hitting advice needed to make your goals a reality. Filled with both the "hope" and the "how-to," The Total Money Makeover includes:

• Useful worksheets and forms
• Readable and informative charts and graphs
• The four factors that keep people from getting in shape financially
• Photos and amazing stories from people who have succeeded following The Total Money Makeover plan

The Total Money Makeover is a necessity for everyone in need of a financial makeover. Readers will learn to live by the The Total Money Makeover motto: "If you will live like no one else, later you can live like no one else."

The TOTAL MONEY MAKEOVER

A Proven Plan for Financial FitnessBy Dave Ramsey

Nelson Books

Copyright © 2007 Dave Ramsey
All right reserved.
ISBN: 978-0-7852-6326-5

Contents

Introduction...................................................................................ixWhat This Book Is NOT..........................................................................xiiiMeet The Winners of The Total Money Makeover Challenge.........................................xix1. The Total Money Makeover Challenge..........................................................12. Denial: I'm Not That Out of Shape..........................................................93. Debt Myths: Debt Is (Not) a Tool...........................................................174. Money Myths: The (Non)Secrets of the Rich..................................................525. Two More Hurdles: Ignorance and Keeping Up with the Joneses................................776. Save $1,000 Fast: Walk Before You Run......................................................937. The Debt Snowball: Lose Weight Fast, Really................................................1098. Finish the Emergency Fund: Kick Murphy Out.................................................1339. Maximize Retirement Investing: Be Financially Healthy for Life.............................15110. College Funding: Make Sure the Kids Are Fit Too...........................................16811. Pay Off the Home Mortgage: Be Ultrafit.....................................................18312. Build Wealth Like Crazy: Arnold Schwarzedollar, Mr. Universe of Money.....................20313. Live Like No One Else......................................................................219Budgeting Forms................................................................................225

Chapter One

The Total Money Makeover Challenge

"As lost as a ball in tall weeds!" That is exactly how I felt. Although it was fifteen years ago, I can still taste the emotion as if it were yesterday. Out of control, lost, no sense of power, I felt dread creep across the room like the afternoon shadows on a cold winter's day. Sitting again at the kitchen table with too much month left at the end of the money, I was not having fun. This "adult" stuff where a wife looks to you to provide and kids expect to be fed and kept warm was not exactly working. I didn't feel like some powerful adult; instead, there was a little boy inside me who was very afraid-afraid of this month's bills, afraid of this month's mortgage, and absolutely terrified when I considered the future. How was I to send kids to college, retire, enjoy life, and not live at the edge of money worries?

The "Normal" American Family

It seemed every month I sat at that same table with the same worries, fears, and problems. I had too much debt, too little savings, and no sense of control over my life. No matter how hard I worked, it seemed I couldn't win. I was to forever be slave to some banker, to the government, and to the "needs" of my family. When Sharon and I "talked" about money, we ended up in a fight, leaving her feeling afraid and me feeling inadequate. The next car purchase, the next house, the kids' college-our entire future seemed out of reach.

I didn't need a get-rich-quick guy to pump me up or tell me to be positive. I didn't need a secret formula to riches. I wasn't afraid of hard work or sacrifice. I didn't want to "feel" my way into being "positive." I was positive of only one thing: I was sick and tired of being sick and tired. I was tired of sitting down to "do the bills" and having a heaviness come over me. The hopelessness was overwhelming. I felt like a gerbil in a wheel-run, run, run, no traction, no ground covered; maybe life was just a financial illusion. All the money came in, all the money went out, and only the names were changed to protect the innocent. I owe, I owe, so off to work I go. You know the drill and all the clichs that go with the drill.

Oh, some months everything seemed to work, and I thought maybe we were going to be okay. I could tell myself then, "Oh well, this is how everyone lives." Those times offered enough wiggle room that I could continue to lie to myself that we were making headway, but deep down, I knew we weren't.

I Did It My Way, and My Way Wasn't Working

ENOUGH! THIS STINKS! I finally decided that this nonplan wasn't working. If you have ever had any of those feelings, you are going to love this book, and, more important, you will love your Total Money Makeover.

Fifteen years ago, my wife, Sharon, and I went broke. We lost everything due to my stupidity in handling money, or not handling it, as the case may be. Hitting bottom and hitting it hard was the worst thing that ever happened to me and the best thing that ever happened to me.

We started with nothing, but by the time I was twenty-six years old, we held real estate worth over $4 million. I was good at real estate, but I was better at borrowing money. Even though I had become a millionaire, I had built a house of cards. The short version of the story is that we went through financial hell and lost everything over a three-year period of time. We were sued, foreclosed on, and, finally, with a brand-new baby and a toddler, we were bankrupt. Scared doesn't begin to cover it. Crushed comes close, but we held on to each other and decided we needed a change.

So after losing everything, I went on a quest, a quest to find out how money really works, how I could get control of it, and how I could have confidence in handling it. I read everything I could get my hands on. I interviewed older rich people, people who made money and kept it. That quest led me to a really, really uncomfortable place-my mirror. I came to realize that my money problems, worries, and shortages largely began and ended with the person in my mirror. I realized also that if I could learn to manage the character I shaved with every morning, I could win at money. That quest, the one that ended with me staring at myself in the mirror, led me on a new journey over the last fifteen years: the journey of helping others, literally millions of others, take that same quest to the mirror. Live Events, Financial Peace University, The Dave Ramsey Show (talk radio), and the New York Times best-sellers Financial Peace and More Than Enough have enabled me to tell millions of Americans what I have learned-the hard way-about money.

The Big Challenge: Find a Mirror

I have a challenge for you. Are you ready to take on the guy or gal in your mirror? If you are, you are ready to win. I rediscovered God's and Grandma's simple way of handling money. Wealth building isn't rocket science, which is a good thing for me (and probably you). Winning at money is 80 percent behavior and 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. If I can control the guy in the mirror, I can be skinny and rich. We will let other books work on the skinny, and I will help you with the rich part. No, there are no secrets, and yes, this will be very hard. Hey, if it were easy, every moron walking would be wealthy.

So my Total Money Makeover begins with a challenge. The challenge is you. You are the problem with your money. The financial channel or some tape sets aren't your answer; you are. You are the king of your future, and I...