(Disclosure: There are affiliate links in here. This means that if you click through the link and buy something, A.K.A. the book I’m talking about, I will receive some sort of compensation.)
“Where Debt is Dumb, Cash is King, and the Paid-Off Mortgage has taken the place of the BMW as the status symbol of choice.” —Dave
From Riches to Rags to Riches, Dave Ramsey is a highly acclaimed talk show host as well as a financial expert trying to help fellow humans with their financial struggled. After he pulled himself out of bankruptcy he decided to turn his new found knowledge to those who were struggling with similar situations, be it in church, his neighborhood or elsewhere.
He realized that it would be nice to become somewhat lucrative with this growing audience and at the same time his local radio station was planning on going out of business. He offered to take a slot in their station with “The Money Game” and began his talk show that still to this day takes callers where he answers and helps them to find “Financial Peace.”
It was about the time I graduated college (about 6 months ago) that I realized that I needed to make sure my own money affairs were in order. If you’re anything like me, you hate when you look in your bank account and there is less than you expected. For me, it’s a rock in my stomach. A little self-coaching is needed, “It’s okay, going out to eat was a great experience,” “Well, I really needed to go down and see my parents, it’s been a while,” “Let’s take a look and see if there are any areas we can work on.”
I’ve always been very money-minded and very strict on what I treat myself to. I started financial book journey by reading a few books on investing and then I read Robert Kiyosaki’s Rich Dad Poor Dad which gave me an idea of how you should take lots of risk because most of the time, it works out and you make more than you lose.
I can’t say I really agree with that initial thought but he does teach some other good points that I mention here if you want to take a quick look. (It’s a pretty funny read because at one point I talk about how he filed for bankruptcy a few years ago haha! What is more funny than that?)
Ramsey’s book was a 180 approach to Robert Kiyosaki’s. While Rich Dad Poor Dad tries to teach you to take risks and get high returns, Financial Peace is all about saving and investing in good return but lower risk items, mainly mutual funds.
The main focus of Dave Ramsey’s book is fighting debt which a lot of Americans struggle with. His ideas of the Debt Snowball Pay Down and his emergency fund savings sheets are fantastic.
If I had one idea of his that I would like to try but I have not found a way to become efficient at is his envelope system. You take money out in cash and divvy it up among your different expenses: Gas, Groceries, Entertainment, etc. You then use the month’s worth of cash in each section and when there in none in there, you don’t use it. (I would allow for SOME leniency.) Probably what works best with this is that you see your money disappearing both at the grocery store and in your envelopes. Interesting feeling to stomach, right? “What if I get to the end and I blew my cash amount?” That sounds like an opportunity to learn or two reallocate appropriately.
I do like that his wife writes a little bit at the end of each chapter, but some of it does sound a bit forced or possibly even made up. For instance, there was a part where she talked about growing up how he was always the smart one with money and she wasn’t so she had him take care of finances. Wasn’t the first chapter where he had several nice suits, cars, and houses and then filed for bankruptcy?
But you kind of have to take it with good intentions, which they have a great deal of.
His Podcast/Some of his Talk Show:
This is a good topic to talk about.
While his book is a good focus on the money aspects and the idea of debt being dumb and mutual funds being the way to go, his talk show and podcast seem to be focused on people’s personal issues.
He takes in calls and allows people to tel him their money issues. He then goes on to explain different deals and aspects of their financial lives that would be the best idea to either pay down their debt or to build the right kind of wealth. Sometimes there is a husband and wife who have $150,000 in student loan debts but they make $120,000 annually and they want to know what is the best idea for fixing that. Sometimes it is a call from a 29 year old who paid off all of his debts and he is wondering what kind of house he should buy and how much he should put down.
Probably the most exciting type of people on his show are those that drive to Tennessee to participate in his personal Debt-Free Scream. Pretty much what happens is they explain that they paid down a sizable amount of debt and sometimes a house as well. They explain what their method was and what changed in the course of that time money-wise. Then they count down to 1 and yell, “I’M DEBT FREE!!!” It really is worth a few listens.
This is a 9/10 buy for me. Some of this advice is the kind that only seems to hit you when you’re reading a book. As well, if you go to the back, you have the list of documents that come with the book such as a Debt Snowball Pay Down Sheet, a Savings Sheet, and instructions on how to do the envelope method.
This was my second Personal Finance book and a whirlwind difference from Rich Dad Poor Dad. Pretty much if you have some debt and you want a starting point into paying it down or figuring out places to cut down, this book is gold. If you’re otherwise interested in Personal Finance, whether you’re old or young, this book is still a great idea of how Dave Ramsey (another money expert) explains the best way to work with money. And he does have a long track record (as of his initial bad start and redemption) of producing results.
Go ahead. Give it a read. Comment below with what you thoughts of the book or his ongoing podcast and follow me on Twitter at Young Budgeteer for more Book Reviews.