Hey you all. I am actively getting my finances in order so I can be debt-free and begin building wealth. I have saved about $1,500 in my emergency savings account and now I am working on ridding myself of debt starting with paying off my car. Currently, I am reading Dave Ramsey’s Total Money Makeover and I have decided to journal daily my key takeaways and information that I find interesting.
I have tasked myself with reading this book in two weeks. This will ensure that I take my time to really understand and comprehend the information that he shares and explains. My goal is to learn tips that I can actually put into practice along my financial journey.
Chapter 1: The Total Money Makeover takeaways
Takeaway # 1:
Getting our money affairs in order begins with us. We have to look in the mirror to decide what we are willing to put up with. Dave Ramsey states that “winning at money is 80% behavior and 20% knowledge.
I have found this to be true. I began my journey to be debt-free in August 2019 and since then I have noticed a trend. I will pay off my credit card and then I will run it back up over and over again.
So, using me as an example, I know how debt accumulates. Debt happens when you spend money that you don’t have. In order to not go into debt, you need to stop spending money that you don’t have. Simple.Well, I have that knowledge, but for some reason, I continue to end up with credit card debt. The reason that happens is that I continue my old habits such as buying clothes, eating out, and trying to keep up with the Joneses. My debt isn’t even justified because I am not even spending it on things that I absolutely need. I know what I need to do to get out of debt but I still struggle to change my habits. So I can see how Dave Ramsey got to that conclusion.
I also know that that statement is from a point of the privilege of having access to financial knowledge. Many Americans struggle because of lack financial knowledge or they feel like they can never get out of the hole. We don’t learn about finances in school or at home (sometimes), so a lot of people are already behind the ball game So when they do obtain the knowledge it is even more challenging to change their money habits because they are so ingrained in them.
Takeaway #2
The total money makeover motto is “Live like no one else, so later you can live like no one else”
This motto is a reminder that while undergoing this Total Money Makeover challenge your life will be very different from your counterparts. That you will make a lot of sacrifices but these sacrifices will be worth it because you will be able to live like most people can’t.
What I have noticed about Dave Ramsey from previous research is that he has a very aggressive way of tackling debt. He recommends you live off the bare minimum and spend no money on luxuries while tackling debt. So while everyone else is out having fun, you will be working, finding other opportunities to increase your income and not spending money on fun until all debt is paid off.
I like this quote because it is very motivational. What I do know about the Total Money Makeover is that I don’t want to live off the bare minimum, I want at least $100 in my discretionary fund so I have adapted my budget to something that I can manage. If you can infer, I am a little familiar with Dave Ramsey’s practices but this is my first time actually reading the book.
Takeaway #3
The only person that is holding you back from taking control of your finances is yourself. In the book, Dave mentions “no dream job or sky-high salary will fix you, though it will help”. The moral of the story is if you do not know how to manage a $45,000 salary you won’t know how to manage a $100,000 salary. At the core, money management is the same no matter how you spin it. I think there are some exceptions to this, but I don’t plan to dive into that today.
After reading the first chapter of the book, these are my key takeaways. If you are reading the book what do you think about it so far?