Common sense isn't that common anymore

According to the most recent statistics, the average American owes nearly $5000 in credit card debt.   Over three quarters of Americans are living paycheck to paycheck, with nothing saved for emergencies or their future well being.   As the recent government shutdown (over the nation's debt)deomonstrates, Americans from all walks of life have severe problems with money.  While there are many books and programs available that promise to help people get out of debt, the common-sense approach offered by Dave Ramsey has helped millions of people to re-think their relationship to money.  The Total Money Makeover outlines the principles that are mentioned on the national radio program The Dave Ramsey Show. 

Although he has a background in finance and real estate, Dave Ramsey has also had a personal struggle with money.  As a newly married man with two small children, he went bankrupt.  This traumatic event caused him to re-think his approach to debt -- basically, that it was never a good idea to have debt of any kind.  The principles of his program are easy to follow and adaptable to every situation.  The steps to getting out of debt are listed in "the Baby Steps."  Baby Step One is to have an emergency fund of $1000. Baby Step Two is the heart of his system -- the "debt snowball"-- which consists of listing debts smallest to largest (regardless of interest rate), and paying as much as possible toward the smallest debt until it's eliminated.  Once that debt is eliminated, work on the second smallest debt. His view is that it is psychologically uplifting to see debts being eliminated, which will help keep people motivated.  Although getting out of debt might be difficult at first, Dave's philosophy is to spend that tough time "living like no one else" (meaning, not buying the latest gadget, eating out more than at home, or taking expensive vacations on credit) so that later, you can "live like no one else" since you will have abundant extra cash that's not being used for payments or interest on debt.  The steps after paying off debt include paying off the mortgage, saving for retirement and starting a college fund for your kids.  This book comes with helpful worksheets in the back for everything from making a "Monthly Cash Flow Plan" to creating your debt snowball.  There are also many stories of real people throughout the book who have used Dave's plan to get out of debt, even though their original circumstances varied widely.  There are also small boxes of "Dave's Rants" where he gives his (strong!) opinions on the "conventional wisdom" of financial issues.  I can truly say that I'm happy to have found the Dave Ramsey plan, because it inspired me to get out of debt and even pay off my house early.  Everyone can benefit from the principles in this book.  If only we could give Congress a Total Money Makeover!

Disclaimer:  I received a copy of The Total Money Makeover: Classic Edition as part of the BookSneeze program in exchange for this review.