1. Lauren Hardman
Personal Finance 1050
November 27, 2010
Reflective Writing on “The Total Money Makeover”
My husband and I began reading The Total Money Makeover in June of this year. We
were drowning in debt and needed a solution. Fortunately we were in a position at that time to
grow our income at a rapid pace in a rather short amount of time. When we were married just
at the beginning of the year, our debts were combined and I then assumed partial responsibility
of our financial situation. I was very oblivious at first because my share of debt was rather
minimal but it wasn’t long until I saw the big picture and realized we could not live the way we
were living. The month of May arrived and we were off to do the summer sales thing. This job
opportunity has been one of our greatest blessings yet. Once the paychecks began coming,
Dave Ramsey’s book became our best friend. I am excited to discuss and reflect on the words
which Dave Ramsey has so thoughtfully placed between the covers of this book.
Before chapter 1 begins, Dave Ramsey explains that his book is neither sophisticated nor
complicated. We found this to be true as we began reading along. Given that we were already
feeling downtrodden about our financial situation, Dave Ramsey did very well by providing
several dozens of laughing opportunities through his bold, no nonsense, yet humorous
approach. I really appreciate the fact that he uses real life examples of families and couples
who were once overloaded with debt, but regained financial peace. My husband and I
committed to the challenge he issues to all people who are willing to gain financial freedom. In
a nutshell he says by following and implementing his suggestions, people will achieve more
financial success than they ever thought possible.

2. One of my favorite truths he points out is the response to the myth, “I don’t have time
to work on a budget, retirement plan, or estate plan.” The truth is, “you don’t have time not
to.” I absolutely love that. He spoke plainly to me that making your financial situation a priority
is vitally important. Luckily I grew up with and have always had regard to my current and future
financial decisions. Dave Ramsey in chapter 2 speaks about being aware of your current status
on the financial meter. Change is hard for a lot of people in regards to their current lifestyle but
back in June, my husband and I were certainly not in denial any longer and were willing to do
whatever it took to not be enslaved by our debt.
In chapter 3 I learned over a dozen financial myths and statistics. I actually grasped the
concept that having a car payment does not have to be “a way of life” or mean “you will always
have one.” People who are millionaires today did at some point drive a used, reliable car that
they could afford. Some of the truths to the myths are no brainers but apparently millions of
people fall into the ensnared traps leading them down the path of financial misery. Along with
the myths, the statistics available in this book are also incredibly shocking. Knowing them has
forced me to avoid being included in the particular numbers.
The next chapter discusses ignorance and keeping up with the Joneses. I personally
know several people who feel compelled to keep up with having “stuff” their friends have or
other family members have. It is unfortunate to get caught up in that mindset because most of
the time the “Joneses” are not financially stable and have just as many financial problems as
the ones trying to keep up with them. I have learned that living within my means will provide
me with the most peace of mind. When you are doing that, you are being real with yourself and
giving in to financial peer pressures is less likely to happen. Once I understood all the myths,

3. statistics, and that I had to live within my means, I was ready for the next step.
The next step is to put $1,000 in savings. It may be rough at first, but it’s the first baby
step in accomplishing financial freedom. This step is to eliminate feeling overwhelmed and
frustrated. Before stashing the $1,000, a written budget must come into the picture. My
husband and I have done rather well with the written budget. Laying out the wants verses
needs was definitely a challenge. Dave’s quote is “you have to tell money what to do or it
leaves.” SO TRUE! Planning out expenses WITH your spouse is the only way to win. After the
written budget was set in place, the $1,000 emergency starter fund began giving me a greater
peace of mind. The purpose of this emergency fund is to help people break the cycle of credit
card use. After my husband and I transferred this money to a savings account, I felt a better
sense of control over our financial situation. Taking these “baby steps” I felt confident
continuing on even though our debt was not completely eliminated. Once the budget and
emergency fund are checked off, the debt snowball begins.
Using the debt snowball technique, Dave instructs people to start with the smallest bill
and begin paying it off completely. After that bill is wiped out, the next one is tackled. Once
that bill is tackled you move to the next and so on. At first we were a little leery about it, but we
put our trust in Dave Ramsey and followed the plan. My husband’s summer sales job allowed us
to complete the debt snowball in just 5 short months. We had a total of $72,000 in credit card
debt, loans, and ROTC repayment to the army. As we began knocking one payment off after
another, our minds and behaviors transformed. We realized we should only have things that
are a necessity and get rid of the things that weren’t. Overall we caught the vision of paying
cash for things. Having the mindset of paying cash for everything truly eliminated lousy

4. purchases. Dave Ramsey said that 65% of people do not pay off their credit cards each month.
After ridding the debts, “the Total Money Makeover in our hearts paves the way for a Total
Money Makeover of [our] actual wealth”. I was completely blown away at this step and am
forever thankful we followed through. Following baby step number 2, finishing the emergency
fund takes place.
Baby step 3 is about adding to the emergency fund created at the beginning of the
makeover. This fund consists of 6 months living expenses for when a rainy day comes along.
This fund acts as an umbrella because we cannot control when the rainy day comes. My
husband and I have not mastered this step just yet but I totally believe in it and will be excited
when the day comes that we have 6 months expenses saved up. Dave Ramsey emphasizes that
this fund to be used only on emergencies and not on purchases that should have been saved
and planned for in the first place. This chapter also discusses options when purchasing a home.
Dave explains the time to purchase a home is AFTER the debt snowball is complete and the 6
months emergency fund is sitting pretty in your bank account. He also suggests not going
beyond a 15 year fixed rate mortgage. I am feeling confident that my husband and I will be in
this exact position when we decide to purchase our first home. When the mortgage is your
only payment it is now time to focus on investments.
Investing 15% of your income in retirement is baby step 4. USA Today reported that out
of 100 people age 65, 97 of them could not write a check for more than $600. 54 of those 100
are still working and 3 are financially secure. Sounds pathetic to me! Dave suggests to invest
15% of the gross income and to not include the company match. I do not have any experience
in investments but I am a firm believer in taking advantage of them. We are instructed to learn

5. more about investing and which investment options are available. Most people do not invest
because they are uneducated about what they are getting into. Investing builds wealth and
wealth is a synonym for financial freedom.
Along with investing, baby step 5 about college funding should take place. To play it
safe, the suggestion is saving 7% per year. Dave discusses what ESAs are and their benefits. An
ESA is an Educational Savings Account that is funded in a growth-stock mutual fund. He also
rants about how many scholarships that are available which people do not take advantage of. I
have firsthand experience with grants and scholarships. They are so worth seeking out!
If you have faithfully completed the steps thus far in the total money makeover, it is
now time to pay off your home mortgage. Being in this financial position puts you at the top
5-10% of Americans. This baby step 6 is extremely hard for some people because they are in
the mindset of settling for “The Good Enough.” This is a dangerous mindset according to Dave.
He says many people who stop on this step of the challenge regret their decision completely.
Having no mortgage only sets you up for greater wealth. People are led to believe they cannot
pay cash for a house. Dave says, “Bet me!” Another pitfall to be aware of is “if your spouse gets
a raise, don’t raise your lifestyle. Save more! Invest more!”
The last baby step is building wealth. Wealth is considered a tremendous responsibility.
It is very easy to get tangled up in debt, but coming out is a major challenge. Dave says he finds
only three good reasons for the use of money. It is good for fun, good to invest, and good to
give. Money should only be used for these reasons at the appropriate times. When money is
used for fun, it is necessary for you to be able to afford it. When placing your money in
investments, you are continually winning. And last, when you are using your money to give, you

6. gain much reward. Dave says you cannot have Total Money Makeover Status until these three
things are done. “Good things will happen when people’s spiritual character realizes wealth is
not the answer to life’s questions.”
I am forever grateful for this book and the opportunities it’s given my husband and I.
Even though we are only on baby step 2, we feel more financial peace than we ever have. I
always recommend this book to my close relatives and friends because I want them to have
their financial burdens lifted as my husband and I have. I can only imagine what the future
holds if we continue on with the steps and make financial freedom a priority in our lives!