The Gimcrack Miscellany

Thoughts On The Total Money Makeover

Posted on 30. Nov, 2007 by The Gimcracker in Theory & Philosophy

Yes, that’s a $5,000 bill, which did actually exist at one time (as did the $10k and $100k bills). But that was before VISA-vis hell, Discovered in debt, Bastard Card, and American Express train to bankruptcy took away our need for large denominations.

That didn’t make sense. Vis-a-vis. Ergo. Concurrently. Hitherthenceforththeless.

What I’m getting at is, I just finished listening to Dave Ramsey’s Total Money Makeover, which promises to get you out of debt and back on track financially in a few years’ time. I had a few problems with some of Ramsey’s points, especially when he goes heavily into the myth/fact section, but generally it was a very good audio book. It was very inspirational and motivating for people swimming in a deep sea of debt, as well as people who are on the right track but need confirmation that their efforts will be rewarded.

This guy was a millionaire by the time he was 26, lost it all a few years later, and spent 15 years building back his wealth. Now he has a radio show, has written a few books, and councils thousands of financially secure and insecure people. Best of all, he didn’t stumble upon any magic formulas or get rich quick schemes; rather, he details 7 “baby steps” (a What About Bob reference) for becoming totally debt free and getting yourself to the point that you can use money for the three real reasons it exists:

1. Having fun
2. Investing
3. Giving

He is a Christian and believes firmly in the principles of giving, avoiding becoming a slave to money and putting up false idols, and that the love of money is the root of all evil. Here here. Now if I could only anchor these principles to my every day life.

Luckily for me, I have a wife who is financially savvy and has the tendency to save. This compliments my lifestyle since I have a tendency to spend. I have learned most of what I know about money from my parents, my wife, and, now, Dave Ramsay, who hammered home a lot of the stuff I already knew in my head that I’ve been trying to teach my heart.

Ramsey suggests a whole life makeover rather than a purely money makeover. Our behavior needs to change entirely, especially us Americans. His unorthodox views are a smack to the face of “broke finance professors” who say that debt is a tool. The Total Money Makeover tells us exactly the opposite: there is nothing good about debt.

Some of the points in the myth-debunking chapters contained flawed arguments and were not nearly as strong of points as they should have been. For instance (the facts may not be entirely accurate, but the argument is the same):

Myth: a good way of building credit is to get a credit card in college and maintain a zero dollar month-to-month balance.

I thought maybe he was going to say it’s not a good way because of such and such reason – like it’s bad on your credit score or something. But he goes on to “debunk” it by saying:

Fact: 70% of Americans don’t maintain a zero dollar month-to-month balance

This is a classic example of red herring fallacy. He changes the subject by presenting a similar true argument that diverts attention away from the real issue. I don’t care about 70% of Americans, I want to know if that’s a good way to build credit. He goes on to refute several other similar myths using this same tactic. I know what he’s trying to say, and I completely agree with him, I just wish he would say it without using a flawed argument and thereby losing some of his credibility.

Overall, I would definitely recommend this book. It sure has given me a lot to think about and inspired me to get to the point where I can use money for it’s original intent: to help myself and help others in need to the Glory of God, not the glory of the CEO of Visa’s new yacht.

O snap, I got paid today… I was just kidding about all that, by the way. I’m going to Best Buy.