The Total Money Makeover
by Dave Ramsey
Key Concepts
Baby Steps
A sequential seven-step plan to achieve financial peace.
Debt Snowball
Pay off debts from smallest to largest, gaining momentum as each is eliminated.
Emergency Fund
Build a cash reserve to cover unexpected expenses, preventing new debt.
Gazelle Intensity
Attack debt with fierce, focused urgency, like a gazelle fleeing a predator.
Live Below Means
Consistently spend less money than you earn to create margin for saving and investing.
Action Items
Save $1,000 for a starter emergency fund immediately.
List all debts from smallest to largest and attack them using the debt snowball method.
Stop all debt accumulation, including credit cards and new loans.
Create and stick to a zero-based budget every single month.
Invest 15% of your household income into retirement after becoming debt-free.
Core Thesis
Follow a disciplined, step-by-step plan to eliminate debt and build lasting wealth.
Mindset Shift
It shifts the perspective from debt being an insurmountable burden to a solvable problem with a clear, actionable path to financial freedom.