The Total Money Makeover Workbook: A Proven Plan for Financial Fitness

The Total Money Makeover Workbook: A Proven Plan for Financial Fitness

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by Dave Ramsey

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Nationally syndicated radio host and money man Dave Ramsey offers a practical and inspiring action plan to help you get in the best financial shape of your life.See more details below


Nationally syndicated radio host and money man Dave Ramsey offers a practical and inspiring action plan to help you get in the best financial shape of your life.

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The Total Money Makeover Workbook

A Proven Plan for Financial Fitness

By Dave Ramsey

Thomas Nelson

Copyright © 2003 Dave Ramsey
All rights reserved.
ISBN: 978-1-4185-7227-3


The Total Money Makeover Challenge

Key Concept #1

No Money ... Is No Fun

I remember the feelings vividly. For several years in my twenties, I faced the end of every month with dread. I had too much month left at the end of my money. I was not having fun.

I wasn't afraid of hard work and sacrifice. I didn't need a secret formula for making money. I didn't need a positive-thinking guru to pump me up and tell me to have a positive attitude. I was simply sick and tired of being sick and tired when it came time to "do the bills." I felt hopeless, as if I were running a financial race with no traction and no ground covered. Money came in and money went out, with nothing REAL to show for my effort or income.

What About You?

Do you feel as if you have full control over your money ... or are your bills controlling you? The amount of control you have over financial matters is often reflected in how you FEEL about money matters in general.

The same thing is true, of course, when it comes to any area of your life in which a "makeover" might be needed.

If you are in very bad health—or your physician tells you that certain numbers in your lab reports and exams are "abnormal"—you may become highly motivated to undertake a new exercise, diet, or better-health plan. If your spouse tells you the end of your marriage is on the horizon—you may become highly motivated to seek out a counselor to help you revamp the way you relate to your spouse and to improve your marriage. There's a feeling that hits the pit of your stomach when you finally wake up and say to yourself, "Something's got to change! I can't continue to live this way ... the fact is, to continue this way isn't really to LIVE. It's just to exist, to endure, to put in the time and the miles and hope I end up somewhere I like."

Before you are truly willing to embark on a Total Money Makeover, you need to face up to how you FEEL about your current financial situation. That will tell you how motivated you are to do something about changing your financial situation.

Plain and simple, if you like your current financial situation, you probably feel pretty good about money matters, and you don't need a makeover.

On the other hand, if you DON'T like your current financial situation, you probably feel pretty lousy about your finances. A makeover is for you!

Exercise #1

How Do You Feel About Money?

I challenge you to take the "Ten Situations Test" below.

Respond to each of the statements below quickly and instinctively with a simple "I like to talk about this" or "I don't like to discuss this."

LIKE to Talk: The "LIKE to Talk" category includes responses such as "I enjoy getting new ideas about this" and "I don't have anything to hide on this subject." "LIKE to talk" should reflect an enthusiasm—not a reluctance—for talking, and a willingness to be open, honest, and candid. Finally, the "LIKE to talk" category should not reflect just an "I've got a pat answer already prepared" attitude, but rather an "I think this is a good opportunity for a candid sharing of ideas and opinions" attitude.

HATE to Talk: Included in the "HATE to talk" category are responses such as "I wouldn't be caught dead discussing this" and "I'd do just about anything to avoid a serious conversation about this." "HATE to Talk" should be checked if you feel reluctance, awkwardness, or dread.

to to
Talk Talk

[] [] 1. Someone asks, "How are you doing financially?"

[] [] 2. Your spouse wants to discuss this month's budget.

[] [] 3. Your tax accountant calls and says, "Let's meet."

[] [] 4. Your pastor wants to have lunch with you (and you know he
wants to discuss the possibility of your making a specific

[] [] 5. Your child asks you to co-sign a loan (or a credit-card

[] [] 6. The money manager in your family says, "I have some concerns
about a few credit-card charges."

[] [] 7. A friend says, "What do you invest your money in?"

[] [] 8. A supplier or vendor asks, "Do you want this automatically
deducted from your bank account each month?"

[] [] 9. A loan officer says, "Tell me about your financial situation."

[] [] 10. A parent asks, "Did you ever pay off that debt you had?"

Most thin, fit people ENJOY telling those who ask about their exercise routine, the diet plan that helped them shed the pounds, and other health matters. Thin, fit people are actually MORE likely to see a physician or read health-related articles than those who are overweight or out of shape.

Those who have children who are excelling, or who have marriages that are loving, usually ENJOY talking about their family relationships.

And ... those who are financially fit usually ENJOY talking about money matters and sharing their insights into money management.

Take another look at the way you responded to the situations listed above. Overall, how do you rate your willingness to face and discuss your financial situations?

Circle one of the two responses below ... and then cross through the statement that does NOT reflect the way you feel:

Response #1: Overall, I am WILLING and EAGER to discuss financial matters openly and candidly.

Response #2: Overall, I am NOT WILLING and NOT EAGER to discuss financial matters openly and candidly.

Exercise #2

Scared or Smiling?

How do you FEEL—gut-level, first response—about each of the twelve money matters below, on a scale of 1 to 4 (1 being "scared" and 4 being "Smiling All the Way")?

(1) (2) (3) (4)

Scared A Little Under
Smiling All

Worried Control the Way

1. Paying this month's utility bills: _____

2. Making the current car payment: _____

3. Paying next month's mortgage: _____

4. Funding retirement: _____

5. Paying for the kids' college: _____

6. Paying back a loan: _____

7. Paying the minimum on this month's credit-card bills: _____

8. Paying off all this month's credit-card bills in full: _____

9. Ability to handle an emergency expense: _____

10. Prepared to pay for a child's wedding: _____

11. Having your children think well of you because of the inheritance you will leave to them when you die: _____

12. Taking a nice family vacation this year: _____

The truth of the matter is ...

If you feel SCARED or fearful about any of these money matters, you likely are NOT in control of your finances—they are running your life, and perhaps even ruining your life!

If you feel A LITTLE WORRIED, you also are NOT in control of your finances—you very likely just aren't admitting how scared or fearful you are that things could spin out of control at any moment. Those who are A LITTLE WORRIED are only "a little confident" that things are going in the right direction.

If you feel UNDER CONTROL, you may very well BE in control ... or you may be in a state of denial about your finances. I have encountered numerous people who say, "No problem," because that's the way they want their lives to be, when in truth, anybody looking objectively at their situation would shout out loud, "Man, you've got a PROBLEM!" Control is a term we sometimes use to talk ourselves into believing that things are going to turn out all right, and that a negative situation is manageable—a little like riding a bucking bronco is manageable if you manage to stay in the saddle.

SMILING ALL THE WAY ... should be interpreted as "smiling all the way TO THE BANK AND BACK"! If you checked "smiling" for most of these statements, it's likely you don't need a TOTAL Money Makeover. But ... you may need money makeover tips for those specific areas in which you answered anything other than SMILING ALL THE WAY.

Key Concept #2

If You Don't Know How Money Works ... What Future Is There in Working for Money?

When I was in my late twenties, my wife and I went broke. We lost everything because I didn't know how money works. We hit bottom hard and lost everything. It was then I began a serious quest to learn how money works. I came to realize:

1. It's up to me. My money problems, worries, and shortages largely began and ended in my mirror—nobody "made" me poor or a bad money manager. I had to take full responsibility for my own stupidity.

2. God's and Grandma's way of handling money works. Wealth building isn't rocket science. The principles are simple, time-proven, and effective. In a nutshell, "spend less and invest more" is a five-word financial strategy that every person over the age of five can comprehend!

3. Winning at money is 80 percent behavior and 20 percent head knowledge. It's not enough to know good financial principles—it's acting on those principles that's important.

What About You?

One of the first things any fitness adviser will tell a person is this: Stand in front of a mirror and take a long, hard look at yourself—preferably while you are wearing minimal clothing. Do you like what you see?

If not, are you willing to own up to the fact that YOU are the person who allowed yourself to get fat and flabby?

Are you willing to own up to the fact that the three basic principles of fitness aren't all that difficult to comprehend? Eat less, eat the right foods, and exercise more are concepts even a child can understand.

Are you willing to own up to the fact that it doesn't matter how much you KNOW about diet plans, good nutrition, or exercise UNLESS you are willing to put what you know into high gear? You won't get fit unless you actually EAT right, EAT less, and EXERCISE more.

These are givens in achieving physical fitness.

The same is true for financial fitness.

Exercise #3

Whose Fault Is it?

Check true or false for each of the statements below.


[] [] 1. My money problems aren't my fault.

[] [] 2. My money problems are only PARTLY my fault.

[] [] 3. My money problems are MY fault.

If you checked TRUE for statement number one or number two above, you need a reality check. The TRUTH is, your money problems are YOUR fault.

"But ...," you may say, "it ISN'T solely my fault." Let's explore that. Whom do you blame for your money problems?

Check any of the following that you believe apply ... and then tell why.

My Money Problems
MY PART in This Was ...

Are the Fault of ...

My spouse [] ______________________

My parents [] ______________________

My children [] ______________________

My "bad luck" [] ______________________

Interest rates [] ______________________

My employer [] ______________________

The government [] ______________________

My bank [] ______________________

My financial adviser [] ______________________

My personality type [] ______________________

A bad loan [] ______________________

My stockbroker [] ______________________

The stock market [] ______________________

Other: [] ______________________

Why did YOU allow that person to give you money problems? Your "bad loan" was a loan YOU took out or YOU issued to another person. Right? Your spouse's overspending occurred because YOU agreed to let overspending go unchecked. Right? For any items above that you checked, be honest in completing the following:

My Money Problems
MY PART in This Was ...

Are the Fault of ...

My spouse [] ______________________

My parents [] ______________________

My children [] ______________________

My "bad luck" [] ______________________

Interest rates [] ______________________

My employer [] ______________________

The government [] ______________________

My bank [] ______________________

My financial adviser [] ______________________

My personality type [] ______________________

A bad loan [] ______________________

My stockbroker [] ______________________

The stock market [] ______________________

Other: [] ______________________

Why am I being so tough with you on this point? Two reasons:

Reason #1: Until you take responsibility for your money situation, you aren't going to do anything to CHANGE because you don't think you CAN do anything. You'll wait for the "other party" to take responsibility, or you'll wait for your luck, stockbroker, or personality to change!

Reason #2: The way you ALLOWED another person or entity to impact your financial situation very often gives good clues about what you need to "undo" as you seek to become financially fit.

Think for a moment about physical fitness. If you are blaming too much ice cream and Mexican food for your excess weight ... there are clues in your laying blame! You have a weakness when it comes to ice cream and Mexican food. The solution for your problem? Well, in part it's this: Don't bring ice cream home from the supermarket, and don't go out to eat at Mexican restaurants!

At the same time, own up to the fact that YOU are the one who turns your car into the ice cream parlor's parking lot, and YOU are the one who is quick to say, "Let's eat Mexican tonight." You aren't fat because there's a great ice cream store less than a half mile from your home or a Mexican restaurant just around the corner. You'd find a way to overeat or eat the wrong foods, even if all ice cream and all Mexican food disappeared from the planet tomorrow!

Ditto for your money problems. If you are blaming another person or situation for your money problems, you are in denial. The problems are YOURS. Own up to your responsibility in creating money problems for yourself, and then you can do something to turn those problems into solutions.

Exercise #4

The Person in Your Mirror

Check all the statements below that you believe apply to your financial situation:

This Applies to Me

[] 1. I don't know enough about how money works.

[] 2. I struggle with my bills because of my own poor choices.

[] 3. I am the number one person responsible for turning around my financial situation.

[] 4. I know what to do with money ... I just don't do it.

[] 5. I haven't ever REALLY taken responsibility for learning how money works.

[] 6. I have been lazy when it comes to disciplining myself about money.

[] 7. I am willing to take FULL responsibility for my current money situation.

[] 8. I am willing to make the changes necessary to enjoy success with my money.

If you checked any of the above, you need a financial makeover—and you know it. Congratulations! You have taken the first REALITY-CHECK step toward improving your handling of money.

Key Concept #3

Take a Short, Painful Walk into a Lifetime of Success

This Total Money Makeover Workbook is based on one very simple motto:

If you will live like no one else NOW ... LATER you can live like no one else.

Living like no one else NOW means living a sacrificial, highly focused, purpose-driven life when it comes to your money.

Living like no one else LATER means living without the worry, frustration, stress, or fear that comes from constantly being on the brink of financial disaster. It means living LATER with feelings of confidence, hope, and joy related to money.

What About You?

Are you willing to change YOU? Honestly?

There are countless millions of people who look in the mirror and believe they SHOULD become more fit. Many of these people will say, "Yes, I NEED to change. I'd LIKE to change." But when it comes right down to changing, they DON'T change. Why? The foremost reason is because they don't like change—period. They don't want to alter any aspect of their lives. They see change as difficult to impossible or, at the very least, uncomfortable.

I agree. Change always has an element of sacrifice to it. It always has an element of self-denial. Any change that truly results in growth or improvement has an element of pain associated with it.

So let me ask again: Are you willing to change YOU?


Excerpted from The Total Money Makeover Workbook by Dave Ramsey. Copyright © 2003 Dave Ramsey. Excerpted by permission of Thomas Nelson.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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