Recommended Reading

The Total Money Makeover

by Dave Ramsey

I read this book last year and find it to be a very good guide for getting control of your finances.  I have incorporated a number of his strategies into my financial goals and have discussed them on this website previously.  Dave discusses the importance of setting up an emergency fund, the debt snowball, having a minimum of three months expenses in savings, education savings for your children, paying off your home early, and building wealth.

Whilst reading the book I immediately put plans into action to set up an emergency account.  I am happy to say that I have $1000 in emergency funds available.  I personally decided to put my emergency funds into my mortgage as it reduces my the amount of interest I pay on my loan.  I still have easy, but not too easy, access to the funds in an emergency.  I decided by having that bit of distance between my money and the emergency it gives me time to truly decide if it is an emergency.

The debt snowball is a great idea for anyone wanting to pay down large amounts of debt.  This has limited value for me as I only have a mortgage and so am already focused on getting that paid down as quickly as possible.  However, for people with credit card, personal, loans from friends etc it is a very handy tool to paying off debt as quickly as possible.

I am currently saving into my mortgage my three months of living expenses.  This takes time as I still have to live whilst putting money away for this.  I am slowly building my balance up and am happy to say I have about $2000 in expenses money saved.  I will receive my tax refund shortly and will put this in and this will almost double the amount saved.  It takes time and patience to save three months of living expenses, especially on a low income but it can be done.

So I recommend The Total Money Makeover to anyone wanting to take serious control of their finances, get themselves out of debt entirely, and to start building wealth to live on in their future.