12 Things I Learned From Total Money Makeover by Dave Ramsey

Shocking Facts About Money in America

Photo by Ibrahim Rifath on Unsplash

I recently finished reading Total Money Makeover by Dave Ramsey. It was a pretty informative read full of practical and applicable information. The ideas in the book were pretty simple. That said, even though doing the right thing is simple, that doesn’t mean it’s easy.

The main example of this that Ramsey emphasizes revolves around staying out of debt. The idea of staying out of debt is simple. However, actually staying out of debt while living in our consumerist American culture isn’t easy.

From reading this book, I learned 12 surprising facts about money and American culture:

1. 70% of Americans live paycheck-to-paycheck
2. 88% of graduating college seniors have credit card debt before they even have a job
3. 75% of people on the Forbes 400 said that the best way to build wealth is to become and stay debt-free
4. 70% of Americans die without a will
5. the average American family will make over $2,000,000 in their working lifetime without ever getting a raise
6. 90% of airline miles rewarded are never redeemed
7. 60% of Americans don’t pay off their credit cards every month
8. 49% of Americans could cover less than one month’s expenses if they lost their income
9. more than 70% of Americans don’t believe they’ll be able to retire with dignity
10. 39% of Americans with kids don’t save a dime toward college
11. 97.3% of people don’t systematically pay extra on their mortgage
12. 19% of people who filed for bankruptcy in 2002 were college students

Some of these facts are sad, while others are encouraging. I was shocked to hear that the average American family makes over 2 million dollars in their working lifetime without getting a raise. The sad other side of this fact is that these families still end up in debt. Even when families earn millions of dollars, they tend to end up in debt. I think that this goes to show just how powerful our consumerist economy is.

I found the fact that more than 70% of Americans don’t believe they’ll be able to retire with dignity to be particularly sad. The upside of these somewhat depressing facts is that, if we change our financial habits, we can achieve more positive outcomes.

For me, the biggest takeaway from this book was to avoid debt at all costs.

“We buy things we don’t need with money we don’t have in order to impress people we don’t like.” -Dave Ramsey

The quote above reminded me of the movie Fight Club. It feels so relevant to our society. Keeping up with the Joneses seems to be such an empty and shallow road. We are constantly encouraged to buy things we don’t need to appear a certain way. It’s so hard to say no to things we start to believe that we need.

“If you will live like no one else, later you can live like no one else.”-Dave Ramsey

The quote above expresses the main theme of the book. If you make sacrifices now and live a frugal life, you’ll eventually be able to live a life of financial freedom. If you aren’t able to cut back and stay out of debt and spend money on things you don’t need, it’s less likely that you’ll become financially free.