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I have followed Dave Ramsey for many years and have over 70 articles on this blog covering Dave Ramsey, so I thought it would be helpful to explain potentially the best book to read first.
His books have become some of the most popular resources for people who want to learn about money management, budgeting, and investing. However, with so many titles to choose from, it can be challenging to know which Dave Ramsey book to read first. In this article, we will explore some of the best Dave Ramsey books and help you determine which one is the best for you.
Best Dave Ramsey Book to Read First
1. The Total Money Makeover
The Total Money Makeover is one of Dave Ramsey’s most popular and influential books. It provides a step-by-step plan for getting out of debt with the Baby Steps, building an emergency fund, and creating a budget. The book is written in straightforward and easy-to-understand language, making it an excellent choice for people who are new to personal finance. If you’re struggling with debt or want to start building wealth, The Total Money Makeover is an excellent place to start.
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Why Might You Start with this Dave Ramsey Book?
Because in most of Dave Ramsey’s commentary, you will continually hear about the Baby Steps. The Total Money Makeover is divided into seven “Baby Steps” that provide a framework for achieving financial freedom. The steps are as follows:
- Save $1,000 for a starter emergency fund.
- Pay off all debt using the debt snowball method.
- Save 3-6 months of expenses in a fully-funded emergency fund.
- Invest 15% of household income into retirement accounts.
- Save for children’s college fund.
- Pay off home early.
- Build wealth and give generously.
The book provides a comprehensive plan for achieving each of these steps and includes practical advice, real-life examples, and worksheets to help readers apply the principles to their own lives.
Step 1: Save $1,000 for a Starter Emergency Fund
The first step in The Total Money Makeover is to save $1,000 for a starter emergency fund. This fund is designed to cover unexpected expenses, such as car repairs or medical bills, without resorting to credit cards or loans. Ramsey recommends cutting back on unnecessary expenses and selling items to raise the funds for this emergency fund.
Step 2: Pay off All Debt Using the Debt Snowball Method
The second step is to pay off all debt using the debt snowball method. This involves listing all debts from smallest to largest and paying them off in that order, regardless of interest rates. Ramsey argues that paying off the smallest debt first provides a psychological boost and momentum to continue paying off the rest of the debts. The book provides tips for negotiating with creditors, reducing expenses, and increasing income to accelerate the debt payoff process.
Step 3: Save 3-6 Months of Expenses in a Fully-Funded Emergency Fund
The third step is to save 3-6 months of expenses in a fully-funded emergency fund. This fund is designed to cover larger unexpected expenses, such as job loss or major home repairs. Ramsey recommends putting the emergency fund in a separate bank account and treating it as an essential expense. The book provides advice on how to calculate the amount of the emergency fund and how to build it over time.
Step 4: Invest 15% of Household Income into Retirement Accounts
The fourth step is to invest 15% of household income into retirement accounts, such as 401(k)s or IRAs. Ramsey recommends investing in mutual funds with a long-term growth strategy and avoiding individual stocks or risky investments. The book provides tips for choosing the right retirement accounts and calculating the appropriate amount to invest.
Step 5: Save for Children’s College Fund
The fifth step is to save for children’s college fund. Ramsey recommends using tax-advantaged college savings plans, such as 529 plans, and starting to save as early as possible. The book provides tips for choosing the right college savings plan and how to calculate the amount to save.
Step 6: Pay off Home Early
The sixth step is to pay off the home early. Ramsey recommends using the same debt snowball method to pay off the mortgage as quickly as possible. The book provides tips for accelerating the mortgage payoff and calculating the savings from paying off the mortgage early.
Step 7: Build Wealth and Give Generously
The final step is to build wealth and give generously. Ramsey recommends continuing to invest and build wealth while als
2. Financial Peace University
Financial Peace University is another popular book by Dave Ramsey that focuses on helping readers take control of their money. The book provides practical advice on budgeting, saving, and investing, and is designed to help readers achieve financial freedom. It is an excellent choice for people who want to learn about the basics of personal finance and take the first steps towards financial independence.
3. The Legacy Journey
The Legacy Journey is a follow-up to The Total Money Makeover and focuses on building wealth and leaving a financial legacy. The book provides advice on investing, building wealth, and passing on financial principles to future generations. The Legacy Journey is an excellent choice for people who have already achieved financial stability and want to learn how to grow their wealth over time.
4. Dave Ramsey’s Complete Guide to Money
Dave Ramsey’s Complete Guide to Money is a comprehensive guide to personal finance that covers everything from budgeting and debt reduction to retirement planning and investing. The book provides practical advice and real-life examples to help readers navigate their financial journey. It is an excellent choice for people who want a thorough and detailed guide to personal finance.
Conclusion
Choosing the best Dave Ramsey book to read first ultimately depends on your financial goals and current situation. If you’re struggling with debt and want to take control of your finances, The Total Money Makeover is an excellent choice. If you’re looking for an all-encompassing guide to personal finance, Dave Ramsey’s Complete Guide to Money is a great place to start. And if you’re already on a stable financial footing and want to build long-term wealth, The Legacy Journey is the book for you. Regardless of which book you choose, Dave Ramsey’s practical advice and easy-to-understand language will help you take control of your finances and achieve your financial goals.
