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Total Money Makeover is a book authored by Dave Ramsey.

It’s about a proven  plan for Financial Fitness.

Here are a few hard and practical lessons I learned from this book:

1. Start saving up your emergency fund while paying your debts.

It sounds easier said than done esp. if you’re earning just enough to keep up with your expenses.  So what could be worse if you’re earning less?

How do you do this exactly?

It has been said here that Personal Finance is 80% behavior and 20% knowledge. So, if that’s the case, start with a positive attitude and intense willpower to do both.

Start saving up no matter how small and start paying your small debts first.  That’s right, get rid of the small debts until you’re face-to-face with your biggest debt. That way, your focus would turn to paying it off according to your capacity.

The initial Emergency Fund should equal at least 6 months of your salary. But the ideal Emergency Fund should at least be equivalent to 1 year of your salary. Emergency Funds should be treated or used for emergencies such as sudden sickness, car breakdown, accidents, etc.

Tuition fees, a wedding, birthday celebrations, are events that you should prepare for and therefore, you don’t have any excuse to draw monney from the Emergency Fund.

As of this writing, I am personally cleaning up some debts that have piled up due to the use of credit cards. I used to be debt-free but I consider this phase in my life when I have regressed and stopped following God. Praise be to God that He gave me the grace to come back to Him and now I’m in the process of cleaning up my credit card debts.

In hindsight, I realized credit card debts are usually caused by ignorance on its proper use, irresponsible behavior like spending beyond your means, and simply pure greed.

I look forward to the day when I am debt-free (God willing, this year) and when I can cut up all my credit cards and never again to rely on them.

2. Start saving up for your Retirement Funds.

Dave Ramsey is a firm believer of Mutual Funds. There are many funds to choose from but he advocates a growth fund like funds laden with equities. When you invest, you must be aware of your investments but not to the point of checking it every now and then. Instead, just set aside at least 15% of your income every month. That’s it. Do it on a regular basis. And over time, your disciplined approach to building up your wealth will pay off and you will be reap the rewards for being prudent financially.

3.  There are only 3 uses of Money: FUN, INVESTING and GIVING.

What’s the point of working so hard without play? It sure is FUN if you have the means, right? Buy the things you want; travel if you want to visit places that you’ve never been to before; there are many ways to have some fun if you have the money.

Investing early is WINNING in life later.

Giving is the essence of becoming rich.  Be a Blessing to others rather than be the one to be blessed. Nothing wrong to be blessed but if we use our money the biblical way – by working hard; by spending within our means; by not accumulating any debt; by saving and investing for the future; then we can use our money to glorify God by helping others.

God loves a cheerful giver and He blesses the generous person more.

Therefore, the essence of the Total Money Makeover is by having a spiritual character to handle your Personal Finance the right way.

As Dave Ramsey so eloquently puts it:  If you will live like no one else, later you will live like no one else.

So if you’re deep in debt, have the gazelle-like intensity to pay off your debt until you’re debt-free.

There are many ways to pay off your debt. Here are a few suggestions:

1. Put up a garage sale or sell your items online.

2. Get a second or third job or a part-time job. Or earn commissions by referring to an agent or broker.

3. Budget wisely and tightly.

4. Change your lifestyle. Spend within your means.

5. Set a goal when you want to be debt-free. That means, you have to have a disciplined schedule of paying off your debt gradually.

Remember, whatever you reap in the beginning, you will sow in the end.

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