The Total Money Makeover By Dave Ramsey

Even though Dad was visiting, I was still able to read the book The Total Money Makeover by Dave Ramsey. I've seen it listed on many frugal websites and decided it was something I should read. It was printed in 2003 when the economy (and stock market) was a lot better so I had to take some of it with a grain of salt. There was a lot I liked about this book. Much of it talks about digging yourself out of debt and then starting to save for an emergency plan. As previously mentioned, I am fortunate that I am not in debt. Well, not fortunate. We chose to live a lifestyle that didn't put us into debt. We also have about $6000 in savings. So we are on the start of a firm foothold. I disagree with the concept of saving 3- 6 months worth of bills. I think in theory it sounds great, but your average Joe-shmoe is not going to have $20,000 sat in the bank doing nothing. An emergency to me is one of the following: our car dies and we have to buy another one. Well, I can get a good used car for $4000. If I up the budget to $6000, I can get a damn fine used car. If my father in law was to have an emergency or anyone else in England, we would need to get there immediately. Again, we're talking around $4000 for plane tickets, spending money, etc. If my husband was to lose his job, we would need about $2400 a month to tick over. My husband would not go more than a month without a job. I am sure it is very hard to find a job in one's field, in one's hometown, making the money one is used to making. But if you are willing to travel, if you are willing to do anything else, there are always jobs. I'm sorry but it's true. My husband lost his job in February. He had a full time job the next day. That was forward thinking on our part. But since then he has been offered at least 3 jobs in his field that he has turned down. Why? Because they involved leaving home during the week and returning on weekends. Since he already has a job, we don't need to do that. But if he didn't have a job, we would do it without thinking twice. So having $6000 in the bank feels fine to us for an emergency fund.
The next thing he discusses is savings for retirement and for your child's college. Both are things Russ and I want to do. Russ will receive a small pension from the Royal Air Force for his time spent in the military. But that won't be enough. I do not agree with Dave Ramsey's concept of putting money into mutual funds and the stock market. We've all seen in the last 8 months how people's retirement funds have been totally obliterated. I have no confidence in a 401 (k). Russ and I were both making contributions which we stopped doing when the stock market started to tank. We have both seen our 401 (k)'s go downhill. Mine is now worth $200. I think Russ's is worth something similar. All that time and money wasted. I am going to have to do more research into safer investing. We may not become paper millionaires, but at least our money will be safe. I'm thinking of stuff like t-bills and savings bonds and cd's. This is something we plan to start doing soon, slowly. Once Alice is in school and I am working, the plan is to continue living on one salary, and the other salary will be split 75% to our retirement and 25% to Alice's schooling. Mary's dad is paying for her schooling and has already been saving for years. I have also asked the grandparents to stop buying lots of little things (the amount of gifts the kids get on a regular basis is crazy) and start contributing to a college fund instead. When Alice is ready for school, if need be, my entire salary will go towards her education. If need be, we'll sell our house to fund her education. The one thing we will not do is allow her to take out student loans. She will need to spend 2 years in community college to do her core work, then can transfer to a specialized school for the rest. If she fails one class, she's done and she will need to get a job. She will grow up knowing this. I have very harsh thoughts for parents who allow their children to take on that kind of substantial debt at such a young age. I was lucky to not get saddled with that kind of debt and I won't allow my children to be either.
All in all I think Dave Ramsey has a lot of good information. I could do without all the God stuff written throughout (sorry but God isn't "looking out" for your finances- He's too busy dealing with war and famine and stuff), but there are two things that really stuck out to me. The first was a quote by Albert Einstein that says "Great spirits have always found violent opposition from mediocre minds" in reference to people being frugal who get grief from their "unfrugal" friends and family members. I truly believe this to be true. The other was something along the lines of why do we "want to buy stuff we don't want with money we don't have to impress people we don't like." That really hit the nail on the head for me! Also, don't try to keep up with the Jones'- the Jones' are broke!