The Dave Ramsey Checklist for Financial Health

This article is an excerpt from the Shortform book guide to "The Total Money Makeover" by Dave Ramsey. Shortform has the world's best summaries and analyses of books you should be reading.

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What is the Dave Ramsey checklist? How can the Dave Ramsey checklist help you with your financial journey?

The Dave Ramsey checklist is a tool to help you with the keys to getting control of your finances and managing wealth. Your financial situation is a result of your behavior, according to radio talk show host and author Dave Ramsey.

Read on for the Dave Ramsey checklist for paying debts and achieving and maintaining wealth.

The Dave Ramsey Checklist: Debt-Free and Investing

1) Focus intensely on becoming debt-free: If you’re half-hearted, the debt snowball won’t work. Tell yourself, “I’m getting out of debt, no matter what.” Fully focusing your mind on a goal is as powerful as focusing the sun’s rays with a magnifying glass and setting a piece of paper on fire. Develop gazelle-like intensity: a gazelle keeps an intense eye on its surroundings to avoid being taken down by a cheetah. Similarly, your focused attention (or gazelle intensity) on your finances will save you from debt

2) Stop using credit: While you’re working through your debt list, remember that your goal is to eliminate all debt otherwise you won’t have satisfied this part of the Dave Ramsey checklist—don’t replace any paid off debts with new debt. Make a pledge that you’ll never borrow money again. Before long, you’ll face a test of your gazelle intensity level—you’ll need a major car repair or get the urge to make a big purchase using credit. To eliminate temptation, cut up your credit cards. You can’t get out of your debt hole by digging it deeper.

3) The next step in the Dave Ramsey checklist is building your wealth by investing for retirement—it’s the key to being financially fit for life. It requires gazelle intensity to get started, but once your nest egg is established, you can maintain your financial fitness with less effort, like a marathon runner who’s built up her strength through long practice and can run with less effort.

Live Differently From Everyone Else

If you follow the Total Money Makeover, you’ll become wealthy within a few decades. While it’s an enormous relief to be out of debt and financially secure, be aware that having wealth can get you into trouble in several ways.

1) You may become overly entranced with it. Money and the stuff it buys won’t bring you happiness. A person obsessed with money is just as enslaved as a person deeply in debt. Controlling your mindset is essential in this part of the Dave Ramsey checklist.

2) Wealth will reveal and magnify your true character. If you’re a jerk, money will make you an even bigger jerk. If you’re kind and generous, you’ll be even more so with your wealth. If you feel guilty about having money, your guilt will grow.

It takes spiritual maturity and character to understand that while wealth is fun, it brings responsibility—whether it ruins your life or helps you do good is up to you.

While money isn’t the answer to the meaning of life, it isn’t evil either, as many religious people erroneously believe. This belief is used to justify living a financially unhealthy or mediocre life.

It’s wrong to love and trust money to provide things it can’t provide: happiness, satisfying relationships, and spiritual or emotional well-being. But it’s also wrong to reject money and the good it can do. Further, this thinking would leave all the world’s wealth to evil people.

As a good person, it’s your duty to build wealth and do good with it in order to keep it from bad people—for instance, drug dealers and pornographers—who would otherwise use it for evil purposes. Keeping your money doing good is the final step of the Dave Ramsey checklist.

The Dave Ramsey Checklist for Financial Health

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Here's what you'll find in our full The Total Money Makeover summary :

  • The 7 steps to achieving financial stability (you'll love #7)
  • A fool-proof plan for becoming debt-free
  • How myths about debt and money are crippling your financial health

Rina Shah

An avid reader for as long as she can remember, Rina’s love for books began with The Boxcar Children. Her penchant for always having a book nearby has never faded, though her reading tastes have since evolved. Rina reads around 100 books every year, with a fairly even split between fiction and non-fiction. Her favorite genres are memoirs, public health, and locked room mysteries. As an attorney, Rina can’t help analyzing and deconstructing arguments in any book she reads.

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