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It’s Been 7 Years Since I First Read Total Money Makeover…Where We Are Now

We started through the Total Money Makeover steps 7 years ago. I'm going to share the baby steps, plus our Total Money Makeover success story.

It was 12 years ago when I first moved to Houston to be with my now-husband, Paul. One of the things we quickly discovered we loved doing together was going to Half Price bookstores and browsing the shelves for hours. He'd get lost in history and DVDs, I'd browse the financials and cookbooks. We'd meet up in biographies.

couple slapping each other five while painting a wall, text overlay "our total money makeover success story 12 years after paying off $59,496"

I had not even started my blog at that point but had been financially minded and passionate my whole life.

Then one day I spotted Dave Ramsey's Total Money Makeover. Paul saw me pull it off the shelf, and quickly endorsed it, saying his older brother was all about Dave Ramsey. Since it was half the normal price, and I love to read about anything to do with money, I took it home.

I gotta say, I devoured it that weekend.

The stories of people not only paying off massive amounts of debt but also saving up huge sums of money for their future stretched me beyond the realm of what I thought possible for an average person.

And hey, I had debt at that time as well. I was 25, with approximately $17,000 left from $36,000 in student loan debt. So the book really spoke to me.

Even though I had confidence in my ability to be frugal for the rest of my life, I honestly didn't think I'd ever make it to some of the higher-end steps of the Total Money Makeover.

So now, 7 years later (and now 12 years later) – on the other side of a wedding, a honeymoon, combining finances, combining debt, buying a home, and selling a home – where exactly are we on Ramsey's 7-step plan?

Where We Started 12 Years Ago

To give you the quick and dirty rundown: in 2009 Paul and I got engaged and combined our finances.

This included combining our debts.

Together, we had $25,000 remaining:

  • $10,000 in student loans at 1.25% interest
  • $12,000 in car loans at 6.325% interest
  • $3,000 for an engagement ring at 0% interest for 12 months

We decided to have this paid off by the time we got married (April 2010), as well as pay cash for all the other things going on at the time, like the wedding, honeymoon, and putting a down payment on a home.

Total Money Makeover Steps + Our Progress in 7 and 12 Years

Below, I'm going to outline each of the Total Money Makeover steps (called Baby Steps), plus what progress we've made on them both 7 years later, and then 12 years into the Total Money Makeover.

Baby Step #1: Save $1000 Fast (Check!)

We had this one accomplished very early through some strategery.

We set out to eradicate the last of our $25,000 in combined debts before walking down the aisle.

Since buying a home together was on our to-do list, we took advantage of the free-and-clear $8,000 first-time homebuyer’s tax credit offered at the time.

We put $7,000 of this money onto the car loan debt while taking the other $1,000 to help replenish our savings account after plunking it down on our new home purchase.

This turned out to be very important, as my car died one month after we purchased our first house. In fact, I no longer recommend you save up just $1,000 before going gazelle intense on your debt payments (read about that in my article on what is the best strategy for paying off debt).

Pssst: If you're needing to boost your income in order to get your $1,000 saved fast, then check out these 32 Legitimate Ways to Make Money at Home.

Baby Step #2: Pay Off All Non-Mortgage Debt (Check!)

Paul and I actually used a hybrid approach of both Dave Ramsey’s Debt Snowball and Suze Orman’s debt repayment plans (pay the highest interest rate debts first) to pay off this debt.

So we got gazelle intense on our highest-interest loan first (the vehicle) and worked our way down from there using the debt snowball. We were officially debt-free on September 1, 2010. Woohoo!

To celebrate (and, well, actually because the volcano in Iceland erupted two days before our wedding so our paid-for, 11-day honeymoon to Austria had to be postponed), we went on our honeymoon in November.

It was magical!

Not only was it already paid for by the money we had saved plus some wedding gifts, but we also had no debt except our mortgage.

12 years later: we have no mortgage (because we sold our home and are renting), and still have no additional debts. Zero debt at all.


Psst: wondering how Dave Ramsey and Suze Orman's plan to pay off debt differ? Check out Suze Orman vs Dave Ramsey.

Baby Step #3: Finish the Emergency Fund (Check!)

From September 1, 2010 onwards, we've been stashing cash in savings. We have over a year of expenses saved up in our emergency savings account now.

Baby Step #4: Maximize Retirement Investing (Check!)

The thing is, retirement savings are so important to me that we continued to max out our two Roth IRAs (annual contribution is currently $5,500 each, or $11,000 total) throughout all of the previous steps – while we were saving the $1,000, paying off debt, and finishing the emergency fund.

I just refused to compromise our future for the other steps. What Ramsey really wants is for you to invest 15% of before-tax (gross) income (without including your company's match) annually toward retirement. We are currently saving/investing more than 15% of our gross income towards retirement.

Baby Step #5: Fund College (Nope)

7 years later, this was my update:

“We don't have children. Not yet anyway. So this step was not something that I chose to take. I'm a planner, but saving money towards a potential college education of a potential child was just too much for me! Paul is currently attending college full-time, and fortunately for us he earned full tuition + textbook cost reimbursement + a housing allowance through his post-9/11 GI Bill.”

But 12 years later? We have a 5-year-old!

Still, we haven't touched this one…so we should get to it.

Baby Step #6: Pay Off the Home Mortgage (Check!)

When I first wrote this article, 7 years after reading the Total Money Makeover, we were between this step and Step 7.

In fact, here's the original update:

“We've got more than one year savings in an emergency fund, and a mortgage that is not crazy with the zeroes. Honestly, paying off our mortgage is probably attainable in the next few years.

We've refinanced it to a 15-year mortgage instead of the original 30-year mortgage we had taken out. Refinancing our mortgage means we're on track to pay it off at over $100,000 in interest savings to us!

But there are lots of “what-ifs” with this one.

Like, what if we want to move? While we've loved living in this home for the last five years and don't have plans to move at the moment, we're not sure that it's our forever home.

Another factor in this is that we don't get to take a tax deduction on the interest paid. The loan amount is low enough (we live in Houston, TX) that we pay too little interest, so we have to claim the standard deduction. So we're not getting that economic benefit anymore.

Finally, we would essentially empty out our savings and then some to take this step. So we'd start from scratch on building up the emergency fund, leaving us financially vulnerable for a period of time. See why this step definitely is going to take some more thinking and planning on our part.”

But now, 12 years later?

Well, we moved 2 years ago for my husband's job and sold our home. That means we paid off the mortgage and put the equity money into our savings account. We haven't purchased a home since, so we're officially 100% debt-off (though, we are paying rent! Thankfully, in a pretty low-price part of the country).

Baby Step #6: Build Wealth Like Crazy (Working On It)

Since we're not sure if we want to pay off the mortgage or not (nor are we in a position to…yet), we're kind of in this stage. We're saving money, and have an investment account outside of our retirement/savings.

7 years after reading that book, when I originally did an update, I wrote this,

“our savings grow a lot more slowly than they used to, since I'm now working for myself and Paul can be considered underemployed after a 5-month stint of unemployment, but we're still headed in the right direction and that's what counts.”

Now, 12 years later, having sold our home and renting in a pretty reasonably priced location? I can say that we're saving money like crazy.

In fact, we're hopeful that our next home purchase (when ever that may be, but probably five years from now) will be in cash.

Do Dave Ramsey's Baby Steps Work?

I think I've shown above that yes if you work the baby steps, the baby steps will work.

But I would like to leave a word of caution on that $1,000 Emergency Fund (here's my article on emergency fund example amounts).

Before starting on a “gazelle intensity” towards debt repayment, Dave Ramsey advises you to save up $1,000 for an emergency fund so that when Murphy comes knocking on your door while you are trying to get out of debt, you will not have to go into more debt by charging the emergency to your credit card. And since getting gazelle intense – meaning taking all of your other savings to pay off debt, most of your income, extra job income, and basically “all money you have above and beyond the $1,000 in anything except retirement plans…” – leaves you financially vulnerable, then saving up an emergency fund is a good idea.

What happens if you need to dip into this $1,000 emergency savings?

After paying for the emergency in cash, you temporarily suspend putting all money possible towards your debts and build your emergency savings back up to $1,000. Then, you get gazelle intense again.

I love Dave Ramsey and his debt snowball philosophy for paying off debt. I think it makes good sense, and enjoy reading all of the stories from people like you and me who decide to focus on getting out of debt and find themselves out of a $50,000 hole 13 months later. Truly inspiring.

While Paul and I were working on a few of our own debts we sold extra televisions, books, game systems, my old laptop, etc. I picked up extra income with some freelance writing and trimmed our fixed bills down quite a bit in order to free up some more cash.

However, it occurred to me that if Paul and I had started our debt-free journey with only $1,000 in emergency savings, right now we might be more in debt. If you remember, my car died after purchasing our first home together. Fortunately, we had more than $1,000 in our emergency savings and were able to find a replacement within two months by paying cash for a used car. Paul carpooled to work for about as long as he could, and we had moved further away from our jobs at that point so taking a bus or metro was much trickier (we did eventually become a one-car family for 2.5 years). Granted, if both of us could have changed our work schedules permanently, then we could have figured out a way to carpool together until getting out of debt.

Perhaps that is what Dave Ramsey means by gazelle intensity and focus. If I am going to do a complete, fair review of the debt snowball, then I need to add in the extra things that Paul and I could be doing in order to be more intense in our efforts.

We could've been more intense about our debts, but our Number Two goal was to get married, and to do so without going into any debt whatsoever. So we were concurrently paying cash for our wedding to save us from going into more debt and shedding these older debts.

We could've eloped and put all of the wedding savings towards our debts (we thought about doing this, but in the end, we both wanted our wedding day).

Perhaps I could've figured out a way to carpool with someone else (I did eventually carpool with a coworker who tore his Achilles tendon, and who couldn't drive for a few months, so we split the gas costs).

We could've postponed our purchase of a home and used our down payment money to pay off our debts, though the first-time homebuyer’s credit was certainly a part of our debt-free plan (it was an $8,000 check we did not have to pay back), and we were planning on buying a home anyway at the time that we did. And we are definitely keeping more than $1,000 in our emergency savings account – without which I would feel too vulnerable – so technically, we could throw that money onto our debts as well.

We could've also temporarily stopped contributing towards our retirement plans and used that money to pay off the debts. However, I'm a very long-term thinker and planner (have you noticed?), and so I wasn't comfortable with this idea, especially since we saw the end in sight.

All in all, Paul and I are satisfied with shedding most of our non-mortgage debts by April, having no wedding debts, and no honeymoon debts. And while we don’t completely agree with Dave Ramsey’s $1,000 emergency fund while paying down debts, he has certainly been a part of our journey towards this point.

Ramsey's whole thing behind doing all these steps is “if you live like no one else, later you can live like no one else.” Fortunately for us, my ability to add frugal decadence into our lives and to manage our money really well has meant that we are definitely living our lives like no one else.

Granted, we also made lots of sacrifices in the beginning (fulfilling the first part of his quote). But they were never sacrifices we weren't willing to make for the greater good of our future finances…and BOY has it paid off.

For example, I never would have been able to quit my day job over two years ago to pursue my writing and business full-time without those early sacrifices! What a change in the quality of life we've been able to buy ourselves by smart money management and a bit of sacrifice.

Now it's your turn. Where are you in Dave Ramsey's baby steps?

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.


Friday 18th of February 2022

Wonderful article Amanda! I started the baby steps right after I graduated college, with about $55,000 of student loans to my name :( It really didn't click for me until after I got my first job, and realized that there's no way I could live the way I was while also burdened with this much debt! I've never been a spender, but when nearly half your paycheck is going to debt, it really wakes you up! That was 3 years ago, since then I built my baby emergency fund, paid off all my debt, cash flowed a wedding and honeymoon, and we are 1 month away from a fully funded emergency fund! My husband and I couldn't be happier. I am so grateful for these baby steps as it has allowed us to live the life we want. We have our first baby due in July and I will stop working to be a s@hm. That was always the dream, if it wasn't for Ramsey it would have stayed just a dream. In a month or so we will open up a Roth IRA to max out, my husband has always been contributing to retirement, but not the full 15%.We will also open up an ESA for baby, then start thinking about houses- right now we rent a small house from my brother-in-law and it's worked out nicely. It's so nice to read other people's stories!

Amanda L Grossman

Saturday 19th of February 2022

YESSSS!!! This is amazing news and progress, Molly. I know we just met, but I'm so proud of you guys. And yes, it's really fun to read other people's stories:).

Bill in Houston

Monday 18th of May 2015

I just bought Total Money Makeover last night (Kindle Edition). I read the first three chapters before my Kindle Fire drooped forward and hit me on the nose. We already have one and two taken care of, and are working on three (because we both plan to take time off after Biscuit is born). Slowly working on the rest (just went from 7% to 8% on my 401k, company match is 6%), as time comes along. We started a college fund for Bun, and will do one for Biscuit, then pay off mortgage and start to save more.

We need to budget. I need to do more to keep better track of spending. I also need to download your paycheck expander, but I've been too much of a chicken-squat to commit. Oh what the hey, I'll do it.

Paul Davis

Friday 24th of April 2015

So inspirational! We have not had the income to progress significantly on the 7 baby steps, but we are working on it and hope to make a significant dent by the end of the year. Thanks!


Saturday 25th of April 2015

You are welcome, Paul! Good luck to you both:).


Friday 24th of April 2015

My life was changed by reading Total Money Makeover nine years ago. Loved reading your update.

Amanda L Grossman

Friday 24th of April 2015

I'm so glad you picked up the book, Susanne! My pleasure to give the update:).


Thursday 23rd of April 2015

Baby Step 2! I want the title to my car in hand in 2016. I'm trying to figure out the eating out part, the having good food ready at home part. I have a picky 12 year old, and I like weird food, so that's our corner to turn. I'm figuring it out and humbling myself every day. I've made huge strides the last 6 months and your 2015 Financial Detox was a great part of it. Now it is Gazelle-Time for at least a year.

Amanda L Grossman

Friday 24th of April 2015

Keep up the great work, Joy! It never felt like we'd get to where we are, so I think you'll get there before you know it. I am so thrilled that my Financial Detox Challenge earlier this year helped you out!