At the beginning, Greg explains how bad his summer was with his brother Rodrick, who knows a secret that Greg is trying to keep. When Greg returns to school, he finds out he still has the Cheese Touch, but he gets away with it by passing it on to a new kid.
Later, it is clear that Greg and Rodrick are always broke, so their mother starts the Mom Bucks program. Then, Rodrick throws a huge party and trashes the house, forcing Greg to clean it up with him.
Half of a month later, Greg steals some play money (which turn out to be Mom Bucks) from Rowley and takes them home to put under his mattress. When Greg fails to do his homework, he must borrow an assignment from Rodrick and pay him $20,000 in Mom Bucks. Unfortunately, their mother found out about the stolen Mom Bucks when Rodrick tries to cash in the lot and she confiscates all of it.
In December, Rodrick's party is uncovered and he is grounded for a month. Greg is also grounded from video games for being Rodrick's "accomplice" even though he had been locked in the basement the whole time and had nothing to do with the party.
Rodrick then starts preparing for the talent show, despite his punishment (he wasn't allowed to leave the house). Frank then ends his punishment two weeks early because he hated listening to his band, Löded Diper, play every day. After Greg hurts Rowley by putting a dumbbell in a pillow that Rowley kicks, Greg must perform in the talent show with a first-grader who Rowley was partners with. They don't make it in, but Rodrick's band does. During the talent show, Rodrick has his band's performance taped so he can send it to the record companies, but afterwards the video is rendered useless after it is found that their mother (who was taping the video) had talked the whole time and everything she said was heard on the tape.
Greg and Rodrick fight and then Greg's secret is spilled to the entire school. However, Greg ends up getting popular for what he did because the story gets extremely twisted from going to the girl's bathroom in the Leisure Towers, to invading the girl's locker room in Crossland High School. Greg helps Rodrick with his science project at the end, just because he is his brother.
