Not all financial advice resonates with me, but it does resonate with me for the most part.
- Ramit Sethi is a popular source of personal finance advice.
- His advice on finding your money dial, making more money, and focusing on big financial decisions has all helped me.
Among the many personal financial advisors, my favorite is Ramit Sethi.he is the author I will teach you to get rich, and I noticed right from the start that he talks about money differently than most. He’s not ashamed of spending money for his audience, in fact, he encourages people to use it to build their wealthy lives.
I was impressed by some of Sethi’s suggestions. These three tips have helped shape my own approach to personal finance, and they are responsible for many of the things I do right.
1. Find your money plate
Money dials is Sethi’s term for the different areas in which we spend our money. He says 10 tend to be the most popular:
- Health and Fitness
- Social status
Everyone’s priorities are different. By finding your money plate, you can adjust your spending habits to match them. The idea is to cut spending in unimportant areas and free up more money for important ones.
For example, I’ve turned up my travel money dial. It’s something I love to do, and I find I enjoy it even more when I’m not on a tight budget. Even though I use a travel credit card to help keep costs down, a large portion of my disposable income goes to travel.
I’m able to invest more in travel because I don’t spend as much on other monetary things like health and fitness. It’s still important to me, it’s just that I don’t feel like spending a lot of money right now. I’m fine without a nutritionist, personal trainer, or membership in a high-end gym.
2. Forget frugality and focus on earning more
Sethi is committed to maximizing your earning potential, not cutting your expenses. He often points out that there is a limit to how much you can cut, but not how much you can earn. Many of his products teach students how to increase their income by finding better jobs or starting a business.
In my experience, I get better results in terms of money when I focus on increasing my income. I’ve been broke before, and honestly, the typical advice about saving more doesn’t do me any favors.I have already Cut unnecessary expenses. I can’t save $300 a month by eating out less because I didn’t eat out in the first place.
Cutting costs is fine if you think you’re spending too much somewhere, but it can only get you so far. For most people, reducing expenses by $5,000 or $10,000 a year is difficult. Even if you do, you can’t keep cutting year after year.
It may be more realistic to increase your annual income by $5,000 or $10,000. It also doesn’t require you to compromise your quality of life, which is often the problem when you’re completely focused on cutting expenses. And if you make it a priority to increase your income, then you can continue to do so.
3. Do the big thing, stop asking $3 questions
Too often people spend too much time and energy on small, trivial financial choices. Sethi advises you to forget about these and focus on the flow of money that really matters, like investing monthly and avoiding excessive living expenses.
This question comes up several times on Sethi’s podcast. Couples bump up their budgets for an expensive house or car, then wonder if they should save money by forgoing a $15 streaming service.
It makes more sense to prioritize decisions that have high impact. When you do this right, you don’t need to worry about these little things. Here are some examples of big things to focus on:
- Invest your money automatically
- Negotiate a higher salary
- Lower your housing costs
- Increase your savings rate
All these actions are worth it thousands of dollars Per year. You’re not going to fix that by canceling the occasional trip to Starbucks or canceling Hulu.
The great thing about these tips is that in addition to helping you financially, they can also improve your quality of life. I have definitely seen positive results by using them in my own life and I would recommend them to anyone interested in getting better at money.
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