Not all financial advice resonates with me, but these tips did, in a big way.
- Ramit Sethi is a popular source of personal finance advice.
- His advice on finding your money dials, earning more, and focusing on big financial decisions have all been helpful to me.
Of the many personal finance advisors out there, my favorite by far is Ramit Sethi. He’s the author of I Will Teach You To Be Rich, and what I noticed from the beginning is that he talks about money differently than most. He doesn’t shame his audience for spending money, and in fact, he encourages people to use money to build their own rich lives.
A few pieces of Sethi’s advice really stuck with me. These three tips have helped shape my own approach to personal finance, and they’re responsible for a lot of the things I’ve done right.
1. Find your money dials
Money dials is Sethi’s term for the different areas where we spend money. He says there are 10 that tend to be the most popular:
- Social status
Each person’s priorities are different. By finding your money dials, you can adjust your spending habits to match them. The idea is to cut spending in the areas that don’t matter as much and free up more money for the areas that do.
For example, I’ve turned up my travel money dial quite a bit. It’s something I love to do, and I’ve found that I enjoy it much more when I’m not on a tight budget. And even though I use travel credit cards to help bring down the cost, a large portion of my disposable income goes toward travel.
I’m able to invest more in traveling because I don’t spend as much on other money dials, like health and fitness. That’s still important to me, it’s just not something I feel the need to spend much money on right now. I’m fine without a nutritionist, personal trainer, or a membership to a high-end gym.
2. Forget frugality, focus on earning more