nice-girls

No one likes to talk about money. Whether it’s how much you make, how much you save or how much is on your credit card balance, it’s a generally avoided topic of conversation. I think that’s my favorite aspect of Ramit Sethi’s book, “I will teach you to be rich” – that he starts the conversation and keeping it interesting enough that you want to keep reading about it.

While most of the book covers things I already knew and had implemented it was 1.) nice to see that and 2.) nice to get a refresher about what is important in personal finances and why. However, the book opens with a question I don’t typically ask myself: what does rich mean to you?

I felt a little silly that I had never stopped to think what being rich would mean to me, and to be honest I’m still working on figuring that out.

My favorite thing about the book though is how much it is about action. After each chapter there is a task list to complete that pertains to all the stuff you just read about. He makes it about as easy as possible to comprehend aspects of your personal finances and then do something to get them in order.  Here some of the aspects of the book that I found the most useful:

BIG WINS

I like that he focused on big wins and the overall picture. This was most evident when he was talking about budgeting. I would bet that most people you stopped and asked would say they stick to some kind of budget

Basically there are two solutions to fix an unbalanced budget: earn more money or spend less. Most budgeting guides or tips always go with spending less money, and spending less money on a small scale that adds up over time. Don’t buy coffee and bring your own lunch to work. Yes these will definitely save you some money, but they take daily, long-term commitment to really make a dent. Ramit offers up some bigger picture ideas that can save you a lot of money in the long run.  Obvious things like eliminating your credit card debt and lowering your card’s APR to working on your credit rating so you qualify for better loans on really big purchases. Qualifying for a lower interest rate for an auto loan or mortgage will save you thousands more dollars than quitting coffee. For some reason drinking less coffee seems like an easier concept to wrap your brain around though, perhaps because it’s a savings you can see.

A large portion of the book focuses on retirement planning, which was also very well laid out even for us self-employed people. Again the major hurdle for most people seems to be just starting. I have to say when I first opened my IRA I had very little idea what I was doing and not even that much money to throw in there. However that was almost a blessing, better to learn with a little money, than to start learning when I am concerned about retirement and throwing big chunks of change in there.  With the help of compounding interest and lots of time, you can’t really argue that starting retirement planning early is a big win.

AUTOMATION

No one likes constantly monitoring personal finances, which is why it’s best to automate them. The more of your money you can set on auto pilot and just review monthly the better. Provided you actually review things when the time comes!  I think as the internet takes over more and more of our lives this is happening naturally in a lot of ways.  When money is automatically transferred from my checking account to my savings account without me having to do anything or see it go, it’s much easier for me to accumulate savings.

MAINTENANCE

The final puzzle piece of personal finance domination is maintenance. Similar to the what I learned throughout, “Getting Things Done” without maintenance everything will eventually fall apart again. The good thing is that once everything is put into motion, maintenance doesn’t take much time out of your life and in fact seems to relax me since I feel on top of my business.

I feel like every topic I am tackling is hitting me over the head with the same lesson. The are no quick fixes or magic pills, there is only consistent effort. So far this is the best method in training, diet and personal finances…are there quick fixes for anything out there ?!? 🙂

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