Ramit Sethi’s Approach to Earning $200 a Month

by Minority Fortune

billpaying

The Two-Header Savings Approach


There’s victory in small steps. You would be surprised at the money you could save by keeping things simple. People commonly look for savings to come from the outside, but you could actually spare savings from simply reducing your discretionary spending. Ramit Sethi suggests looking to your two biggest discretionary spending areas (i.e. shopping, electronics, eating out, alcohol, etc.). Plan to reduce your spending over a period of time to get yourself in a long-term habit. Ramit suggests a goal of a 25-33% reduction within 6 months. That plan sounds efficient to us too.

To carry out your goal, you need a way to monitor your spending. Mint has offered a free but valuable way to track your goals. Their software allows you to make note of your plans/goals within the system, and it will keep tabs for you. You just input your credit card and debit card info in the software, and watch magic happen. If electronic software isn’t your style, you can manually make reminder notes per 1-week intervals (via phone, calendar, computer, etc.) to monitor your spending. This way you can make a small effort to generate big savings.

The “two-headed savings approach” has reasoning behind it as well. One, it’s simple. We tend to drown in too much information regarding budgeting/ saving, and we end up doing nothing. Two, it’s a payraise towards yourself. Three, you’ll be stopping the money-wasting rewards in slow increments. Focus on the bigger wins. Some people may get proud of themselves for avoiding a $120 pair of shoes and then go out and reward themselves with a $50 shirt. Crazy, right?

Simply put, Ramit’s savings approach is worth a try. If you’re serious about your wealth journey, reduce your bells-and-whistles spending. Look at the bigger picture.

Bookmark and Share

Comments on this entry are closed.

</