10 Money Rules To Build Life-Changing Wealth

10 Money Rules To Build Life-Changing Wealth, According to Ramit Sethi

Diana Kelly Levey GOBankingRates   Sun, February 9, 2025

You probably have a few money rules that you made for yourself, like setting a budget when you go clothes shopping, never looking at the menu prices when you eat out or setting aside a certain percentage of your income for savings.

Podcaster, author and financial guru Ramit Sethi isn’t shy about voicing his thoughts on money, particularly when it comes to “money rules.” In a video from his YouTube Channel, “I Will Teach You To Be Rich,” Sethi dove into his top 10 money rules for building life-changing wealth.

As Sethi noted in the video, these are his rules. They make him feel happy and secure, and they allow him to continue building wealth. They won’t all work for us — ahem, most Americans can’t afford to buy a house in cash — but you should be able to find ideas from which you can borrow philosophies to help develop and formulate your own unique money rules.

Set Aside a One-Year Emergency Fund

Sethi acknowledged that he’s one of the few personal finance experts to suggest something that extreme — or should we say conservative? Most money experts recommend an emergency fund to cover three to six months’ worth of expenses.

The U.S. Bureau of Labor Statistics found that Americans spent about $73,000 in 2022, up about 9% over the previous year. If piling up $73,000 for a one-year emergency fund sounds daunting, start small. “If something really bad happens, I have extra cash available to tide things over,” Sethi said.

Apply the Rules of 10 and 20

Sethi said he saves 10% and invests 20% of his gross income at a minimum. In his book “I Will Teach You to Be Rich,” Sethi suggested saving 5% to 10% and investing 5% to 10% as part of a conscious spending plan (aka a budget).  So why are his money rules different?

You need to increase the amounts you save and invest as you earn more money, he suggested. If you followed the popular 50/30/20 rule, 50% of your money would go to necessities, 30% to discretionary items and 20% to savings. How you’d want to split that up between emergency funds, general savings and investing is personal.

Pay In Full for Large Expenses

This money rule suggests you have enough money set aside that you’re able to pay in full for large expenses, such as a wedding or a house. As part of this, Sethi has adopted a no-debt policy in his household. And yes, he said he started saving for his wedding before he ever met his now-wife.

Why so strict on this money rule? “I don’t want cost to be the first reason to make a decision, the second or even the fifth,” Sethi said.

Never Question Spending On Books, Appetizers or Charity

TO READ MORE:  https://www.yahoo.com/finance/news/10-money-rules-build-life-160025454.html

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