First off, you should know that I’m a huge fan Ramit Sethi. He’s the author of I Will Teach You To Be Rich. One of the things he preaches is that everyone should be pursuing their rich life. According to Ramit, this involves being both ruthless and indulgent when it comes to your money. This means that you should be ruthless about cutting expenses that don’t mean anything to you. By the same token, you should indulge in those purchases that allow you to live your rich life.
I love this philosophy! It so very much aligns with my belief that you should prioritize your money in a way that brings your dreams to life. You work hard for your money. In turn, you should be spending your money in ways that satisfy your heart’s truest desires. You are the only person who knows what those desires are. Nobody else can accurately fill in the details of what you want with as much precision as you can. You should be answering the following questions every week, and taking the baby steps necessary to get to the end result that you want.
- What brings you the most joy?
- When were you the happiest in your life?
- Are there things you want to see-do-explore-taste-experience during your limited time on this little blue ball we all call home?
- How are you going to make those things a reality?
- Do you need money to make your dreams come true? If yes, how much?
Spend Money Where It Matters Most
I’ll use myself as an example. Pre-pandemic, I loved to travel to new places. Each year, I would spend thousands on overseas trips and I did not hesitate to try new things/excursions. I had no idea if I would ever be in that part of the world again, so I indulged myself and said “Yes!” to whatever was on offer.
Saying yes to an indulgent whim was how I was able to be one of the very first visitors to a magnificent, family-owned olive farm when I was in Spain. Chocolate ice cream drizzled with extra virgin olive oil would never have touched my palate otherwise… and I am ever so glad that it did! While in Ireland, I indulged myself after casually strolling into the most wonderfully smelling leather good store in Galway and buying a beautiful wallet that I use to this day. And Italy…ah, Italia! A beautiful, glorious country where I left no carb undiscovered and drank atleast two glasses of wine each day. I said “Yes!” to everything while I was there.
How did I do that? I did it by saving money before heading to the airport. Flights, accommodation, food, and souvenirs were all paid for in advance. The spending money I took with me could be spent freely on whatever happened to catch my eye. Travel is one of those areas where I indulge with abandon because it’s important to me. A nice chunk of every paycheque goes into an account designated for travel. That way, I have money waiting for me when I get itchy feet. Travel is part of my rich life, as Ramit Sethi would say.
Stop Spending on Stuff That Doesn’t Increase Happiness
I’ll be very honest. It became a lot easier to save for my heart’s truest desires after I took a switchblade to my budget. I cut out spending on stuff that didn’t make me particularly happy. The first thing to go was cable TV.
I’m a cord-cutter of long-standing. Truth be told, I haven’t much missed channel-after-channel of nothing to watch. Nearly a decade ago, I realized that cable TV is terrible. The shows on streaming services aren’t much better, but they are definitely way cheaper. For the same quality, a whole lot less money, and slightly less variety, I could still watch TV in my spare time. I had to ask myself why I was paying so much every month for cable TV, something that I didn’t particularly enjoy? Since I’m not a huge sports fan, there was really no reason for me to pay for cable every month. So I stopped paying for it.
The second thing to go was breakfast from the coffee shop. Way back in the day, I would buy a coffee and a muffin on my way into the office. It was my breakfast, and it was only $6/day. That was $30 per week, which was $1500 per year. I planned to work for 25 years, so that’s $37,500… Wow!!! After doing the math, I realized that I didn’t want to spend that much of my life’s energy on coffee and muffins. Investing $1500 per year at 6% for 25 years yields $82,296.77. Hmmm….coffee or satisfying my deep and abiding desire to have a very comfortable retirement? Decisions, decisions!
It should come as no surprise that I choose to wake up a little bit earlier so that I could eat breakfast at home. Guess what? I’m perfectly capable of baking my own muffins and making my own coffee. Now that I’ve started doing more meal prep each week, I’ve even started making pancakes and eating a couple in the morning before I leave my house. If I can buy frozen, processed pancakes from the grocery store, there’s no reason why I can’t make and freeze my own. Who doesn’t like a warm breakfast in the morning?
Getting to my office is atleast 30 minutes in one direction. Parking that started out at $5/day years ago is now up to $25/day, depending on the location. Each year, the cost of parking goes by $1-$3. Was $5 or $6 per day really such a hardship? When I was younger, the answer was “No”… but I had to admit that spending $12/day – parking and breakfast – was $60 per week! On top of parking, I had to fill my tank more often and I had more wear & tear on my vehicle. It was very, very easy to switch over to taking transit. Believe me when I say that $108.50 for a monthly bus pass is much, much cheaper than $250 or more for monthly parking. My gas costs are much lower and traffic problems are someone else’s to manage.
In order to find the money for one of my deepest desires, I ruthlessly cut my spending in these three areas. I don’t regret my choice one little bit! Missing season after season of Survivor has not diminished my life in any way, shape, or form. (Honestly, how is that show still on the air?) As for sports, sometimes my local sports team wins and sometimes they lose. Either way, I hear all about it during the morning-after chitchat on the radio and at the water-cooler. And should my local sports team be so lucky as to make it to the final game, the one for all the marbles and a year’s worth of glory that comes with winning The Big Game, I usually watch that game at the home of a friend for the low, low price of bringing snacks and dessert.
Are You Willing To Be Ruthless And Indulgent?
You’re the only one who can honestly answer that question for yourself. Whatever you decide is up to you, since you’re the one who has to live with the answers. I’m not here to tell you how to amend your current spending. Rather, I’m suggesting that you consciously decide how to spend your money so that you can maximize its use to acquire as much of what you really, really want as possible.
If you’re already satisfied with your spending, bravo!
However, if you think your money is going to something that doesn’t get you any closer to living the life you want, then be ruthless. Cut out whatever spending that doesn’t make you happy. It’s worth experimenting with cutting such expenditure(s) from your life for a little while to see how it feels. After all, the purveyor of the whatever-it-is that you trimmed from your budget will always happily take you back as a customer. And if you find that you can live without the aforementioned whatever-it-is, then you can redirect that money towards indulging on the things that bring you the most joy.
Figure out what it is that you want most and start arranging your money so that you can get it. Being both ruthless and indulgent with your money is a very effective way to ensure that your heart’s desires become your lived reality.