Continuing my current quest of self-education on personal finance, I picked up a copy of Ramit Sethi’s I Will Teach You To Be Rich: No guilt, No excuses, Just a six-week program that works at the library. I’ve been reading his blog, also called I Will Teach You To Be Rich, for several months now. It’s really the only “make more money instead of just being frugal” personal finance blog I read because I’m focusing on getting a firm understanding of how I spend my money before I decide how much I need to live comfortably. But even with his views not being a major influence on my finances right now, Ramit’s personality is just too much fun to not read!

I Will Teach You To Be Rich

Like most personal finance experts I’ve looked into, Ramit’s book has a solid “plan” for being successful with money. His plan is based on the “85 percent solution,” or the belief that doing something is better than being overwhelmed and doing nothing. So give up the idea to fully understand everything about finance and just get started–you can always do more later if want, but you’ll be further ahead than most people by just doing part of it now. His writing perfectly speaks to my peer group (20-something college educated kids) and while my parents would hate how arrogant he can seem, I loved his sense of humor. And the “just start with something and don’t worry about being perfect” approach really made it seem easy and practical to start learning personal finance skills now instead of waiting for that “someday” when we’ll all magically have more time and self-discipline.

Ramit’s plan is shortest of the three books I’ve read–Dave Ramsey’s plan can last years, and Suze Orman’s plan (review of her book coming soon) lasts months. But Ramit claims to teach people how to be rich in just six weeks. A shorter time commitment, an approach that doesn’t require perfection, and a sense of humor about a dry topic? Like I said, too good of a book to pass up! His six-week plan is broken up into six easy tasks that together make for an easily monitored and automated system.

Week one has you set up a credit card if you don’t have one; he’s a big fan of the consumer protection cards offer, and the potential for rewards points. But he does expect people to use cards responsibly, so no charging $4,000 dinners if you can’t actually afford them. In week two you set up new bank accounts–high-interest savings accounts and free checking accounts. He highly suggests forgoing traditional banks and using an online bank that has fewer fees and more convenience. For week three, readers set up a 401(K) retirement plan and sets up online investment accounts (but don’t fund them yet). In week four (weeks four and five are the cornerstone of his plan), you take a very honest look at household spending and create a “conscious spending plan.” This spending plan cuts everything possible from areas that aren’t important and puts all extra money into what you do enjoy. Love eating out? You can afford to do it every night–if you live in a really cheap apartment and drive an old car. By deciding what few parts of life are most important and focusing on funding those areas, Ramit’s plan motivates people to reward their financial skills with experiences; other finance authors in the “live more frugally” camp would rather cut costs in every area and save all the extra in an emergency fund. This fourth step highlights the main difference between Ramit and the other personal finance authors/bloggers I’ve researched, but it’s an interesting approach I plan on incorporating into my overall  philosophy on money. Anyway, the fifth step is to automate everything–all bills get paid on time automatically online, so you never have to pay late fees again. Automating allows people who struggle to remember dates or who don’t care about finances to spend one day of work for a lifetime of blissfully spending the money that’s left every month on the things they love. And finally, week six gets back to those investment accounts that were opened in week three by scheduling monthly automatic payments into the accounts.

It’s a simple approach that seems to work. Every week you only need to dedicate a few hours at most, and he even includes “if you really don’t want to do it, at least do this much” tips to highlight his 85% theory. And given anecdotal evidence from finance conversations I’ve had with friends, he really does have a point–even doing 85% of the work outlined in the book gets you light years ahead of other 20-something kids. I never carry a balance on my credit card, I’ve got a 401(K) set up and I automate all my bills and everyone seems to think I”m the most freakishly mature 23 year-old ever.

Just like the other personal finance books I’ve read, I don’t fully subscribe to Ramit’s plan. It would require tweaking to fit into a reader’s lifestyle and financial circumstances, but a single book can’t be written for every possible situation. What I do fully support is the idea that doing something is better than doing nothing, even if that something isn’t fully funded quite yet. I would recommend this book to everyone I graduated college with, and plan on buying copies for my brother and cousin who will graduate soon! So if you’re in your twenties or early thirties and want a no-nonsense financial plan, Ramit Sethi’s I Will Teach You to be Rich may be the perfect starting point.