5 important money lessons learned from "I'll learn to be rich"

During Ramit Sethi's 2009 tour for his bestselling book "I'll Learn to Be Rich", I had the chance to personally discuss with Ramit about his book and his personal finance tips during his visit to Tattered Book Store in downtown Denver. As a personal finance blogger, I've had the pleasure of meeting one of the best known personal finance space names online and hearing from the horse's mouth what he had to say about the management of our money.

But you do not need to sit down with Ramit to get his most important lessons. You can simply order his recently updated book and get all the details from the comfort of your favorite chair, couch or park cover. Here are some of the best lessons from "I'll teach you to be rich" that you will not want to miss.

1. Choose the best bank account

I am someone who loves traveling and hates bank charges. That leaves me with a short list of bank accounts that work well for my situation. Chapter Two of "I'll Learn How to Be Rich" is entitled "Beat the Banks." It states that you only need to open high-interest, low-cost accounts, and you may want to consider more than one savings account.

These criteria have led me to the bank accounts that I have today at Charles Schwab (my audit), Ally Bank (two savings accounts) and Capital One (a bank account). money market savings). All of these accounts have no minimum balance, no recurring charges and offer interest rates well above average.

2. Use your credit cards correctly

Credit card interest can be very expensive. If you can not pay your credit cards in full by the monthly due date, it is best not to use them. The same goes for people who adopt bad spending habits and who can not keep up with a budget when they have credit cards. However, if you can commit to paying your cards in full every month on the due date, they can turn into a gateway to huge payouts.

Credit cards with cash back and travel rewards can put a small amount in your pocket for every purchase or give you miles or points you can redeem for free travel. When you use these travel rewards well, they can be worth more than just money. But this approach is only worth it if you can avoid the interest charges.

3. Spend according to values

Chapter Four of the book is entitled "Conscious Expenditures". It is not a question of minimizing your budget and living as economically as possible. Instead, Ramit suggests you focus your spending on what you value most.

For example, it tells the story of a friend who spends five figures a year to go to bars, discos and other places of nightlife. But despite these costs, he is in good financial health because he primarily finances savings, retirement and other goals. Once you have fulfilled your financial obligations, you can spend without fear, within the limits of the budget you have defined.

4. Automate your investments

Good intentions to save and invest are good, but unless you take action, you could have serious financial difficulties in retirement. Fortunately, we live in a time when we can automate the vast majority of these economies without having to think about it.

If you have a 401 (k) plan at work, participate. If you do not have IRA or Roth IRA, open one. Set up automatic rules that match your payroll and payroll schedules and you'll never have to remember a manual transfer. Chapter Three of the book helps you answer the questions you may have about the investment account, while Chapter Five details automation.

5. A little action today leads to huge results in the future

A unifying theme that extends to the whole book is that you can take small actions today that give extraordinary results afterwards. Even if you save $ 5, $ 10 or $ 20 a month, it may not seem like much, but over time, it becomes hundreds, thousands and even more.

Sethi also shows that you can follow your own financial path. Do not worry about where your neighbors, family or friends spend their money. Try to avoid wasting money on things that do not interest you and try to make a good deal for large purchases so that you have the money to spend on what matters to you the most. If you master some basic skills, your financial future will be much better.