Money Challenge Results: What Did We Learn From Ramit Sethi?

After recently reading Ramit Sethi’s “I Will Teach You to Be Rich," the MyBankTracker team set out to apply some of Sethi’s lessons into our own lives, last week. The challenge was to incorporate at least three things we learned, so how did we do?

Amy: Truthfully, I was only able to apply two things I learned: automating some payments and cutting down expenses ruthlessly. Or, at least, as ruthlessly as I can at the moment.

I have a credit card that I don’t really use (it gets some action maybe once every three-four months) and I figured I can switch over some of my subscriptions (Netflix, New York Times) over so that the account can stay active and I can continue to build my credit.

Another suggestion that Sethi had was to consider the expenses we had, and see if there was any way of being more stringent with them. One thing I picked up from the book was the advice that if we’re paying an exorbitant amount of money for services, it’s time to consider the necessity of them.

For example, the book cites that if you’re currently spending a lot of money at the gym or paying for cable, consider canceling those services and paying for as much as you need, or a la carte. I looked into doing this with the gym. Sadly, there are no options for non-members to get day-passes at my gym, but just being cognizant of the fact that I don’t go enough every month to justify the money I pay is a great way to feel ashamed that I wasn’t getting my money’s worth. Mind tricks, they’re great, I tell you.

Although I learned a lot from the book, there are some things I can’t fully apply to my own life yet -- such as investing -- I still plan on implementing certain things in the remainder of the year, like haggling down my credit card rate.

Claire: I really learned a lot from "I Will Teach You to Be Rich." While reading the book, I highlighted all of the the simple changes I can make immediately to my finances, and I am proud to report that I actually applied what I learned.

I also agree with author Ramit Sethi -- it's way more fun to make extra money to put away (my eBay store) than to pinch every penny, which can make people feel deprived. I refuse to give up my afternoon decaf expressos from Starbucks, and I'm pleased that he says you don't need to sacrifice those things in order to live a financially responsible life.

1. I moved my savings from Chase to Ally Bank because it has a higher interest rate. I think the current rate is 0.84%, which isn't much, but it's better than Chase! Plus, it's not AS accessible since it's on a different website and it takes a few days to transfer money back into my checking, so I am less motivated to take money out when I need it.

2. I moved my IRA from TD Ameritrade to Vanguard because it's way cheaper. I opened up an index 500, and plan on growing a diversified account with more investments.

3. I have a Capital One card that I haven't touched in over a year; I was actually considering closing the account, but after reading the book, decided against it. I took Ramit's advice and linked it to two monthly subscriptions I have (Hulu Plus and my internet bill), so there is some activity on it -- preventing the company from closing it.

4. I created my own spreadsheet on Excel to track my spending. I am trying to apply "conscious spending" so that I'm not wasting money unnecessarily. As long as I have enough put away each month, I am learning not to feel guilty about purchases I make.

Katherine: I had no idea your credit score is not in your credit report. Upon Sethi's advice I went and checked my credit report, and found that my credit score was not even in the report! I was given a "special one-time offer" to get my credit score for $7.95. Aside from that, the report was interesting, as I didn't learn anything new from it. It was reassuring to look at nonetheless, because it showed me what accounts I owed money on, and gave me an even stronger urgency to pay all my debts off so that I could see a better report of my credit ASAP.

In the same vein, Sethi made me hyper-aware of the importance of debt management. I an now much more conscious about using credit to pay for things -- especially when I don't have the money for it. Although in the past couple months I've been amazing at completely cracking down and only using my debit card, I have had a few slip ups in the past couple weeks. With Sethi's voice in my head, I went to take a closer look at my credit card statement, and found that I was charged almost $13 in interest last month alone! Knowing what I do now about the killer that is credit card interest, I plan on paying off those purchases the second I get my paycheck.

Simon: Since I've read the book before, there wasn't much that I hadn't already done to improve my finances. I have no debt. My financial accounts are pretty much automated. I don't have to worry (yet) about major life expenses like cars, wedding and homes. And, I do have alternative streams of income to boost savings.

One thing I tried to do over the weekend was to decrease the APR (currently 18.24%) and/or increase the credit limit ($5,000) on one of my credit cards. However, according to the customer service rep, my request required a hard inquiry on my credit report, which would ding my credit score. I told her not to do it. So, that didn't work out as easily as Ramit made it out to be. (To be fair, credit card issuers have tightened up underwriting standards since the book was published.)