Ramit Sethi, the blogger behind I Will Teach You To Be Rich, has issued one heck of a challenge: if you follow along with his challenge, in 30 days you’ll have $1,000 in the bank.
I can’t think of anyone who wouldn’t want to have a spare grand in savings at the end of the month. Despite that, my first reaction to Ramit’s challenge was ‘Yeah, right — he’s probably going to have us doing all sorts of crazy things to save pennies here and there.’ But crazy frugality tips aren’t Ramit’s style. All of his previous posts have focused on increasing income, rather than decreasing spending. While this challenge does focus, at least partially, on decreasing spending, I think Ramit will continue to resist the more out-there approaches to frugality.
As I mentioned, I hate frugality and all the frugality sites that waste my time focusing on saving money on frozen orange juice and rice cakes so I can save $1 per week. $1? I find that much money in my shoe every day.
This challenge is based on the C.E.O. model: ‘C’ stands for cutting costs, ‘E’ is for earning more and ‘O’ is for optimizing spending. I think the combination is crucial: many bloggers and financial gurus focus on just earning money or just cutting costs. A combination, however, seems to be the only real route to a satisfying life. After all, no one wants to sacrifice all the benefits of the modern age just to avoid spending money, just as no one wants to spend every hour of every day at work in order to buy every little luxury. The balance that Ramit is demonstrating in his challenge is absolutely crucial to comfortable personal finance.
Before Ramit started the challenge, he asked his readers how much time they’d be willing to spend each day in order to save $1,000. Most respondents (215) were willing to spend an hour a day on efforts to save money. Personally, I’d agree: saving $1,000 in a month is certainly worth an hour a day. It works out to about $33 per hour — a rate I am more than happy to work for. The only difference is that with Ramit’s challenge, I’ll be paying myself instead of working for someone else.
The challenge officially started on Saturday, November 1st. Ramit has already posted two tips: Pack your lunches for the rest of the week and turn your thermostat down 3 degrees. Both are steps you can take today if you want to catch up. If you’re interested in saving your $1,000, you probably don’t want to wait much longer, though. It will get harder to catch up the longer you wait. You’ll also want to read the specific posts for each tip. Ramit has included both numbers on how much you’ll save as well as tips to get it done.
I think it’s worth noting that Ramit is taking part in his own challenge. He’s doing his tips right alongside readers in order to save up a grand of his own.
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