Ramit Sethi lists his favourite approaches to money:

1. Behavior trumps information. Knowing the perfect right answer is less important than taking action. Focus on small, innocuous behaviors. Like saving small every month.
2. Focus on getting things 85% right. You don’t need to get it perfect. But act.
3. Spend on what you love. Cut back on what you don’t. If you love something, spend money (or time) on it. If it’s not important, don’t.
4. There are 2 ways to get more money. First, you can earn more. Second, you can spend less. Cutting costs is great, but you can't become rich through savings alone.

Do this to get on a path to becoming rich:

1. Optimize Your Credit Cards
2. Open high-interest, low-maintenance bank accounts
3. Open Investing Accounts
4. Start Your Conscious Spending Plan
5. Automate Everything
6. Start Investing

A great place to start because it can have a big impact on your finances:

• Set up autopay to pay your CC bills
• Call to waive any past credit card fees
• Negotiate a lower APR
• Build credit history by keeping credit lines open
• Increased your credit allowance
• Take advantage of rewards
• Build credit. This enables better rates for larger items (for example, a house).
• Improve your credit utilization rate (CUR)
• Use the credit card perks like warranty doubling, car rental insurance, and trip cancellation insurance.

Open a no-fee online bank account (e.g. Ally, Capital One). Avoid brick n’ mortars banks

The problem with brick n’ mortar banks (e.g. Bank of America) is they need minimum balances to avoid fees. For example, Bank of America’s “free” checking account requires a minimum $1,500 balance. This locks up your capital.

Open:

• a 401(K) account
• a regular investment account.

Next:

• If your employer offers a 401(k) match, invest to take full advantage of it. Contribute enough to get 100 percent of the match.
• Pay off debts. This give you a significant instant return.
• Open a Roth IRA. Contribute as much money as possible. Check the IRS website for current maximum income levels.
• Money left over? Go back to your 401(k). Max this out.
• Money left over? Open a regular non-retirement account. Invest as much as possible.

Use a tracking tool to see where your money is going. (e.g. Mint) Don’t just go and “create a budget”.

Choose the things you love enough to spend on— and then cut costs on the things you don’t love. This leads to a happy, rich life, not living a life of frugality for no reason.

Think about your goals. Ask yourself if you’d rather spend $10 on lunch or save $10 toward a house or a car. If you would rather spend the money on lunch, enjoy lunch! You save money so that you can spend it later on the things that make you happy.

Use this schedule to help you set up your own automation:

If you’re paid on the 1st of the month. Switch all bills to arrive on or around that time, too.

• 5th of the month. Set up an automatic transfer to your savings account and to your Roth IRA.
• 7th of the month. Set up automatic payments for your bills, like cable, utilities, car payments, or student loans.
• Set up e-mail notifications. Get notified before your credit card is paid. So you can review it.
• Before you start investing, add a savings goal of 3 months of bare-bones income.

Invest in index funds not individual stocks. Put your own behavioral psychology to work here. Invest automatically and over long periods of time.

Once you’ve covered the basics (aka index funds), allocate 5-7% of your income to “mental outlets.” This is money for you to invest or spend however you like.

After you’ve maxed out savings and investments, consider your most important investment: yourself. Take a course, learn new skills, and improve your career trajectory.