Ramit Sethi Shares A Valuable Lesson About Money That Most People Miss: 'Few People Teach You How To Spend Money Meaningfully'

Many people talk about saving money and building a nest egg. However, "I Will Teach You To Be Rich" author and financial guru Ramit Sethi believes there's a valuable money lesson that's missing from conversations.

"Few people teach you how to spend money meaningfully," the financial guru stated in a recent Moneywise interview.

People are good about telling you to avoid impulsive purchases. They also advocate for putting your money into assets like stocks and real estate. However, not everyone fancies the idea of passing away with millions of dollars in the bank. It's good to have a big nest egg, but you should also take time to enjoy some of the fruits of your labor.

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Restrictions Need Balance

The personal finance industry is good at telling you to restrict purchases. It's good to restrict certain purchases, especially impulsive ones. The money you save by not buying unnecessary things will add up in the long run. However, Sethi expresses how only thinking in terms of restrictions can lead to an unsatisfying life.

"No, you can’t buy coffee. No, you can’t buy jeans. No, you can’t go on vacation. Save your money until you’re 96 years old and then maybe you can take a trip in economy seats," he told  Moneywise.

Sure, it may benefit some people to cut down on coffee or avoid the latest fashion items. However, if you have a $10 million account but feel dead inside because of the missed opportunities, was relentless saving really worth it? That's the idea Sethi wants more people to consider as they work toward their financial goals.

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Spending Money Meaningfully

A rich life isn't just tied to a net worth. Sethi views a rich life as the ability to build wealth, achieve personal growth, and have a life aligned with your values. Spending money meaningfully gives people the flexibility to make big purchases if they provide long-lasting memories.

For instance, some people may say that you can't afford to go on any vacations while you are in debt or building up to a $1 million portfolio. Looking at your budget and cutting out a bunch of expenses is a good decision when you are looking to build wealth. However, Sethi's approach to building a rich life would allow people to go on a big vacation if it's on their bucket list.

Spending money meaningfully can help you cut down on purchases that don't have any meaning. You may become sharper with your money and more inspired to boost your income if you know you can spend it on meaningful purchases. 

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Don't Always Fixate On Costs

Sethi told Moneywise that he believes people who fixate on every cost "suck the life out of every room." This approach demonstrates that it's good to focus on costs in some areas, but it's worth ignoring the price tag if a purchase is meaningful.

Meaningful purchases don't always come. In fact, the fewer purchases you make for yourself, the more meaningful they are. It's similar to a room filled with clutter versus a room with a few items. Each individual item in a cluttered room doesn't carry as much meaning as the few items in a tidy room.

You can fixate on some costs, and it's good to observe when this happens. If you're thinking about the cost, it probably isn't a meaningful purchase. However, if the thought of buying something is more significant than its cost, then it may be a meaningful purchase.

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