I Will Teach You to Be Rich: how to automate your money and spend guilt-free on what really matters to you

What is I Will Teach You to Be Rich about?

Ramit Sethi first published I Will Teach You to Be Rich in 2009, and in 2019 he released a revised second edition, with more than eighty new pages, from Workman. It's written for American readers, so it talks about US accounts and products, but its principles work in any country.

The book is a six-week program. In week one you sort out your credit cards and debt; in week two, your bank accounts; in week three you start investing; in week four you find out where your money goes and decide where you want it to go; in week five you automate everything; and in week six you learn to invest simply.

For Sethi, being rich isn't just about money: it's knowing what your rich life looks like and paying for it without guilt. One of his rules sums it up: you can spend extravagantly on the things you love, as long as you cut costs mercilessly on the things you don't.

Sources for this part:Workman Publishing, Hachette Book Group, Ramit Sethi, sitio oficial, I Will Teach You to Be Rich

What is Ramit Sethi's conscious spending?

Instead of a budget that forbids things, Sethi proposes a Conscious Spending Plan with four destinations for your take-home pay: fixed costs, 50% to 60%; investments, around 10%; savings for goals, 5% to 10%; and guilt-free spending, 20% to 35%.

The trick is the order. First you decide your fixed costs, what you invest and what you save; whatever lands in the last bucket you spend without regret, because your goals are already covered. Sethi suggests picking the few things that bring you the most joy, turning them up, and cutting hard on everything you're indifferent to.

An example with round numbers: if you take home 2,000 a month, you could put 1,100 toward fixed costs (55%), 200 toward investments (10%), 160 toward savings (8%) and 540 toward guilt-free spending (27%). The four parts add up to 2,000.

The percentages are a guide designed for the US, not a law. Sethi himself warns that if your fixed costs are above 60%, you may need to make some difficult decisions, like downsizing or cutting services. And investing depends on the options in your country: this article is educational and doesn't recommend any product.

Sources for this part:I Will Teach You to Be Rich, Ramit Sethi, sitio oficial, Ramit Sethi, sitio oficial

How does the book tell you to automate your money?

The core idea is an automatic money flow: your pay lands in your main account, and scheduled transfers send each part to its destination, savings, investments and bills. Sethi says that once the system is set up, managing your money can take about ninety minutes a month.

In his example, if you're paid on the 1st, the transfer to savings goes out on the 5th, leaving room in case your pay is late, and bills are paid on the 7th. He also suggests asking companies to change your billing dates so everything lands close to payday. And if you can't afford much right now, he suggests scheduling a tiny transfer, 5 dollars in his example, just to prove it works.

If your income is irregular, the order changes: first work out the bare minimum you need to live on each month and build a cushion of three months of that minimum before investing. In his example, if you need 1,500 a month, the cushion is 4,500.

Sources for this part:Ramit Sethi, sitio oficial, Ramit Sethi, sitio oficial, I Will Teach You to Be Rich

What do public agencies say about automating savings and bills?

On savings, they agree with the book. Condusef, in Mexico, suggests automating it with scheduled transfers to a separate account, ideally on the same day you're paid. Brazil's central bank recommends paying yourself first and authorizing your bank to make an automatic monthly transfer to your reserve. Finanzas para Todos, in Spain, says that even if the amount is small, what matters is consistency.

On bills, they ask for care. The CFPB, the US consumer financial protection agency, explains that automatic payments help you pay on time and avoid late fees, but if you don't watch your balance and it's too low on the payment date, both your bank and the company may charge you fees. In the US, the company must tell you at least 10 days ahead if the payment will differ from the amount you authorized or from your last payment. In Spain, Finanzas para Todos notes that you can cancel a direct debit whenever you want, in a dated and signed document.

Sources for this part:Condusef, Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros (México), Banco Central do Brasil, Finanzas para Todos, Banco de España y CNMV (España), Consumer Financial Protection Bureau (CFPB, Estados Unidos), Finanzas para Todos, Banco de España y CNMV (España)

Who is it for, and when is it harder?

It works best for people paid on set dates, people who forget due dates and people who feel guilty every time they spend on something they enjoy. Deciding once and letting the system do the work takes a lot of small decisions off your plate.

It's harder when fixed costs eat up almost all your pay: automating doesn't create money, and with a tight balance an automatic payment can push you into the red. Sethi himself admits his no-detailed-budget approach isn't for everyone: if your income is unpredictable or you're recovering from overspending, you may be better off with tighter tracking at first. In those cases, start by logging your spending and automate one payment at a time.

Sources for this part:I Will Teach You to Be Rich, Ramit Sethi, sitio oficial, Consumer Financial Protection Bureau (CFPB, Estados Unidos)

How to do it in Oslo

Oslo doesn't move your money or pay your bills: you set up the automation in your bank. What Oslo does is remind you and keep track. Under More, in “Your money”, open “Obligations”, tap “New”, pick what it is under “What is it?” and fill in “Amount”, “How often”, “Next payment” and “Remind me”: on the day or a few days before. When the payment goes out, whether you made it or your bank took it automatically, open it and tap “Log the payment”.

On Today, “Coming up” shows what's due next, and the “You have” figure already takes off what falls due before your next payday. That way you keep in mind what's already spoken for before each automatic payment.

For savings, create a goal under Money with “New goal” and, on the day your bank makes the transfer, tap “Log savings”. For guilt-free spending, under More, in “Your money”, open “Budgets” and set a monthly amount for “Fun”, or for whichever category you most enjoy spending on: Oslo shows how much you've used. Budgets have no limit, and on the free plan you can have up to three obligations and three goals. The Personal plan lets you have as many as you want.