An annoying email I got

113 Comments

Nathan writes:

This is nothing personal against you, because every personal finance author I’ve read says the same thing, but your advice is not for real people like me. The “spend less, save more” theory is great for singles or young married couples with no kids (and therefore, fewer attachments, expenses, etc.) I’m 30 years old, married, with two children. I make a very good wage for a 30-year old, but after a mortgage, two car payments, a wife who is a full-time student herself, daycare, and (many) other various utilities, activities, etc. there’s not much left for saving.

Granted, things will be better in a couple years when my wife is done with school and we’re back to being a dual income household. But all you personal finance gurus are people who have graduated from Stanford (or some other 1st tier school) and worked your way into a high paying, high end job. You represent about 0.01% of the population. Not that I hold that against you–I wish I had been that successful. But I need some other strategies to help me get my finances in order.

My response:

So what’s the alternative? Throw your hands up and say, ‘I give up — there’s nothing I can do’? Or are there small, systematic ways you can save more, invest more, earn more, and spend money in a conscious way?

I also pointed him to The Shrug Effect. He wrote back:

I think you miss my point. At no time did I resent your success and doubt that I ever could have done that. Had I had differing priorities in my younger days, I’m sure I would be in a much different position than I’m in now. But I chose to get married, have children, and support a wife’s dream of medical school, among other things.

[...]

My whole point, which you missed, was that most of the the personal finance articles available are not geared towards people in my situation.

Huh? I’m not the only personal-finance writer online — there are lots of other people who write about getting out of debt, frugality, etc. My response:

This is an interesting discussion so I’d like to continue on it for a minute, if it’s ok with you.

I understand your point, but I’ve seen thousands of articles about people in your situation. Few, very few articles, are geared towards young people who have everything together. Most of the articles are about how to get out of debt, how to spend less, etc.

I’m curious: Exactly what kind of advice are you looking for?

He didn’t respond, so I re-pinged him a couple days later. His final response:

After sitting on this a while, I realize that there isn’t really any advice I can be given. I want to–and do, for the most part–give my wife and kids whatever they want. Until I stop doing that, the whole saving more, spending less thing won’t work for me.

I think that’s very perceptive of him to realize that there isn’t really any advice he would listen to. Notice how at first he didn’t think any personal-finance advice was relevant for him (even though there are millions of articles online for every conceivable situation). Could the problem have been him, not the advice? Answer: Yes. So here are my thoughts.

1. If you don’t say no to things, your life is guided by external priorities, not your own.

  • If you don’t say no at work, you’re going to be resentful of your workload
  • If you don’t say no to going out all the time, it’s going to be tough to save money
  • If you don’t say no to your family sometimes, you’re not going to be able to save, much less grow your money

2. Ordinary actions get ordinary results. Look around. Do you see many rich people around you? No, because they are behaving in predictably ordinary ways: Not knowing how much they spend, not being conscious about where their money goes, and not setting investing goals. Want an easy way to see this? Go ask your friends who just went on vacation (or bought a new handbag or iPhone or whatever) this: “Wow, that’s awesome. How long did you save to be able to buy that?” Their reaction will be priceless, as if the antagonist from Saw II is holding their head in a vise and ordering them to look at the moon while opening their mouth. Try it.

As always, there are no secrets to personal finance. Fundamentally, you can either cut costs or make more money. When I say that, people roll their eyes, but they fail to dig into each part. Cut costs? That means saying no. That means being merciless with budgeting and negotiating and making smart purchases for the long term. Make more money? That means entrepreneurship, working two jobs, or asking for a raise.

The whole point of this site is that getting rich doesn’t happen to you. You make it happen. Until you step up, nothing will change.

Don’t miss my next post

facebooktwittergoogle_plus

Related Articles

How this guy can get people to read his emails

I send millions of emails a month. I also publish blog posts. Why do people read them? Today, a counterintuitive ...

Read More

Watch this 18-minute video on happiness

I have something cool for you today. I’m sharing part of my video interview session with Gretchen Rubin, the ...

Read More

113 Comments

 
  1. this is an awesome post, and so true — no secrets to personal finance

  2. Very well said. I was in a similar situation as the person mentioned above until I woke up. Yeah, why don’t I ever have any money? Oh, because I spend it all on stuff I don’t need and I put no effort into spending less.

    It took some work, it took some drastic cutting of expenses in some places, it took getting my wife to be in agreement to live on less money, but now we are making real progress and it feels really good.

  3. I started saving for my iPhone the day it was announced. :) So I’d love it if someone asked me how long I saved!

  4. I don’t know, a lot of the financial advice I read seems to apply to a lot of people. I’m 27, unmarried, living with my disabled father, making about $33k/year. We rent our home, I have a car payment, and yes the spend less than you make theory works for me.

    I’ve learned a lot from these financial bloggers, and money management is pretty much the same all around. People just tend to get more than they need, larger houses, more expensive cars, etc.

  5. I bet you that guy plays the lottery

  6. Arrrgh!

    I’ve read a number of Ramit’s posts about kicking ass and minding the small details. At one point, a few months ago, things clicked.

    My family and I tend to do very well (for a while) – we stay on budget, eat well (at home), and make a concerted effort to be effective with our family time. With predictable regularity, we’ll have “bad weeks” – work stress, aging relative stress, … and the floodgates come off. We eat out too much, stop exercising, and have “shopping therapy”.

    The “aha” moment happened when we realized those are actually the precise times to redouble our efforts – those are the times to eat well, exercise, and be frugal. We call it “kicking ass when the chips are down”. It’s the most important time to stay on track.

  7. Go you! I so agree.

    I’m 30 too and pregnant with our 3rd child. I stay at home, making us a 1-income family. And we save more than 20% of our income right now which means that money is working for us, not the other way around. We didn’t get lucky, we worked hard. We busted our butts to pay off car loans and student loans. And we do with out a lot in order to save money and avoid using credit. We say no to keeping up with the Joneses – which is hard.

    My point is that whining gets you nowhere. Making excuses get you nowhere. If you want to control your own money you have to do just that. You have to make choices that point you in the right direction. So yeah, that does mean (for us, single income, soon-to-be 3 kids) we forgo eating out, new cars, big houses, trendy clothes, new TVs, nice cell phones….a lot of status symbols. I guess Nathan needs to choose whether he’d rather look rich or BE rich.

    And I have to say that living with one income is worth more money than they could ever pay me to put my kids in daycare. You may feel differently but that is MY priority and it’s worth it to me to work for that. I think Nathan needs to find out what his priorities are and make it happen!

  8. I guess I relate to the letter writer but I have made my peace with it. I am married with a couple small kids and we have decided that we will continue to live in an expensive area (near Washington DC) and that my wife will be at home with the kids. This is not a time for being rich, except in the non-monetary way.

    Stability, health insurance, steady paycheck, getting home by 6 o’clock – these are very nice things to have. We talk about getting back on track (making more money!) in a few years when the kids are in school but for now, it’s just scrimp and save (spend less!).

  9. Interestingly enough, I find that the opposite is true. I’m a single, young (26), college-educated professional. I make significantly more than the national median.

    I get sick of reading articles on personal finance blogs telling me that I should stop buying coffee so I can safe money, or how to save $8/year on electricity by unplugging appliances that continuously have LEDs turned on when they’re plugged in. For me, all these things are so trivially small that I don’t care.

    I’d much rather read about how to manage six figure sums of restricted stock that I can’t sell yet, but I hear a lot more about how much money you can save by switching to fluorescent light bulbs.

    And incidentally, I just got back from a vacation. If someone asked me how long it took me to save up for it, I’d say “oh, a month, maybe six weeks, not too long.”

  10. Wonderful analysis, Ramit! When are people going to learn that the things they own, end up owning them?

  11. I have been able to save money the past five years with an income of less than $40K with a wife and two kids. I am in my early 40′s and went to a state university, our networth is now over $800K. My wife recently went back to work and we now invest all her income. There are choices in life, I would rather spend time with my kids than purchase anything they want. I do provide what the need but wants are different story.

  12. Awesome comments. And Joe, nice point — being rich is about more than just having money.

  13. I’m glad that guy finally came to his senses. It took me a while to get the point of saving money and actually start doing so. While I can afford to go out and buy a damned nice flat TV, a Porsche, and other so-called luxury items, I simply have no need for those things. My RSX is fast enough, saves gas, is in mint condition after 5 years, and most importantly paid-off. My wife’s Ford Escape is in mint condition and paid-off too. No car payments-woohoo! My old 32-inch Sony tube TV that I got free from a buddy a few years back works great…I only watch about 3 or 4 hours of TV a week anyhow.

    I think what people really need to realize that saving money is all about needs and wants. If you let consumerism, fashion, and other “wants” rule your life as so many people do, you will end up penniless but with some nice “luxury goods” to show for it. Me? I’d rather feel secure with giant piles of cash in the bank for the inevitable rainy day and just live simply. And yes, I’m married; my wife goes to school full time and her parents are living with us. We eat out once in a while and usually buy the freshest, local, organic ingredients for cooking at home. I’m the only bread winner in the family and we share a 1000 sq foot townhouse near my wife’s university. We save about 40% of my income in my 401K, IRA, and cash accounts every month. We discuss money often and come to a consensus about our expenditures on just about everything we buy that’s over $20 bucks.

    Anyway, nice post Ramit…I hope people really start seeing that their problems are really caused by no one than themselves and their expectations of what they believe is a fulfilling life.

  14. For goodness sakes. I’m married, 29 years old, and have two children- but the concept of saving and investing money is universal, regardless what extra money comes from each check. I may not have cable or eat out very much, but I’ve got a 12% return rate on an ever-growing capital. Financial blogs like yours are part of what woke me up and I appreciate them all.

  15. Hmm… I exactly match this guy’s demographic. I’m 29, married, have two kids, make a good wage, have two cars in the driveway, pay for daycare… I sound just like him. Yet I was able to start digging myself out of debt – and all my high interest debt is now gone. What’s the difference? I realized that all the extra stuff – the brand new car in the driveway, the 54″ plasma television – isn’t going to have much value if I’m up to my neck in debt and lose my job.

    Sometimes you have to grow up.

  16. That guy has nothing to worry about, except maybe divorce. When his wife graduates medical school, the only thing he won’t be able to afford is… well… nothing. I was in a similar situation 4 years ago. He just needs to keep the faith, and count down to graduation day, while keeping the wolves from the door. He needs to try to minimize unnecessary expenses in the short term while realizing that the easy street is coming soon.

  17. It’s oddly very similar to dieting. You talk to some people that are overweight sometimes and they want to know how you can get nice and slim and healthy WITHOUT making better food choices or increasing exercise (financial corollary: getting out of debt without making better financial choices or increasing our income).

    I recently had a little sit-down with myself where I said “I’m TIERED of complaining to myself and anyone who will listen that I can’t loose the last 20 pregnancy pounds” The following was key: I decided I seriously either needed to make peace with myself at that weight and move on __without complaining_ or I needed to make the commitment to drop calories and exercise even more (I already cook *very* healthy low-fat meals for the family, so deciding to count and cut calories was a big deal and I was already working out 3x’s/week). I then started to count calories and work out 5x’s a week, and now about 3 months later I stepped it up, I’ve lost all but 2 of those 20 pounds.

    It’s the same with the finances. My husband and I decided that we needed to pay off our debt (accrued all fixing-up and adding on to the house and landscaping the back yard). We just didn’t like it looming over us. In Jan of 06 we had nearly 70k and by Jan 08 it will be about 30k or so. But we made the decision that we like financial freedom more than we like eating out 5 times per weekend; more than we like dropping $100 at target on every trip; more than we like new furnishing for our newly fixed-up house; more than we’d like a new driveway (and I would R-E-A-L-L-Y, love that); more than we’d like an awesome vacation (we take modest ones); more than we like having hew cars (both of ours are 9 yrs old, but run well). In other words, our actions now match our goals.

    No one is going to pay off our debt for us, but us and OUR hard work. I know it sounds funny, but I think some people lack this epiphany — they hope it just goes away on it’s own, or I don’t know what they’re thinking to be honest.

    There’s no substitute for the immense sense of pride and empowerment we have knowing what we’ve done to date and that we’ll reach our goal before too long. It does take commitment and teamwork, I sorta take issue with telling him to tell his family no, it would work much better if he and his wife sat together and sorted out their true goals together. There’s nothing like team-work in a marriage and once both are of like mind, it’s AMAZING how much easier it is to come up with creative solutions / alternatives to “keeping up with the Joneses”

    I offer nothing really new here, I’m afraid, my husband and I cut spending and I made a little more money this year doing credit card arbitrage (which I would not recommend unless you have a lot of financial self-discipline) and for the record, we’re a one-income family and with two kids!

    91030Mom

  18. While I’m not exactly in his circumstance, I’m in a similair boat. I’m married and I’m still a fulltime student (graduating in December). My husband works full time and I’m interning. We’re trying to save money for a house downpayment and so we had to tell each other ‘no’ sometimes.
    We’re not trying to be mean or deprive one another, we just remind ourselves of the choice that we have. Go out with our friends (many single and working full time) or do something cheaper, like hosting a movie night or inviting people over for dinner. Personally, I’d rather have a house than constantly going out.

    I wish Nathan and his family well. Being frugal doesn’t mean saying no all the time, just cutting back now for the future.

  19. At least he came out of self delusion for a minute at the end there.

    There are lots of bloggers (myself included) that blog from the single income, struggling, with kids, making a better life for themself one penny at a time place. If he can’t find them he doesn’t want to listen.

  20. I applaud your ballsiness with this reader. I too am married with two kids and a tight budget. I’ve had to say no many, many times. It’s hard. The arguments can be long and tiresome. But in the end, not having a pile of debt is worth it. So is having a better perspective on what’s important (family and security rather than possessions that tend to break).

  21. Yeah, you can never help people who don’t want to help themselves. And to all the people who always complain personal finance bloggers and books all say the same thing, well that’s true but it’s because what’s hard is putting the advice into practice and sticking with it. I continue to read for continuted motivation. And also for learning about things that are more complex and take more time to understand (investing, taxes, etc). The simple, tried and true advice will always be the same.

    I also appreciate advice geared towards young (mostly single) college grads who want to save and prepare for the future but also want a… fun life. I think that’s pretty unique. I don’t care about saving for my kids’ college education. I want to figure out how to max out my Roth IRA every year and also go backpacking in Europe. Blogs like Ramit’s keep me on track and remind me that I can do both (and a lot more) if I make other small sacrifices and stop spending money on stupid crap or being lazy about cooking at home or whatever else.

  22. Ramit,

    Excellent post. I particularly liked the priorities you listed. I recently came to terms with this regarding work. I was working too many hours and never really punching out. Once I realized this mismatched priority as compared to my family, I’ve been a lot happier.

    Thanks!

  23. I applaud the guy who wrote you the email for being able to look at himself objectively and being able to admit that he has to change himself.
    I think you should change the title of your post and give the guy the credit he’s due.

  24. To continue with the praise on this post, well done. I’m glad the poster was able to come to a bit of an understanding of the *real* cause behind his situation.

    To mangle Yoda, there is no “can’t”. There is do, or do not.

  25. I doubt Nathan will ever read this comment, but I do feel for the guy. There are a lot of people out there who live a sort of hand-to-mouth half life that just can’t be balanced on any sort of ledger.

    I’m grateful that I’m not one of them. I suppose that being able to be grateful for that sort of thing is financial freedom. I suppose that we should all feel incredibly lucky if Ramit’s advice does apply to us.

    But . . . Nathan . . . if you do read this, I’d like to offer you this bit of advice. If you have the time and energy to become a consumer of financial blogs, you should invest that time and energy in thinking about what is GOOD and HEALTHY for your family rather than in seeking the advice of others. I give you this advice because you mentioned that you give your wife and kids whatever they ask for. I believe you do this out of love, and not some desire to keep up with the Joneses, as some here would suggest. But I’d like to take this opportunity to help you realize that the people you love do not always want what is good for them. Kids want candy and toys, busy spouses want convenience, dogs want chocolate, etc. As the grown-up with time and energy at the end of the day, you some times have to explain why spinach and trips to the library take precedence over trips to the toy store, why weekend bulk cooking is a better solution to a cramped dinner hour than a trip to the drive through and why dogs need to eat food that’s appropriate for dogs rather than table scraps. I hope you can apply this type of thinking to your finances as I do believe that it is one of many extensions to your family’s overall wellbeing.

    If you are looking for a place to start, I suggest that you think about: a). whether your “activities” have gotten too complicated and whether you can incorporate more wholesome and less commercial things into your life b). The hard questions: “Is my (mortgage, commute, 2nd car,utility bill, expensive private day care, etc) shooting me in the foot and if so, what does this imply?” c). what long term priorities matter the most (health, stability in your home life, a good future for your children, feeling “in tune” with your partner, etc) to you and the role finances play in achieving these priorities.

    While Ramit and his financial guru brethren are awesome, you really need to do your own thinking.

  26. I agree with J that Nathan’s gifts come from a place of love. I won’t fault any person for wanting to support and provide for his or her family. But it sounds like maybe Nathan’s desire to provide for his family now, during a time when maybe there’s not as much income, is taking precedence over saving money with which he could provide for them in the future. Now, this might work for Nathan and his family in the short-term, but it’s not very good for long-term planning. With a wife in Med School, Nathan’s practically a single parent. And a working one, at that. So I’m sure he and his wife have litte time to sit down and really plan out finances. But maybe as his kids get older he can make it a family affair to start saving and investing.

    In short, J’s comment is great and is written more thoughtfully than I could ever manage. ;)

  27. Not enough info in Ramit and Nathan’s email traffic to really make an opinion about Nathan and his family’s spending habits.

    I have just one piece of advice:

    If you can practice disciplined money management and separate the needs from the wants now, then your habits may become routines which will carry over into the future when your wife is bringing home a higher percentage of the family income. You’ll be more disciplined to save in the future, too.

    The most frustrating thing I see frequently is when people allow their spending habits to increase with income increases, ie – “I earn more now so I can spend more now”. If that philosophy is followed dollar for dollar, you’ll never get ahead, even with all the raises/promotions in the world.

  28. Great post today Ramit.

    That guy needs to scrutinize his own expenses. A few years ago, my wife told me she wanted to be a stay at home mom once we had kids. Knowing that she was serious about this, I began to look at what we spent our money on and the value we were getting for those dollars.

    Much to our surprise, we were spending it on garbage. Eating out, car payments, cable television, gasoline, new clothes all the time. We thought we were good stewards of our own money, but after examination a few months of expenses, we realized we were not.

    At the time, I was saving about $400 bucks a month in my 401k. Nothing more.

    About 4 months before my first child was born, I sold my Chevy Tahoe (savings of $350 a month, plus $50 insurance, and gas, maintenance, etc.) and started using public transportation. I cancelled our cable TV and bought a $10 antenna at Radio Shack – $100 a month. I canceled my newspaper subscription. Cancelled the alarm service for our house and installed dead bolts – saving $40 bucks a month. Cancelled the land line telephone – saving $55. We kept scaling back and back and back.

    Now I have 2 kids, my wife has not worked outside our home since my first child was born and we are saving $1300+ a month between my 401k, a roth IRA for both of us, and an IRA for my wife. We also put $50 a month into our each of our kids 529 plans (trying to figure out how to bump that up).

    It’s not magic, and I make a very modest salary so it’s not like I’m bringing home $400k a year.

    The point of my long email is, people spend too much money on items they don’t need, and wouldn’t miss if they went without. I actually enjoy riding public transport now…It frees up time to read, drink coffee, or just stare out the window. Others go, I can’t believe you do that…How inconvenient they say, quite the contrary.

    All in, we make $50k a year less without my wifes income, but our money goes much much further, and our lives are better because of it. We spend time at public parks and outside doing free activities instead of in front of the television.

    I read somewhere that “the true cost of something is how much of your life you have to give up to pay for it”. It’s really not about dollars and cents, but more about what you could be doing with your time instead of working to pay for all the stuff people think they need…

    Never again will I spend money on garbage I don’t need or can do without. My entire family is much happier that way…

  29. I’d bet hard cash that this guy and his wife are planning more kids they can’t afford. That is, if they even planned the first two.

    At least he had a moment of clarity at the end of the post. Not that he’ll change, but at least he’ll realize WHY his family is so broke.

  30. So the take home point for me is don’t have kids.

  31. [...] of the time, Ramit and I see eye-to-eye. This post, An Annoying Email I Got is no exception. The email Ramit received: This is nothing personal against you, because every [...]

  32. Very good post – and a reminder that if one isn’t making progress, it’s probably more personal resistance then a flaw in the method.

  33. This is a very insightful entry. Thanks for sharing your email interactions with us. It gives people a glimpse of how challenging handling personal finances could be especially when you have a family of your own. It’s not just the basic needs you have to attend to but other miscellaneous expenses as well. And I thought the 30-year-old dad had a very interesting reaction to your replies. He had a moment of realization. The problem doesn’t lie with the “lack” of personal finance articles out there. Rather, it was he who couldn’t apply any of the advices because he couldn’t say no to his family. It was through your answers that he realized that. This is amazing.

  34. [...] An Annoying Email A person, who sounds almost exactly like me in a lot of ways (30, married, has two kids, makes a good wage, has two cars in the driveway, pays for daycare), is sending out some rather bitter emails about a lack of advice for people in his situation (I’ve gotta assume he’s never read The Simple Dollar). This is how one person responded. (@ i will teach you to be rich) [...]

  35. Devil’s Advocate: Yep, that’s what I got from it too. Oh, and marry a doctor AFTER their ex has put them through medical school.

  36. Finally it comes down to choice. You can read all you want, listen to advise ad nauseam but if you don’t take that first step – nothing changes. And this is true not only for your finances but how you choose to live your life. It takes courage and conviction to take action – talk is after all cheap.

  37. I feel bad for Nathan, but only because he’s looking for some over-correction. He’s got a lot going for him that others don’t have. Makes good money, two kids, wife who wants to do more, cars, house, the list is probably much longer. I’m sure it’s been said before, but there’s nothing wrong with being satisfied with what you have (while looking for ways to improve IF they come along). My wife and I don’t have the income many PF’ers do, but I can guarantee that we are happy where we are. Would it be nice to have more money? Sure, but money and whatnot really are not the end-all-be-all.

    What good is it really to save and invest and live frugally if you are miserable (or worse, make those that you love miserable) the whole time?

  38. What’s really amusing is that the original writer rattled off pretty much everything he needed to do to save money in his first letter. Some things you can’t just get rid of — for instance, having children. Those cannot be returned. And there are choices that are made to facilitate dreams and/or future earnings (medical school).

    But then there are the things you can really do without. Two car payments, for instance. If we tried to swing that, we would be paying probably $1-1.5K a month on car payments. So we don’t do that and drive our cars for a while. We will likely have another car payment sometime, but we hope to never have two at the same time.

    Activities, well, you choose those, too. Also, daycare does get cheaper as time goes on, too.

    In addition, there are such things as “part-time work” and “night school”, which the wife could do to bring in some extra money. It’s nice to be a full-time student at 30, but especially with a family to support, you might need to cut back on your dreams a bit to make things work. Both my wife and I have advanced degrees, both were completed after the birth of our first child.

    The hardest thing about living within your means is realizing what those means are and having the discipline to keep them when SO many means of living beyond them exist.

  39. I guarantee if I looked at that guy’s family’s spending I would find ways for them to cut and (gasp!) save money to pay down debt or put into a (gasp!) savings account.

    Just like I have yet to meet a fat person who excercises consistently and eats moderately but whines about not being able to lose the weight, I have yet to meet a person who whines about not being able to save that doesn’t have things they could cut from their spending.

  40. GREAT POST Ramit! I am glad you pursued the writer till he responded with an insightful truth about himself. Life is choices and he made the choice NOT to save. Because in reality, he could choose to do it and it would be easy once he committed to that choice.

    Heck, I think saving money is a LOT easier than having kids.

    Mr. complainer needs to read more blogs though. The Simple Dollar is exactly like his life. There’s a lot of blogs out there in the same boat, but the themes in them remain the same. It’s about choosing to make saving important. I read about kids with lots of student loan debt trying to scrape by on a TA’s salary, but they are fully funding emergency funds because they know it’s important.

    This guy needs to take the next step in self scrutiny and decide what he thinks it is important to provide for his family. He’s thinking too short term, rather than in the long term (though the investment in his wife’s salary as a future doctor is long-term, it’s not guaranteed. I know too many wash outs from residency.).

  41. The key statement he made was that he’s 30 with two car payments. By that time in his life he should have been able to pay off at least one. At no point should a family have two car payments. Cars last long enough to where you can overlap and have at the most one car payment at a time.

    He also spoke as if he was 40 or 50. 30 is still young and plenty of time to start saving. If you are going to choose a certain lifestyle you often have to make sacrifices.

    My question to this guy – if he can’t save more -, is how many hours a week does he work? Whats his plan for growing his income? He sounds like he’s waiting for his wife to finish school as if that’s the magic bullet. If I’d have taken that route I’d have waited for my wife to finish her PHD before trying to put away some money. Now at just 27 we could both not work for a year and be fine. Now that she’s graduating next month her new job is just going to be a huge bonus or an opportunity for me to take some risks on my own career.

    I also did not graduate from ivy league and have made a well paying career out of one that averages around 40k a year for most folks.

    We did it by keeping a budget and by my constantly striving to earn more money by doing my job better and more. It takes both. I have a brother who is always working to make more but he spends it all. Doesn’t work that way. But if you can just get a little ahead, level off your budget, and keep working for more, then you’ll be set.

    It’s tough out there. But thats no reason to give up or settle for the way things are.

  42. Ramit, if the shrug effect isn’t true, why do you keep mentioning the fact that you graduated from Stanford. Why not give advice, just because you can? Of course, a school you graduated from says a lot about you and your values. I dare you to take that “I’m a recent graduate of Stanford” line off if you truly believe that the shrug effect is a bunch of horse shit.

  43. so basically that guy failed in life and still won’t listen to u
    as if when ur successful u can’t have a family and support them
    wut a crock of sh*t

    u should have responded, hey continue failing
    and no its not 0.01% thats successful
    its more like 5%

    tho i’m sure his higher math can’t be strong
    such as %’s and multiplication

  44. I find a lot of this personal finance writing annoying. I’ve got the frugality thing down pretty well: I don’t play lottery, don’t drink, don’t smoke, don’t go to clubs, don’t have an iPod or cable/satellite tv or cell phone or dvd player or XBOX or any of those other toys most of you take for granted. (I do have a used 500MHz PC and a dialup connection.) Basically, I don’t have a life, but frugality won’t make me wealthy on a minimum wage income.

    Personal finance stuff is written for people with ordinary incomes. It’s not written for the poor and has little relevence to us.

  45. Great post Ramit!
    I’m in my 30′s married and with 2 kids. Saving and investing takes work, it just doesn’t happen by itself.

  46. i can’t beleive ‘minimum wage’ actually posted that
    if thats the honest truth, go get a job doing some good old manual labor
    dial up! 500mhz computer u really hit the low in life. hows life in the 90′s bubble boy?

    of course personal finance stuff is written for more the average person, if your poor as hell like you are wut finance does ur person have like 20 dollars in coins in a mayonnaise jar?

    embarrassing, ur parents must hate u

  47. I really like this post but above all the comment made by DOUG L :) Thank You!!!! Sometimes there are words that WAKE YOU and this one did!

    I read somewhere that “the true cost of something is how much of your life you have to give up to pay for it”. It’s really not about dollars and cents, but more about what you could be doing with your time instead of working to pay for all the stuff people think they need…

  48. I agree with Ramit. You must sacrafice in order to gain anything. I am married, my husband and I both work full time and we’re currently paying daycare expenses for TWINS and expecting another, so I promise you – this guy has nothing on my financial situation. There is nothing I would love more than to further my education, buy a new car, etc… However, that is just NOT something that is at all financially reasonable at this time. It perplexes me that a person would decide to futher their education, after recently having two kids. I don’t understand the urgency, why not wait a year or two until thier in school and you can afford it (hello)? In this case the sacrafic is the kids and the family’s financial freedom, for the wife’s own personal gain. This family really needs to get on the same page! If not, it will only get worse, no matter how much money comes into the household…

  49. Excellent post- and I LOVED The Shrug Effect.
    People like this guy make me want to scream. They think that they are the first person on the face of the earth to get married, have kids, and support a spouse while they are undertaking some sort of endeavor. Guess what, THERE ARE MILLIONS OF US OUT HERE DOING WHAT YOU ARE WHINING ABOUT! Shut up, suck it up, and DO something.

  50. white collar: i already have a job, it pays minimum wage! i’ve already raised the change jar and now i’m living on fumes until next friday. i’ve always lived behind the tech curve and the tech snobbery and elitism i’ve faced are major annoyances. i didn’t even own a pc until the early ’90s when i bought components at a trade show and assembled my own 286. today i see all sorts of websites i can’t use because my pc is so lame.

  51. Ramit:

    At least this guy admits he won’t listen to advice and is not going to change their behavior. When I was a personal banker, I can not count how many people came to me looking for a “magic pill” to make their financial problems go away. But when we started talking about budgeting or behavior changes, they just gloss over like zombies. Too many people have never had to “step up” as you say and take responsibility for themselves and their actions. It as always been handed to them or handled by someone else. This guy is like so many others that simply want to play the “poor me” card. I make a decent wage and my wife stays home BUT we have no car payments, we have no debt other than the mortgage. We are not rich by any means. We simply live within our means. And living within your means does not mean sacrifice. It simply means living sensibly.

  52. There are some very easy suggestions, but I doubt he’d be willing to follow through with them. Two things jump out immediately.

    1) Sell your cars and buy cheaper ones. While I make 6 figures, I drive a 95 Civic because it lets me…get this…SAVE MONEY. Shocking, I know.

    2) Stop giving your wife and kids everything they want. Talk to your family, set a budget, and then let them decide what their priorities are.

    I’m early thirties, 2 kids, mortgage, single income (by choice), and have a wonderful life all while saving money. It’s not that hard if you actually decide to do it instead of complain that you can’t.

  53. [...] sick and tired of commenters telling personal finance bloggers that they’re unrealistic to talk about spending less and saving more, and that they’re not in touch with the [...]

  54. I’m usually pretty compassionate but I’m sick and tired of reading about these whiney comments.

    We make 43K a year, have two kids, one income, and give away 12-14% of our net pay before we do anything else with it.

    We’re paying off between 700 and 1000 dollars in debt PER MONTH.

    So stop telling yourself it can’t be done. Stop being a victim. Stop whining.

    I’ve been where you are. I’ve had your attitude. I got over myself.

    You can too.

  55. It takes two characteristics to succeed at anything: discipline and vision. It doesn’t matter if you are trying to lose weight or build a financial nest egg. If you can set goals and discipline yourself until you achieve them, you will succeed. If not, then you will be bitter and make up lame excuses as to why you are overweight or financially strapped.

    I think this person realizes this. He knows he can’t say no to his family. And, I don’t think he has a vision for his finances. Ramit handled this conversation well.

  56. I’m early thirties, 2 kids, mortgage, single income (by choice), and have a wonderful life all while saving money. It’s not that hard if you actually decide to do it instead of complain that you can’t.

    But can you have a wonderful life while saving money on minimum wage?

  57. John, right above me, gives two good pointers on how to control expenses when you’re in a single-income household with children.

    But rather than doing that, I prefer to remain unmarried and childless. I make a little less than 6 figures, but enough to be able to own a decent house, drive an expensive car, have a costly hobby, and max out my 401k and Roth IRA at the same time. Yes, if I wanted to be totally frugal I could sock away half my income, but what fun is that? Saving 20% puts me in excellent shape for early retirement without having to sacrifice my lifestyle.

  58. I spend about $20 a month on coffee, and other unneeded crap. I enjoy life, I could save more, but I’d rather not fork over my little joys here and there, unless I had to I wouldn’t stop drinking coffee, I’m 18 with a coffee love. I save over $100 a month, most months a lot closer to $200, I have 2 goals in my finances, Millionaire by 30, own my own successful business. Being rich isn’t about money, or want you look like, its about your net worth. The real rich have a positive net worth. The key to getting rich is controlling your money, knowing where it is going, and then doing something with it. I doesn’t take anything more then self discipline, and hard work.

    -Adam

  59. Oh Lord Ramit, this post cuts waaay too close to home. It is like the Roberta Flack song “Killing me softly with his song, singing my life with his words …” (that I remember in its original form, and you have probably heard on your parent’s “oldies” station or in a new remix.)

    The truth hurts. The behavior change is the tough part, and if you have spent your life being lazy with budgeting (that’s me) and helping everyone around you financially (that is my hubbie) and you throw in a general dislike of financial details (that is both of us) it works out to a perfect storm of a non-saving household.

    I just admitted on my blog (interestingly, before I came here to read this post .. coincidence or synchronicity?) that I need to spend a few hours with you with my head bowed in shame to soak up some financial education.

    Or actually, I just need to get my butt in gear and DO something.

    Good post – it really hits home.

    -Pam

  60. The only other strategy to spend less, save more, is earn more, save more. There is no creative accounting that will generate money out of thin air. If you’ve got some spare money, there are loads of ways to save and invest it but finding extra money means earning more or cutting back. There are no other tactics.

  61. This is another case of the entitlement mentality at work. Most people want it all, and they want it now, and then they wonder why they don’t have any money. Example: if his wife is in school, why on earth do they have two car payments? Can’t she, or he, get by with driving a used car that is paid off for a couple of years? At lease he got it right in his response: his current predicament is a consequence of the choices he made. It may sound harsh, but in business and in life there are no magic recipes. It takes time, work, patience and making the right choices to be successful.

  62. Ah. I see you’ve been attacked by Minimum Wage troll.

    For everyone reading these comments, please understand that MW has been offered free blog hosting by other PF bloggers so he can air his opinions and thoughts on earning minimum wage, but has yet to take anyone up on his offer. He complains the rest of us who make ordinary incomes don’t write for his audience. Even though he could fill that niche, he consistently declines to do so. He’s been around since at least Summer 2007, you’d think he’d jump on the blogging bandwagon to spread his message rather than tell bloggers their advice is useless.

    Again, it’s about choices in life. MW chooses to complain at us once we write something, but not actually start his own blog. I challenge you MW to take up FMF or Flexo on their offers of a blog. Flexo has helped me a lot and you may learn some new technical skills that can get you a better job. I certainly have, though I don’t need PHP for my day job.

  63. I just discovered your blog, and I really like it so far! I’ve subscribed to your feed, and I’m looking forward to reading more posts from you.

  64. It sounds to me like he could probably benefit from professional help (and it’s a foregone conclusion he’d LOVE the attention and status a financial planner would bring to him). If blogs written about every conceivable situation aren’t personal enough for him, he needs the coddling only a certified expert can provide. Too bad for him it will probably come with strings attached, like someone trying to hawk their products to him.

  65. Sounds like he had a revelation at the end of the conversation.

  66. Minimum Wage,

    I think that personal finance is MORE important the LESS money you make, because the less you make the harder it is to find any surplus.
    >Basically, I don’t have a life, but frugality won’t make me >wealthy on a minimum wage income.
    Just because you don’t have a lot of $ shouldn’t mean that you don’t have a life! There are a lot of wonderful things you can do for little or no money- you just need to find ones that appeal to you. Spend time with friends or family, write a novel, etc.
    No, frugality won’t do it on its own… But if your frugality let’s you set aside a bit of money to invest and you give it a long time to compound that could make you (financially) rich! Aren’t there other jobs you could do that pay more than minimum wage? Why not take a chance try one! Would it be that hard to get another minimum wage job or even your old job back if you quit? Alternately, try doing something else part time and invest that income. You can’t expect a better outcome unless you change something about your situation. So, are you happy where you are or are you unhappy enough to make some changes for the better?

  67. psst…mapgirl…there is a blog project in progress…should be up and running soon.

  68. [...] two car payments, child care,  utilities, and various and sundry expenses.) We won’t give away their entire exchange, but it ended with the reader’s honest assessment: “I want to — and do, for the most part — give [...]

  69. >The truth hurts. The behavior change is the tough part, and if >you have spent your life being lazy with budgeting (that’s me) >and helping everyone around you financially (that is my >hubbie) and you throw in a general dislike of financial details
    >(that is both of us) it works out to a perfect storm of a non->saving household.

    Pam,

    I suggest a different strategy for you- put aside the savings first, and then spend all the rest that is left. Just be sure not to spend MORE than is left. If you find that difficult- go to using cash. With cash you CAN’T spend any more than you have, and it is pretty easy see how much you really do have left. If you want to budget certain amounts to categories-then get a few envelopes label them and divide the cash up as you choose.

    Ideally don’t have your savings go to your bank account at all, or transfer it out immediately after getting paid and pretend it never existed. Start small and work your way up- it’s better to save a small amount initially then to not save enough. Then over time add to the savings once you are comfortable with your situation. For example, the next time you get a raise, put most of it into saving and continue to live as you have been. Pay off a car or other debt? Funnel that into saving too.

    -Rick

  70. I live on Minimum Wage, I even do some IT business on the side, the whole I can’t spend less then I earn is total bullshit.

  71. There’s always something that can be saved. If it’s only a dollar, save that dollar. It’s the habit that’s important. It’s hard to break the habit of spending, and hard to see where one could be saving instead of spending. But given time and the desire to change, one can find ways to save. I signed up for a 403 investment plan at work that takes pre-tax money out of my paycheck and puts it into whatever investments I choose. It’s a painless way to save because 1) it’s done for me automatically once I set it up, so there’s no temptation to say, “Well, I would really like to use that money for some home improvement, so if I just skip one month…” and 2) it’s pre-tax, so the chunk I see coming out of my paycheck is actually smaller than the chunk that goes into the investment, which feels kinda like free money, even though in the end it really isn’t (because eventually the taxes on it will have to be paid).

  72. Personal finance is real simple: live within your means. Avoid excessive debt. “Grow” your money first. Save it, invest it, then spend it.

  73. I’m sorry to say but I don’t agree on this one.

    Nathan has set his priorities: education for his wife and having children. These priorities are more important for him then having more money later in life.

    You argued that he should put money aside for investments. I think that is what he’s already doing. He’s not investing in stocks or saving accounts but in education of his wive! That education can improve the salary of his wife later on.

  74. I think this guy is basically asking how to be frugal and earn money while still buying everything his wife and kids ask for. Gee, there’s no PF blogger explaining how to do that? What a surprise!

    Actually, there are some–but their solution would be for him to change his mindset! You might direct him over to Trent at The Simple Dollar, who is in a fairly similar life position (minus the med school). Of course, he probably won’t like what he reads, which is…frugality.

    On a totally unrelated note: I thought I’d point you to this NYTimes Mag article: http://www.nytimes.com/2005/05/05/fashion/thursdaystyles/05online.html

    It’s outdated, from 2005, but might give you a kick (or something to write about). It’s all about upscale umbrellas, costing upwards of $400, and the author rationalizing it by saying “1950s intellectuals taught us that we are all manipulated into wanting things we don’t need. But it’s important to get over that idea! What we buy represents who we are to the rest of the world.”

    Ugh. Thought you might enjoy it, though!

  75. if you have a family and you make 43k. congrats on failure
    jesus christ wtf do you guys eat ramen all day
    walk everywhere?

  76. Jason you are so right, having two car payments with a house payment is a large burden. This guy was intially just making excuses for his behavior and “wishing” things were better.

    Well “if wishes were horses, then beggers would ride.”

    My mother always tols us that, and sometimes I do fall into the “wishing” self-pity mindset as well I think of her. I have gotten to point where I am by my choices and my choices not to choose which more often than not led to unsatisfing results.

    Like many others I try to keep my past failures close enough to inspire me to future success. I hope he can change his life to do the same.

  77. Aspiring Accountant said:

    Personal finance is real simple: live within your means. Avoid excessive debt. “Grow” your money first. Save it, invest it, then spend it.

    Simple, eh? Try living within your means when you start out with student loan debt and you warn minimum wage.

    Let’s see you make that work.

  78. College-Computer_Guy said:

    I live on Minimum Wage, I even do some IT business on the side, the whole I can’t spend less then I earn is total bullshit.

    Okay, do you live at home (with parents) or do you pay market rent, or do you have some cushy below-0market deal? Are you making payments on student loan debt? Are you getting financial aid or some other subsidy (e.g. money from parents)? Did you have an extended uninsured illness with a loss of income and an increase in debt? Are you paying almost $300/mo toward debt like I am?

    What IT business do you do? Are you providing IT services? If so, you’re probably not living in minimum wage. Are you selling product? If so, where did you get the money to buy it?

  79. Well said. I truly believe that it does take extraordinary action and well as extraordinary circumstances to be successful.

    -Benedict

  80. Minimum Wage,
    I swear, if you put as much time and effort into making your financial life better as you do complaining about your crappy life, you would be a millionaire. TOO BAD YOU SUCK!!!

  81. Dear Sucks:

    Let’s go with that.. What time and effort can I put into making my financial life better? I have no marketable skills and going back to school isn’t (financially) an option. I don’t have a car so there are lots of jobs I can’t get to. Last week I found some great janitor jobs at Intel but they’re swing shift and there’s no way to get back home at night.

  82. [...] Nice post at I Will Teach You To Be Rich – Ramit responds to a reader who says he can’t relate to the advice on personal finance blogs. [...]

  83. The comments by Minimum Wage are nothing new. All the personal-finance bloggers know him because he frequently posts comments that say, “I make minimum wage and there’s nothing I can do,” followed by a litany of other excuses — just like he’s doing here.

    Please don’t bother indulging him by responding to his nonsense. Minimum Wage, take it elsewhere.

  84. Great post. I feel for the guy, because when you have a wife and kids, all these decisions are group choices. (even the kids have a say, although you don’t think so, but their whining and complaining will create its own input) He can’t be the only one to say no, he has to have his wife onboard; even though he is the breadwinner, odds are she spends the family money just as he does.

    The fastest and easiest way to say “no” is “I don’t have any money on me right now.” As for Nathan, he should open a savings account and have at least some money taken away from himself each paycheck. If they are at least staying on top of their debts, then if the money’s not there they’ll (probably) not overspend. He doesn’t sound desperate, just disappointed that you can’t give him advice to change his lifestyle.

    Let’s just hope he doesn’t piss his wife off after she graduates and is making six figures. :)

    BTW, I’m disappointed in the post title. This was far from an annoying email, it gave you a chance to play therapist and open the guy’s eyes. And it was good for all your readers. That’s not annoying, that’s a gift. :)

  85. ok so he’s a troll who bugs “financial advisors”. the real question is, has any one of you been able to give him one bit of meaningful advice other than ridiculing him and calling him a loser?

    now if this blog is for people who are above a certain wage limit, it might be better to state that as a disclaimer right off the bat to avoid folks who do indeed make minimum wage and are truly struggling. after all, isn’t just easier to make money out of already existing money?

    i personally cannot imagine how people can have 3 kids when they cant even support themselves. but the world is structured around money, and its really a challenge to be able to lead an alternative lifestyle or one of your own choosing (like having 3 kids).

    also i didn’t quite find the guy’s email to be annoying. it felt more as though he eventually decided that you cannot help him, and you weren’t really listening to his queries, and so decided to withdraw from discussion (or maybe avoid your pings) by taking on the blame onto himself.

  86. [...] at I Will Teach You to Be Rich has the post of the week, writing about an annoying e-mail he got. One of his readers wrote: This is nothing personal against you, because every personal finance [...]

  87. I have to agree somewhat with one of the posters that many of the financial advice books written don’t address people in lower middle class situations. I laugh, well, didn’t used to when I read a book about ‘surviving unemployment’ or looking for a job…
    Lets see..arcane concepts like, can you cash in part of your 401k? What’s that? Budget how far your separation pay will take you..You mean the last paycheck before they said “See ya!”. Look at your finances and see what you can cut back on – do you need 4 vacations this year, maybe you can only take one..
    PLEASE! Now, before I get lumped in with that specific poster up there…after a lot of close calls, budgeting, knock down/drag out fights with a spouse who believed it could happen, we now only owe on our house. Both cars are paid for and we have plans for selling it soon and moving to something a bit newer (this one was built in 1900). It’s possible, it can be done, but it does seem that many budgeting and employment assistance books only deal with the people making $70+ grand a year and not the rest of the country.

  88. The best advice for low income people is to increase their income by going to college (or getting some other training that will increase their income- trade schools, etc).

    PELL GRANT!! Ever heard of it!? Well, I have because I wanted to go to college and didn’t have the money or parents who could bankroll it.

  89. South asian woman, many bloggers have tried to give minimum wage solid real advice. Just a few weeks ago, Trent a the Simple Dollar and JD at Get Rich Slowly offered sage and realistic advice. Minimum wage is a troll not because his concerns aren’t real, but shrugs off anyone’s offers of help and advice. His is a can’t do attitude. It’s one thing to understand that there are very real obstacles that make it difficult for someone to succeed on minimum wage, and another to say it’s impossible without making a real attempt.

  90. ah i see, dong! thanks for the links, i do see how MW could be a troll. the only advantange i can see from MW is that as he keeps bringing up his “concerns”, perhaps people get to think a little bit about poverty in this country (i’m not saying that i think MW is really poor or not. or whether he’s simply aiming to challenge readers and bloggers.) which seems to be quite hidden and most facilities are geared towards people who have some means already. also, a good exercise for bloggers to think more holistically about money and present their thoughts for us readers, so we reflect a little more on poverty also. as the disparity between the rich and poor widens, we’re going to see more and more conflict. better to be pre-emptive about the issue.

  91. The Internet: Full of obnoxious cranks since 1990 (back then they mainly used Prodigy).

    His point is that your advice sucks because he’s not willing to listen to it. Who cares?

  92. Wow, I feel for this guy.. this one line says it all

    “I want to–and do, for the most part–give my wife and kids whatever they want. Until I stop doing that, the whole saving more, spending less thing won’t work for me.”

    Such a huge mistake. The best thing he can give his family is more financial stability. Two car payments? Sell em both and buy older reliable cars. Oh, but what will the neighbors think?

    No sacrifice, no progress.

  93. The “spend less, save more” theory is great for singles or young married couples with no kids (and therefore, fewer attachments, expenses, etc.)

    I’m single…therefore, I have a one income household….I may not have the same responsibilities, attachments, expenses, etc. however different doesn’t mean less… If something happens to my income, I have no other income or no one else to fall back on! My mortgage, my student loans, my car loan, my activities, my everything is my responsibility!

    However, I’m not complaining…. I have my spending under control :-) Just annoyed at the “I have three kids and a wife to support so your burden is not as heavy as mine” assumption.

  94. The basic principles of spending less than you earn are universal. However, the minimum wage disclaimer suggestion may be warranted. Try budgeting $0? It gets kind of tricky and frustrating, doesn’t it? As an earlier reader stated, many folks stuck in the minimum wage, real poverty cycle have the “frugality thing down, ” and don’t live in denial – they know they are poor and struggling, many work harder or as hard as most on this blog, go to college, save and skimp and what happens when they miss one house payment or car payment or health insurance payment? Big corp comes down on them like a ton of bricks. Mr. Ramit, I;m not sure if you studied economics or psychology, or how much life experience you have, but there are greater powers prevailing … ranging from public policy flaws, sticky investing knowledge to “going to the right school,” and everything in between. The opportunities for advancement exist but just because they exist doesn’t mean they are available to all. Believe me, these “struggling folks” could teach you a thing or two about saving, about community, about ingenuity and about investing and hope for the future. I’m sure you know that the poor value a good education/training as much as the next guy. So, I don’t see anything here other than middle class rhetoric and middle-class solutions – good suggestions nonetheless – for when one actually gets there. I’m not sure the general “condescending” tone is appropriate either, but again it works for some, but not for all. So for now, i’ll stick to Warren Buffett.

  95. [...] yesterday Ramit over at Iwillteachyoutoberich got an email from a guy who was saying that all the personal finance he reads doesn’t apply to him. That [...]

  96. I’m wondering – aren’t there some situations where it really is almost impossible to save money?

    For example, I live in Israel. The average salary here is less than $2000 a month , and is taxed about 50% (that amount is in the top tax bracket!). Then, if you have a whole bunch of kids (as I do), you have to pay for schools and day care (if you work), which can cost thousands of shekels a month, food (thousands), mortgage or rent (thousands), car (thousand), phone/water/gas/etc. (thousand). And we’re not talking about people living a fancy lifestyle – we’re talking about a crappy car (and I mean crappy, not crappy in the American “Oh I have a crappy Honda Civic from 2004″ crappy – I mean “I have a crappy Renault something-or-other from ’92″ crappy), a tiny apartment (three bedrooms, five kids, and a living-dining-kitchen room – that’s it! No family room, den, office, etc.), and the most basic food. Here in Israel, prices are high, taxes are ridiculously high, and salaries are low.

    I’m sure there are people in this kind of situation elsewhere, so tell me – where do you save? How can you save?

  97. OK. On minimum wage: yes, it’s hard. It’ sucks. That said, it doesn’t have to be forever. You’re getting experience. If you’ve had the job six months, have you started applying elsewhere? Can you walk or take a bus to a library? Look for a book called What Color Is Your Parachute? It’s got some good ideas for marketing yourself. Don’t bitch to potential employers about current employers: you just want more responsibility, that’s why you’re looking for a new job.
    Can you do some extra of whatever you do in off-work hours as self employed? (If you do, save 16% for self-employment tax.) Can you get overtime? Can you get a second part-time job? Not having transport is rough. What’s available within walking distance?
    Saving . . . How many ways can you fix rice and beans? Dry beans and dry grains are about the cheapest food out there, and they’re pretty nutritious, too. Get a thrift store crockpot so you can start dinner before you go to work. Eat yesterdays leftovers for lunch today. Keep a pot of tomatos on your windowsil. Keep your heating down, like around fifty, and wear wool sweaters. Try the thrift store again. Leave the AC off. Use the internet at the libary. Use a prepaid cell for necessary phone stuff and make your family and friends email unless it’s an emergency. Ditch cable/satilite/netflix. Wash your laundry by hand in your tub or sink instead of a coin-op. Follow some of the frugal homemaking and environmentalist websites: they have good cheap tips.
    Read lots of stuff, everything your libary has on something you’d rather do. Volunteer, but carefully: in something related to what you want to do. Then put it on your resume. For instance, if you want to work construction, read everything on construction your library has, volunteer with Habitat for Humanity, and then you have experience.
    Preplan your spending very carefully. If it isn’t on your list before you get your check, it doesn’t happen this pay period. Learn what’s a sale price on groceries, and put a few extra bucks into stocking up when something you use is on sale. Then you don’t have to buy it when it’s not on sale. This takes time, but it helps. (It also helps emotionally, when you know you can still eat for two weeks or a month if you loose your job.) Be careful with coupons because usually they are for processed foods, which are more expensive. Sometimes, though, there are good coupons for canned foods. See if your local coffee shop has coupons from their complementary papers that you could have. It’s not worth it if you have to buy the paper. Look into what the fridge-free people do. That’s a fair bit of electricity you can save, if you can make it work.
    If you have student loans with the government, find out about hardship deferal and hardship payment plans.
    Hope this helps. In case you couldn’t tell, we’ve been there and done that. It does get better. It only seems like forever when you’re there.
    Miriam, if you’re a two-income family, check your math very carefully. We’ve found with three small children that it makes no financial sense for me to work outside the home. My potential earnings are completely eaten up by daycare, second car expenses, etc. Why work to earn nothing? Perhaps you or your spouse can do something from home to help out financially that won’t require the extra expenses, if your situation is similar.

  98. I think you have completely missed this person’s point. He’s right about you, and I’m not sure that you really comprehend the reality of the demographic of most people’s finances in America. The majority of America is not very well off. They are more like “Just getting by.”

    I think your advice would change drastically if you didn’t have a college education, 2 kids, a wife who didn’t work and a home that was large enough for 3 people not 4 but with massive mortgage payments.

    Maybe you should take a step back and realize this was constructive criticism not about this person but about you and your advice on your blog. Perhaps you should think about the advice you give and consider, “well, maybe this really is tailored to a specific audience.”

    You don’t do that now.

  99. Um, are they just getting by because they’ve made concious choices about what to do with their money and earning power? His wife is going to school. Could she be working? Yep. Would this lessen his so called burden? Yep. But they’ve made a choice to invest in her, so she can potentially earn more. They had kids by choice. They chose to buy that house, those two cars, and decided to take on those payments. If they couldn’t handle all those expenses, then maybe they shouldn’t have incurred them. He’s says the blog is all about spend less, save more, which isn’t the sole point of this blog. He and his wife are doing exactly what has been mentioned on this blog before, investing in her (by sending her to school) so she can earn more. Apparently, this blog does apply to him.

    People like to complain about how hard they have it. He’s got 2 cars, 2 kids, a house, and a wife. How’s that stack up against someone that goes to sleep to the sound of gunshots every night. Quit complaining. Be glad you can afford all this crap you think is such a burden.

  100. If someone actually has a college degree and makes minimum wage, then they should join the Military.

    They pay more than minimum wage, and if you retire, they will pay you 2 million dollars over 40 years.

    I’m currently in the Army, making 23k a year as enlisted. I go to college full time for free. My wife stays home.

    My wife wants to spend money on frivolous things. Fine. 50 bucks a month for both of us. Want something else? Wait, until next month.

    We owe 7,000 in credit card debt(0 percent APR Car Loan balance transfer).

    Like said before – we cancelled cable – 40 bucks a month saved.
    No home phone – 40 bucks a month saved.
    Only go out to eat once a month – 100 dollars a month saved.

    Using coupons on diapers and formula – 25 dollars a month saved.

    Getting free food/formula from WIC – 40 dollars a month.

    OH yeah and right now we are saving 12 percent a month into 401k. 6 percent into mutual funds, 6 percent into HSBC savings.

    I get out of the Army in 2009, at which time, the Army will pay for me to go to dental school.

    In 2013, I will graduate dental school and serve 14 more years in the Army.

    I will retire at the age of 42 – with a DDS degree and a pension worth over 2 million dollars (Paid as soon as I retired monthly).

    At that time I can open private practice and make roughly 200k or work part time private practice.

    Like Ramit said, what have YOU done lately?

  101. Ramit, I enjoy your blog, but this post smacks of condescention. This guy’s obviously in a very different financial situation than you are, but you might have offered a little feedback rather than the “so what?” defense. That doesn’t help anybody and makes you look more like the snob he’s accusing you of being.

    Others have said two car payments are a red flag. Absolutely. They should have one at the most, and it should be on something they plan to drive into the ground. A second car should be owned free and clear, even if it’s a beater. He doesn’t mention the other costs, but I’m betting they include cable/satellite, multiple cell phones, high-speed internet, etc. Some of these could be re-evaluated and either reduced or eliminated entirely. (Call the cable company. Threaten to cancel. They’ll likely knock the bill down by $10 a month.)

    Nathan, if you’re reading these comments, good luck to you. Even if there’s “not much left” for savings at the end of each month, put any spare $10 or $20 you can find into a savings account and don’t touch it. A year from now you could have a few hundred to start you on your way to a nest egg.

  102. Re: Sunbee’s comments …

    Those are U.S. solutions … albeit very very good ones. Outside of the U.S. (and even in some disparaged parts of the U.S.), however, the same structures are not in place, even affording the dry beans and grains alone can be a challenge in and of itself, most people already take the bus… and so on. (Refer to Mr. Ramits interview with Kiva’s Premul Shah of which a google link led me to this site). I like your challenge, though, because solutions exist even the most dire of circumstances – and those are the type of solutions that should be offered along with the, “…save the $20 you spend on lattes…”

  103. [...] loved this recent post from I will Teach You to be Rich. My favorite part said, Ordinary actions get ordinary results. [...]

  104. I’m a 24 year old, just basically finished my BSc degree and I’m an entrepreneur at heart, so taking that route from the start.

    I’ve been struggling with budgeting, always working it out to the t. I haven’t read your blog in a while, it was in my RSS reader, but I reinstalled windows and hadn’t gotten round to installing the reader again (exam time). So I read the first few pages today and came across “An annoying email I got”.

    I realised that, yes I want a good financial future, but that I’m not as committed to it as I should be. So now I’m taking the extra 10 minutes to walk to do my errands instead of using my car to do it.

    And I hope this little change will motivate me to make a lot of little changes.

    Feedback on my choice : I enjoyed the walk, I did my errands more efficiently and met a history teacher I had at school in grade 9, if I had used my car, I would have wasted petrol, gone to a shop that I don’t like going to and honestly would not have enjoyed myself as much.

    You feel good when you know that you’re making the right choices.

    Thank you for your blunt honesty Ramit,
    Tertius

  105. I think you are awesome. I can be more verbose but it’s really not necessary because that just sums it up. Thanks for investing your .02 in our world.

  106. Wow! An amazing post indeed. Ramit you broke it down perfectly. The first step to financial independence is about taking responsibility for the actions we’ve taken, and for the steps we need to take to create a better future for ourselves. If nothing else, I think your exchange with this gentleman helped him see that.

    No matter how dire, how poor, pay yourself first! That’s what I always say. And how about focusing on the abundance that exists everywhere around us, instead of always focusing on scarcity and limitations.

    Being rich is a state of mind!

    I’m new to your blog but I’m loving what I see so far.

    Thank you.

  107. He called you a guru. He’s quite generous right there. ;)

  108. I know a single mother with 2 kids (of which she has to pay an obscene amount for childcare), but she IS happy….really! She shops at Goodwill for her own & children’s clothes (BTW – Target donates a whole lot of inventory), housewares etc. She had to look hard at her finances and found hidden expenses – do you really NEED kleenex boxes, qtips, paper towels all over the place? For the ladies, 10 pairs of black pants? Buy NEW books at Barnes? When there is a library around the corner? This is being wasteful to some. It is to her. Living within your means and passing it down to your children and not giving in to their wants rather than needs is what its all about!!!

    She is my inspiration.

  109. [...] yesterday Ramit over at Iwillteachyoutoberich got an email from a guy who was saying that all the personal finance he reads doesn’t apply to him. That [...]

  110. Ramit, what’s u r take on this?

    Check out this post from Money Blog

    On $11 an hour, Jersey man made millions
    Posted Jan 17 2008, 02:29 PM by Karen Datko

    http://blogs.moneycentral.msn.com/smartspending/archive/2008/01/17/on-11-an-hour-jersey-man-made-millions.aspx

  111. Wow! I loved this. I just paid off $27, 000 in credit card debt in two years. How did I do it? Got a second job and really cut costs. It can be done! Next on my list, that student loan WILL be paid off in a little over a year!

  112. Well, I think it can be hard. The U.S. has almost no maternity or paternity leave laws, fewer flexible job options, no subsidized daycare… all of which mean you try to survive on one income or pay a lot for daycare, or remain at home longer than you’d like b/c it’s tough getting back into the workforce and tough to find a part-time job. It doesn’t mean you’re throwing money at fancy cars, gadgets, and overpriced coffees.

  113. Yep, It was so much easier to save when I was single and childless. I had complete control. Now my husband has credit cards and a checkbook, too.

    So, here are some meaningful ways to save a lot of money: 1) Send your kids to public school – at least for elementary and middle. Private school is a complete waste of money since the college applications don’t ask where your kids went or what their grades were for K – 8. If you think your public school is lacking, spring for some private tutoring. So much cheaper. This alone saved us $300k – and yes, we are the only family on our street in public school. And, we are likely the only ones with a big retirement account. 2) Buy a reasonably priced car and drive it for 10 years. Ignore your neighbors’ new cars and comfort yourself with your fat investment portfolio instead. 3) Go camping for vacations or stay at inexpensive motels. Skip the resorts. Don’t fly anywhere. Make Grandma come visit you. 4) Don’t buy jewelry and only shop at discount stores. Skip the big department stores. 5) Don’t buy tickets to concerts, professional sporting events, Disney on Ice, or the Philharmonic. These are really fun, but not worth the price tag. Only go to the movies once every three months. Lots of family entertainment is much cheaper or free. And, limit the restaurant meals. The kids don’t eat theirs anyway and you just end up thowing it away.

    Then, go ahead and enjoy a latte when you want one. You’ve earned it.