Ramit Sethi on CBS "The Early Show"

He insists it isn't a scam. But with a book and a blog titled I will teach you to be rich, it's easy to understand why some folks are skeptical. 26 year old Ramit Sethi began a financial blog from his bedroom while still a student. The early show challenged him to leave his apartment and offer San Franciscans some face to face financial advice. Case number one, Zach Turner saved for months for girlfriend Laura's engagement ring. Days after asking for her hand in marriage. An unexpected event required Ramit's hand in managing his money.

Getting engaged, I mean, that was stressful enough. And then to add a significant car.

Repair, a $3,000 breakdown that broke up Zach's goal to be debt free by his wedding day.

I think I really want to start fresh in my marriage.

So Zach used a spreadsheet designed to help him track his expenses. He learned he was spending a fortune dining out. So instead, Zach and Laura go on cheap dates.

Then we have four hours of a totally fun evening with friends and a shared experience. But it's not going to end up costing US$150 for dinner.

Ramit says that money saved should go straight to paying off their debt. Case number two, Susan Sue. She uses her ATM card for most everything. But the past year I've probably spent about $150 on overdraft fees, sometimes my savings. Ramit had a simple budgeting solution.

You basically take a few envelopes for the major areas of spending in your life you've got. One of the biggest discretionary ones is eating out, right?

To show Susan where her money goes, Ramit asked her to cash her paycheck.

We're gonna take cash and put it in these envelopes so that you can track exactly how much you're spending.

Consciously, he set spending limits.

And when you're done with 400 bucks, you're done eating out.

Ramit says this is a short term solution. Long term, Susan should get direct deposit and use her bank's bill pay service. Case number three, It's a food fight between Michael and Yukiko Meadows, who are distracted from their goal of saving for their children's college education.

We want to be able to save for our kids future.

One of each. Michael says his wife spends too much on impulse buys.

At the local Costco, they were doing.

A tasting on vegetable juice. My daughter tried it, she said she loved it. I bought it and she's had 1, 2, 3, 4, 5 out of it.

But Yukiko says Michael should take a brown bag lunch to work. Go to meats first for meats solution, focus instead on big savings like renegotiating your insurance premiums.

I don't think I've talked to my car insurance company since I signed up with them.

That is time well spent rather than nickel and dimes here and there, financial.

Changes that quickly add up.

Who has a receipt?

Bianca Solorzano, CBS News.

Joining us is Ramit Sethi. He is author of the best selling book I will teach you how to be rich. We are so ready to learn.

Good morning.

Thanks for having me.

Thanks for being here. So why should we take it from you?

Well, I think you know, when it comes to how credible or how expert is someone, it's all about results. And some of the readers on my site have been saving hundreds of thousands of dollars collectively over the last few years.

And they've done it by using your formula, which you call the CEO program. Let's start with C, which stands for cut costs.

Exactly. Sometimes we think about saving as just cutting costs and this is a good one. We know how to cut costs. When it comes to cutting costs, you can look at the big wins, not the little things. But look at like your subscriptions, for example. In one study for researchers found that people overestimated how often they would go to the gym by 70%. Would have been better to just go there a la carte and pay 10 bucks each time they went.

You recommend this a la carte system for so many things. Cancel everything, your, your cable, everything that is extra and then just pay for services as you use them.

Yeah, it's counterintuitive, but start off by doing that and see what you actually can live without. There's a nice site called billshrink.com I love it. Bill shrink billshrink.com and you can check how much you're actually spending for your cell phone and find a better plan that fits your life.

Oh, that's a great tip. Okay, let's go to E. Earn more. Wouldn't everybody like to earn more? What are you supposed to get another job?

Absolutely.

Well, you know, freelancing is something that sounds intimidating, but we all have skills that people want. If you can do fourth grade math or you can draw or you can even speak English, there are people on Craigslist who will often pay you to tutor their kids.

So if you have even a little extra time, look into.

Okay, that's sometimes $20, $25 an hour. It's not bad.

How else could you earn more?

Sometimes it's not about earning more, but actually keeping more of what you earn so each paycheck you get, before you touch it, make sure that you send part of it to your 401k, part of it to a savings account where you're saving for a down payment. Remember that by the time that money gets to you, it's going to be guilt free money that you can spend on things you love or need because you've already handled your money.

And there's a great formula in the book. You say exactly how much to put where let's go to the last one O optimize savings. How do you do that?

This is my favorite. You got to negotiate like an Indian.

Okay, you could say that because you're Indian.

I would be the only one. So when it comes to negotiating, these companies, they spend $300 to $1,500 often to acquire you as a customer. They don't want to lose you over a $20 fee. So you call them up and this is the key phrase. Times are tough. My cable bill, 70 bucks. Times are tough. I can't afford this. What can you do for me? They will waive your late fees. They'll waive your overdraft fees. And if you're really good, they will actually lower your APR sometimes.

So you can call anybody and everybody that you pay money to for any service and negotiate.

And you should, especially now.

All right.

Ramit Sethi, thank you so much.

Thanks for having me.

The book is I will teach you how to be rich. To read an excerpt, you can go to our website, early show.cbs news.com.