Ramit Sethi breaks down his CEO approach: cut your top two or three discretionary expenses by 20-50% over six months, then focus on earning more through salary negotiation since earnings have no ceiling. Finally, optimize what you spend by negotiating with providers for better rates and maximizing credit card rewards.
Cut back on expenses myself, but I recommend the CEO approach. That stands for cut costs, earn more, and optimize your spending. For cutting costs, I take a look at my top 2 to 3 discretionary expenses. Usually that's things like eating out. Aim to cut those by 20 to 50% over the next 6 months, but do it gradually. Then you can focus on the next part, which is to earn more. There's a limit to how much you can cut back, but there's no limit to how much you can earn. And a good place for a lot of people to start this is in salary negotiation. After you're earning more, then you can go on to the O part of the CEO strategy. This is where you call your internet company, you ask if they have any promotions coming on, you call up your credit card company. If you have debt, you try to negotiate a lower APR on that debt, or if you don't have debt, you make sure you maximize the perks that your card comes with. Focus on the CEO approach.
