Watch This to Get Rich in 2024 (My 5-Step Checklist)

I want 2024 to be the year you fix your finances once and for all. Imagine being able to finally live a rich life in 2024. Well, I'm going to show you my exact checklist that has helped change thousands of people's lives. And I've broken it down into five easy steps. If you follow them, you will be able to finally achieve your financial goals this year. So let's get right to it. Step one. Take a look back. Back at the past year and create a vision for this year. Each year, my wife and I spend a few hours reviewing our year and we take a look back. We talk about what went well, what we would change, and then we plan our upcoming year. And personally, this is the best part of our annual review because you get to look back at the memorable times. You get to share your favorite photos. You get to dream. And then later, you. You get to tailor your finances to make your dreams a reality. By the way, you can do this alone or with a partner. It works either way. So, to start, I want you to ask yourself a couple of questions. And don't be afraid to dream big. This isn't the time to minimize your dreams. Oh, one day I'd like to have a beach house. It doesn't actually need to be near the beach. It actually doesn't even need to have a roof. No running water. Actually, I just need four walls. It'll be fine. It'll be fine. I'll find a way to make it go to the beach. No, this is not the time to minimize your dreams. It's the time to be expansive. What if we have an awesome year? What would it look like for us? Take some time to think about your answers and write them down somewhere. Question 1. What was your most memorable time this year? This really sets the stage for you to have a positive and fun conversation about money. And as a bonus, you can go through your photos from last year. Before meeting, each of you can bring a photo and talk about it. Here's why I remember this. Here's what I loved about it. Whether you're doing this solo or with a partner, this makes that memory really vivid. Question 2. What did we do well at and what could we have improved? When you get to this question, make sure you're not being judgmental about it. You're just stating facts. For example, you know, we said we were going to spend $100 a month on eating out, and we did it. Awesome job. An area where I think we could improve. I know I was supposed to be in charge of the groceries. And truthfully, I didn't really live up to that. I kind of slipped. Here's what I'm doing to change that. Next year or I think we both said we want to spend more time with our kids or at church or seeing friends. I feel like that's an area where we can both improve. So at this point you should feel pretty good. Yes, you've talked about what was memorable and yes, you have things to improve, but. But you're doing it together. Question 3 How do our numbers align with our plan? Now for this question, you need to be prepared ahead of time with your numbers. For example, here's a conscious spending plan with real numbers. Now, if you already have this set up, this is the perfect time to pull it out and see how you stacked up. By the way, if you haven't used the conscious spending plan before, you can download a free copy of the template in the description below. So, for example, maybe you said that you're going to save 7% per year. And just for easy math, let's say your household income is 100k. Well, did you save $7,000? If you did, great job, take the win. If not, acknowledge it. Say that, hey, we need to fix that. In fact, make your changes to your automatic savings right after this meeting. Now, as for the expenses, we said we were going to spend 500 bucks a month on groceries. Here's what we actually spent. So at this point, you're having a conversation to see what you plan for and what the actuals were. And when it comes to being off track, usually you find there are three to five areas that really need your attention. For most people, it's discretionary expenses like eating out and travel. Those are the consistent areas where people spend too much. But if you find yourself going into the weeds, we added an extra $13 here that we didn't account for 18 months ago. You've probably taken a wrong turn. You want to focus on the big picture. Most of your expenses should already be planned for. They should be relatively static over the course of 12 months. For example, cable. That's not really changing. Or your cell phone bill. All of these things are discussed in chapter four and five of my book. So that's how you do it. It's together. It's not blaming each other. It's not calling anyone a failure at life. It's just, here's what happened. Let's break it down and let's learn from it so we can improve for next year. Question 4 Going forward, what do we want to do more of. Now remember, you're not jumping into the numbers in this section. You're asking yourselves, what's our rich life for 2024? What do we want our life to look like? Let's paint the picture. And here's a tip. You can decide where you actually want to spend more money by figuring out your money dial. I've mentioned the money dial a few times. It's basically an area where you just love to spend money and you'd love to actually spend more. Here are 10 common money dials. The the most common one is food, usually eating out, then travel, then health and wellness. My personal money dial Convenience. And there's a whole bunch more. Look at these money dials. Which of these get you excited? And then look at your own spending. Does it match up? It could be spending more time with family, traveling, working on hobbies, convenience, whatever it is, you get to decide what's meaningful in your life and then you can dial it up. And then later, when we're going to make sure that your money actually matches up with your vision of a rich life. For example, my wife and I decided that we want to have more convenience in our life. So what would that look like on a day to day basis? We brainstorm some ideas. And what would that look like over the course of the entire year? Bigger things. We brainstorm that too. Convenience would be like we want to have our laundry taken care of or whenever we travel we want to have a car waiting for us at the airport. Just list everything you can think of. Be abundant. We're not talking about whether you can afford it right now. We're creating a vision and that's powerful. By the way, this would be a great time to use my journal to help you dream bigger. You can download the first chapter of it by clicking the link in the description. By now you have an overall vision for what you want to do more of and less of this coming year. And now you can get into the specifics of the planning process so you can actually use your money to make those dreams a reality. Step 2 Evaluate your spending following this step is going to change your financial life in 2024, and you don't have to track every last expense. A conscious spending plan can save you hundreds or even thousands of dollars a month while you still get to spend money on the areas you love. So this is where you get into the numbers and you decide how you're going to achieve your goals. Your conscious spending plan or CSP is basically your roadmap to your financial Goals. Now, if you find that your spending does not align with your goals, your spending is going to take you in other directions and you're going to be wondering, where's all the money going? I don't want that for you. I want you to live your rich life. So on a given month or a given year, you can look at your life and you can say, yes, we are spending time and money, the things that are important to us. Now, this might take you a little while to look at your numbers, but this is important. It's crucial to being honest about where you are spending your money because then you can figure out how to make it go where you want it to go. For example, if you want a babysitter so you can go on a date night once a week, you look at your spending, you go, we're not doing that at all. In fact, we're spending way more money eating out. But part of our rich life is to have time to connect together. So you go, let's look at the csp. How much would this cost? In fact, let's do it right now. Let's go into the conscious spending plan. Where would that money come from to achieve this goal? All right, looking at this, we're probably going to have to cut back on shopping if we want to do it. You can make those choices and trade offs together. And maybe after looking at your numbers, you don't think you can do it once a week, but maybe it might be more practical to do it every week, other week. That is how you redirect money towards what's important to you. So use the percentages listed in the conscious spending plan as general guidelines, but take them seriously. If your money follows them, that's a huge win towards a rich life. Using the conscious spending plan template, when you fill in your numbers, your percentages will be automatically calculated for you. Let me break it down. Bucket one, fixed costs. This bucket should be about 50 to 60% of your take home pay. If your fixed costs are too high, you're going to feel like you have no money left over. For the majority of people whose fixed costs are too high, it's usually housing and their vehicle costs. So if your fixed costs are over 60%, hone in surgically on these areas. First. Bucket number two, investments. This is where real wealth is created and the earlier you start investing, the more you will have time and compounding on your side. This bucket, in my opinion, should account for at least 10% of your take home pay. And if you aren't investing at least 10% I would stop and I would look at what's going on. Are we spending too much on fixed costs? Are we spending too much on guilt free spending? Or have we basically just not set up investments at all? And so every month we're feeling guilty, but we're not actually automatically sending money to our investment accounts. If your employer offers a 401k match, make sure you're contributing enough to get at least 100% of the match. Of course, more is usually better. A 401k match means that for every dollar you contribute to your 401k, your company will match your contribution up to a certain amount. For example, let's assume you make $100,000 and your employer offers a one to one match up to $5,000. That means if you contribute $5,000, your company will match it for $5,000. That is free money. You've got to do it. You should also make sure that your money is being invested. Don't just let it sit there. Target date funds are fantastic investments that I recommend to my own family. Index funds are also great. You can see the relationship between the two in chapter seven of my book. Just remember, the money you put into a retirement account like an IRA or a 401k still needs to be invested. Speaking of that, confirm that you are contributing the max to your Roth ira. If you are eligible for a Roth ira, you can just search for Roth IRA contribution limits to find out the exact amount you're able to contribute. Again, make sure that money is being invested. Then there are other options you have available to you on my ladder of investing. In fact, you may have options like an hsa, a health savings account that actually can be invested. That's an amazing account with triple tax advantages. The point is you have a lot of tax advantaged accounts where you can invest. This stuff is not that confusing. You can learn about it. It takes a couple of days and you will be set for the rest of your life. Let me show you an example. Take a look at the difference between these two examples. Savvy Sally actually invests less, but she ends up with $60,000 more. How? Because she invests $200 a month from age 35 to 45 and then never touches that money again. Now we have Unsavvy Dan. He's been too busy to figure out how investing works and he never said, hey, I want to sit down and buy one single book about personal finance. Is there a book out there called I Will Teach youh to Be Rich which has sold over a Million copies? No, he never didn't have time to read that. Anyway, Unsavvy Dan doesn't start investing till he's 45, at which point he invests the same amount, $200 a month, until he's 65. So rather than 10 years, he invests for 20 years. What does that mean? Savvy Sally still has way more money, all because she started early. And that's what I want for you. I want you to start now because time is on your side. Bucket number three, savings. I recommend saving at least 5 to 10% of your take home pay. And this is how you pay for those big ticket items. The family vacations, the shoes, if that's what you want. The tasting menu. Revisit your savings goals. Are you including an emergency fund? Are you saving the right amount over the right period of time? If not, this is a great time to tweak your contributions to to your savings accounts. Now, one savings goal you should always be working towards is saving three to six months of basic expenses in an emergency fund. Now I want to remind you because it can feel overwhelming. Three months of expenses, that's going to take forever. It usually takes years to fill up your emergency fund. Here's my suggestion. Take your time. Just make sure that every single month you are automatically saving money. And that's the important part of saving. Most people go through life going, oh, I try to save every month. I don't try anything with my money. I don't try to brush my teeth, I don't try to save. I set up a plan like you're doing right now, and then I set up automatic savings and investing so my money goes exactly where it needs to go. I'm not logging into my savings account every month. What a waste of time. Set it up to be automatic and then get on with your life. Which brings me to my favorite bucket of all. Bucket number four, guilt free spending. This bucket should account for 20 to 35% of your take home pay. And you get to spend it on whatever you want. Beautiful clothes, trips, eating out, whatever you love. Now when I tell people these numbers, 20 to 35% of take home pay, they're surprised. That's a lot of money. I go, yeah, it is a lot of money. You just need to make sure you're hitting your other numbers. And that gives you the flexibility of 20 to 35% per month on guilt free spending. So here's what you do. You look at your current spending in guilt free and you account for everything. That anniversary dinner you had Extra trip you took that you didn't plan for. And you make sure you're accounting for all of it in your conscious spending plan. All of this will help you have a smooth running system where every single month you're saving, you're investing, and yes, you are also spending money on the things you love. That brings me to step number three. Negotiating any bills. And now you can easily save hundreds, sometimes thousands of dollars doing this. That's why I'm adding it to the checklist here. Now, a lot of Companies spend over $1,000 to acquire you as a customer. That means they don't want to lose you. And they often have introductory rates or lower monthly fees if you just ask. This is especially helpful if you're currently paying down credit card debt, since doing this can result in finding an extra thousand dollars a year that can go towards your bills. So let me show you some bills and fees that you are currently paying that you can try to negotiate down. They could include things like your cell phone bill, car insurance, cable and Internet, bank fees, and your annual credit card fees. Pick up a copy of my book and go to the index to find negotiating. Under that, you're going to find every single word for word script that you can use to negotiate your fees. Let me show you an example of a word for word script that you can use right now to call up these companies and negotiate your accounts down. One last thing. Make sure you take the money that you're now saving and redirect it to where you want it to go in your conscious step 4. Use your credit card perks and crush your debt. I want you to take full advantage of your credit cards. Now, there are some people who say, don't use credit cards at all. They're evil. Okay, they might be evil, but I want you to learn how to use them to to your benefit, not to shrink away. Oh, I'm so scared. I don't know if I can handle it. I'll just hide like an ostrich and hope that the evil credit cards don't get me. Stop it. Let's learn how to use the perks of credit cards which help us build credit, which offer tons of perks, such as automatic doubling of warranties, cash back, travel points, all of those things. But yes, you need to responsibly spend and stay out of credit card debt. All right, here's what you do. Call your credit cards and ask them what perks the credit card offers that you haven't taken advantage of. For example, I just did this over the Weekend, I searched for amex Platinum perks and I was like, oh, wow, I forgot that they cover my New York Times subscription. They also cover a Disney plus subscription. There's a whole bunch of perks that I had not signed up for. So I went ahead and made a change on my Amex Platinum. Your credit card also offers perks like, like automatic warranty doubling, which means you don't need to buy an additional warranty, and a whole bunch of other things that most people don't know about as part of their secret credit card perks. Now, if you are carrying credit card debt, I want you to pay that off aggressively. Credit cards often charge 22, 26, 28%. That is insane. And it means that if you're just paying the minimum, your debt is going to keep accumulating. Now, if you've already created a debt payoff plan or you're paying down your debt, that means you know the exact month and year your debt is going to be paid off. Revisit that plan. Are you still on track? Can you put an extra hundred dollars or five hundred dollars a month towards that? Now, for most people, like 95% of people, they never even heard the phrase debt payoff plan. They go, what? I thought, I'll just pay the minimum forever. You're going to be 255 years old before that stupid debt is paid off that you used to get a table from Ikea. Let's make a plan. Go online, search for debt payoff calculator. Plug in your numbers. If you go Ramit Sethi. That might be nice if I knew the numbers, but I so overwhelmed. Call up your credit card and tell them I need your help. What's the balance? What's the interest rate? How much am I currently paying? Make them work for you. Plug in the numbers. Now you're going to know the exact month and year that your credit card debt's going to be paid off. Now, a lot of you going to start crying right now. Oh my God, I'm so sad. This is so horrible. I never confronted my numbers before. I just prefer to keep my head in the sand. Ramit Seti why you make me cry? I love making you cry. Because what you're going to do next is, is you're gonna wipe those tears away, okay? Wipe. In fact, lick it. Lick it. Because I want you to remember the taste of those tears. You don't want to taste those tears again. So this is what you do next. You go, damn it. Why did I let myself get into this situation? What I'm gonna do right now is create a debt payoff plan. You plug in your numbers, you find out, oh my God, it's gonna take me 2 years, 8 months, or 28 years to pay off this debt. You know what? That, that I'm going to plug in an extra $100 a month. Oh my God. It cut it down by 15%. What about if I put $250 additional per month? Where am I going to get the money? Well, now that I have a conscious spending plan, I know that I'm in control of my money. My money doesn't control me. I can push levers and control it. Are you going to cut back and reallocate your money towards the debt? Are you going to make more money and put that extra income towards your debt? That's your choice. The point is you, you're now taking control. Next, check your credit report. Now you can get your free credit report once a year@annualcreditreport.com this is a great time to do it on your credit report. You're going to want to look for any mistakes, fix them right away, and then check your credit score, especially if you plan to get a loan or purchase a car or a house within the next year. It's important to know your credit score since this affects how much you're going to pay in interest. And your credit score can affect you to the tune of hundreds of thousands of dollars. For example, the higher your score, the better interest rate you're going to get on your mortgage. The better your interest rate, the lower you're going to pay every single month. Good credit means lower monthly payments as well as a lower total cost. Just take a look at this example. Take a look at how much having a low credit score between 620 and 639 will cost you on a mortgage compared to a high credit score based on the current US median home price being around $400,000. If you put 20% down on a 30 year fixed rate loan, your loan amount would be $320,000. But based on your credit score, you'd end up paying thousands of dollars more if you have bad credit. In this case, having a low credit score would cost you 2,300amonth, while having a high credit score would cost you 1,959amonth. That's not a huge difference on a monthly basis, but zoom out over 30 years. With a low credit score, you'd end up paying $123,000 more for the same house as someone with a high Credit score. Now, please remember this before you send me an email one week from now saying ramit, the numbers have changed. What are you talking about? Don't email me that. These numbers change all the time. For the latest figures, you can search myfico Loan, Savings Calculator or Mortgage Calculator and you can plug in the latest numbers. Now you understand why having your credit score is important. To find your current credit score, you can get@myfico.com now here's a bonus tip. This is especially helpful if you are currently carrying credit card debt. Try to renegotiate your credit card apr. Did you know you can do this? Sometimes you can. Lowering your APR can save you hundreds, sometimes thousands of dollars in interest payments, depending on the amount of debt you have now. The better your credit score and on time payment history, the better your chances are of negotiating a lower apr. Call up the number on the back of your card, tell them you're getting serious about paying off your debt, and ask if they can lower the interest rate. Sometimes it works, sometimes it doesn't. It's okay either way, but unless you ask, you'll never know. All right, we've got one step left. But before we get into that, if you're not subscribed, do me a favor, click subscribe or follow so I can keep making these videos for you. All right, on to step number five. Earn More. If you're feeling overwhelmed by debt, or if you're looking at your numbers and you go, we've cut to the bone and there's still nothing left. How are we supposed to save or invest 5 to 10% a month? Then I want you to think about earning more money. Now remember this, there's a limit to how much you can cut, but there's no limit to how much you can earn. And a lot of us focus strictly on how much money we have, but we rarely zoom out and say, hey, wait a second, have I actually been intentional about earning more? Well, let me give you three different ways you can start earning more this year. Number one, negotiate a raise. Now, if you want to negotiate a raise, click this link. It's going to take you to our program on salary negotiation, which includes exact word for word scripts to use at work. If you already have a job, it's a no brainer to negotiate for a raise, but it takes careful planning. You don't just kick down your boss's door and say, give me more money. There's an orchestration to it. Before asking for a raise, you need to establish what it Takes to to be a top performer, you need to set expectations with your boss and then you need to exceed those. My recommendation is to do this six months before your review and you can use this email script to set up a meeting with your boss. In that first meeting with your boss, you want to ask them what does it take to be a top performer in this role? I really want to exceed expectations, but I want to get clear what would it take and push them for specifics. You ideally want to walk out of there with three specific things that you can drive that will mean you are a top performer. And of course you say, look, if I'm able to do all these things in the next six months, I'd love to discuss a compensation adjustment. But for now let me just focus on doing these things. Bosses love this because no one walks into their office and says, hey, what would it take to exceed expectations to be a top performer in this role? What would it take for me to make your life easier? Alright, you walk out of that meeting, always send your boss an email with a recap of the meeting notes and then you start tracking everything you do. Now this is the hard part. You actually need to exceed expectations. You want to quantify those results, you want to hit those numbers. You want to send a weekly or bi weekly update. Here's what we discussed, here's where I am, here's a current status. Make sure you're communicating your results and asking what you could do better on. If you want to raise, remember you actually need to be a top performer. You don't get a raise for just breathing oxygen. You need to be good. And once you are consistently bringing those great results, mention to your boss after a few months you'd like to have another meeting. And at this meeting you'd like to discuss your performance and your compensation. Now here's a pro tip. Role play your job negotiation with a couple of friends who have business experience so you can get feedback on your performance. Or of course you can just see how it's done in our salary negotiation program where I actually role play with people in different situations and you can see how to become a highly effective negotiator. Then it's time for the negotiation meeting. This is the culmination of all your preparation and hard work. Make your meeting successful by coming prepared. You're with your current salary, competitive salaries from sites like glassdoor, payscale and salary.com, your list of accomplishments and be ready to discuss fair compensation. Number two, look for a better paying job. If you want to find a new job, click the link in the description that will take you to our free find your dream job program. If your existing company doesn't offer growth potential, I want you to consider looking for a better paying job during the hiring process. You have more leverage than you ever will to negotiate your salary. And remember that no matter what you see people Talking about on TikTok, it is an amazing economy. You have the opportunity to significantly uplevel your compensation, your responsibilities, everything you're doing at work. So please remember, just do not simply absorb all the boo hoo. The economy is in a terrible place. The economy is incredibly strong. You need to leverage that. And number three, make money on the side. When you embrace the idea that you can earn more, that you're not simply limited to what some company is currently giving you, then you'll discover, oh my gosh. You already possess a lot of skills that other people would pay for and you never even realized it. For example, if you know how to train dogs, people will pay you for that. You know how to do excel, people will pay you for that. There are lots of skills that my students have used to earn more money while working full time jobs and they did it on the side and they didn't even realize that people would pay them. If you're interested in making money on the side, but you aren't sure where to start, click the find your first profitable business idea link in the description and from there you're going to download 30 different successful business ideas that that my students have used to launch their own businesses. Use those ideas to inspire you. You'll also get access to an exercise where you'll develop at least 20 original ideas that you can turn into a profitable business. All right, if you follow these five steps, you'll be on your way to finally achieving your financial goals and living a rich life this year. Remember, this annual financial checklist isn't just a one time thing. Make it an annual tradition to reassess and keep your financial goals on track. Go ahead and put it in your calendar right now. And here's to a richer and more fulfilling year. Remember to subscribe so you don't miss out on any of my new money videos. And check out this video popping up on screen right now to watch more.