Ramit SethiRamit Sethi: The No-BS Guide to Living a Rich Life

You Can Spend 25% of Your Pay, Guilt Free

16 Dec 2025 · 1 min

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Ramit Sethi defines "guilt-free" or "fun" money as the portion of take-home pay remaining after paying fixed costs and saving/investing, and recommends allocating roughly 20–35% of take-home pay for that category (he commonly cites 25% as an example). He lists examples of guilt-free purchases (restaurants, bars, taxis, movies, vacations, clothes, accessories) and emphasizes that once other targets are met, this portion can be spent without guilt.

Questions this video answers

20–35% of take-home pay (commonly cited example: 25%).

The money left after paying fixed costs and saving and investing.

Restaurants, bars, taxis, movies, vacations, clothes, accessories.

Chapters

After paying all of your fixed costs and saving and investing, what you're left with is the fun money or what I call guilt free spending. Now, depending on how you've structured your other categories, a good guideline here is to use 20 to 35% of your take home pay for guilt free spending money. That's a lot. When I tell people I think, whoa, that's 25% of my take home pay, I can spend guilt free. Yes, as long as you hit those other numbers, you can do whatever you want. Guilt free money here covers things like restaurants, bars, taxis, movies, vacation clothes, accessories, whatever you want.