Ramit Sethi: Follow This Paycheck Routine To Get Richer in 2025
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Jennifer Taylor
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Jenna Klaverweiden
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It’s time to automate your paycheck. Ramit Sethi, a personal finance expert, recently shared a video on YouTube outlining his top tips to automate your financial goals.
You may already have a few payments automatically deducted from your checking account, but his paycheck routine takes it to the next level. Keep reading to learn how to set your own paycheck routine up so you can achieve greater wealth in 2025.
Connect the Right Accounts
“Before you set up your paycheck routine, you need to first make sure that the right accounts are linked together,” Sethi said.
He said this is important because when your accounts flow together, you can work toward your financial goals without having to rely on yourself to manually transfer the money.
When you log in to your accounts, he said you’ll find something called “link accounts, “transfer,” “set up payments” or something similar. You’ll want to connect your checking account to your retirement savings accounts, investment accounts, savings account, credit card and any other bills that can’t be paid using a credit card, he explained.
Finally, for bills you’ve been paying with your checking account, he said to connect your credit card. For bills that can’t be paid with a credit card, he said to log in to your checking account and set up automatic bill pay.
Create Your Automatic Paycheck Routine
Once your accounts are connected, you’ll want to work on creating your automatic paycheck routine.
“Your paycheck routine is how you start saving for your next vacation, investing for retirement and paying your bills all automatically,” Sethi said. “No stress, no guilt, no worrying about missing another payment.”
He said to get all of your bills on the same schedule, as having automatic transfers at random times in the month will create more work for you. If the due dates don’t currently align, he recommended requesting the desired changes from the company.
When you set up your paycheck routine the first time, Sethi recommended having a buffer in your checking account of $500. Having that, he said, can help if an issue occurs with a transfer. Once you have your automatic paycheck routine set, you can cash it out.
And Sethi isn’t the only one to advocate for automating finances in this way. The Federal Deposit Insurance Corporation also touts the benefits of automatic savings transfers on its website.
The agency advised that scheduling regular automatic transfers to your savings account can help ensure you don’t accidentally spend it first. Even if you’re putting only a little bit of money aside each month, this amount — plus interest — can add up, the FDIC noted.
However, based on when you get your paycheck and how you’re paid, your paycheck routine could look different.
One Paycheck per Month
To explain how to set up a paycheck routine, Sethi used an example of a person who is paid $3,932.23 once per month. He highlighted all of the different individual expenses automatically taken from their checking account each month — like 3% of their take-home pay sent to their 401(k), 4% sent to their Roth IRA, 2% sent to an emergency fund and 3% sent to a beach vacation savings account.
He also noted that this person puts monthly expenses like groceries and their Netflix subscription on their credit card, making these costs easy to track, and other bills, like rent, were also scheduled to be automatically transferred from their checking account.
Two Paychecks per Month
If you’re paid bimonthly, this calls for a different paycheck routine. However, Sethi said it can be simple.
“Replicate the system on the 1st and the 15th with half the money each time,” he said. “For example, you’ll pay your bills with your first paycheck of the month, and then you’ll fund your savings and investing accounts with your second paycheck of the month.”
Irregular Income
If you’re a freelancer or otherwise paid on an irregular schedule, Sethi said you can still set up a paycheck routine.
“Save a buffer of money … to simulate getting paid once a month,” he said.
Figure out how much you need to survive on each month, and then create a savings goal totaling three months’ worth of this amount, Sethi said. Put that money into a savings account, which Sethi calls a “savings buffer,” and fund it during high-income months.
From there, Sethi said you can set up a paycheck routine in the same manner as someone with a consistent income.
Unexpected One-Time Income
If you receive a tax return or a bonus from work, Sethi said to strike a balance with saving and spending. Sethi said he always allocates a portion of this type of money to fun and sends the rest to his investment accounts.
He said you could try allocating 50% of the unexpected income to fun and 50% to investments, but the ideal division will be different for everyone.
“Handling unexpected one-time income like this is really fun and meaningful when you have a plan,” he said.
On his I Will Teach You to Be Rich website, Sethi shared more of his thoughts on guilt-free spending. Assuming you have the extra money – e.g., after paying your bills and automatically transferring money to savings and investments — he wrote that you can spend it however you want.
For example, he hired a personal stylist because he enjoys dressing fashionably, he said. This money is yours to do with as you wish, so he said not to let anyone tell you you’re wasting it if you’re spending it in a manner that’s meaningful to you.
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