Old Money Rules That Are Keeping You Broke, According to Ramit Sethi
Written by
Angela Mae
Edited by
Zuri Anderson
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If you think you’re bad with money, you might want to ask yourself: Which money rules are you still following? Chances are, some of them might be outdated.
Ramit Sethi recently uploaded a video about the top financial advice that’s not only outdated but no longer works. Here are those rules and what might work better for you instead.
Skip the Cafes
You’ve probably heard you should stop buying your daily lattes if you’re trying to save money. A 16-ounce latte from Starbucks costs nearly $6, after all. If you buy one a day, five days a week, that’s around $130 a month or $1,560 a year.
The idea here is that you’ll put the money you would’ve spent in a high-yield savings account or invest it. But according to Sethi, this is one of those rules that came about when the cost of living — particularly things like housing and healthcare — weren’t as high as they are now. Saving that $1,560 might help, but it won’t make you rich.
Never Go Out To Eat
The cost of food away from home rose by 3.7% from September 2024 to September 2025, according to the Bureau of Labor Statistics.
In 2023, the average consumer spent $3,933 annually (or $328 monthly) on food away from home (including dining out, delivery and take-out services). That’s roughly a third of their annual food budget.
If you’ve been following the whole “never eat out” money rule, you might be saving some money. But as with cutting back on the daily cafes, skipping dining out altogether isn’t enough to make you wealthy.
Don’t Rent, Buy
Rent is just throwing away money — or is it? As with these other money rules, Sethi pointed out that this idea was written in a time when things were more affordable.
Take the cost of real estate. Houses cost around two to three times the average person’s income back in the 1960s and 1970s, as per the Federal Reserve Bank of Kansas City.
Today, the median sales price of homes sold in the U.S. is nearly $411,000, according to FRED data. Based on the latest Census data, the median household income is $83,730. This means homes cost nearly five times what people bring home.
Wages haven’t kept up with housing costs — or with inflation for that matter. Homeownership was comparably more affordable 50 years ago than it is today. So, while you might not be getting anything back from renting (in terms of things like equity), it might also be your only option in some cases.
Save, Don’t Spend
The old money rule of “save, don’t spend” also came about when the cost of living was more affordable. But as Sethi pointed out, times have changed. Now:
- Medical expenses can bankrupt a person.
- Jobs don’t often give pensions.
- Wages don’t keep up with inflation.
- Higher education is crazy expensive (and doesn’t guarantee a high-paying job).
Trying to follow a strict budget, cutting down on extraneous costs and saving every penny can help in some cases — like if you’re trying to build an emergency fund — but it won’t necessarily get your head above water.
Play Offense, Not Defense
If you’ve been following old money rules that no longer work, what can you do? According to Sethi, the best option is to play offense with your money rather than defense.
Playing defense means making decisions based solely on money, tracking every dollar, monitoring every spending category and feeling guilty about spending anything. But it’s harder to see the opportunities when you play defense.
Playing offense means focusing on the big wins. For example, you might negotiate a $20,000 a year raise or start a side gig that brings in $1,000 monthly. These will help you build wealth over time.
Ask yourself which old money rules you still follow — perhaps ones from childhood — and whether they still work. The world has changed, so it may be time to modernize how you handle your finances.
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