The 48 Laws of Money: spending.

Parts one and two were about how you think: the mindset you bring to money, and the patience to let it grow. This part is more down to earth. It's about the everyday decisions that happen between being paid and investing, which is where most people's money quietly disappears.

I'm a student, not a financial adviser, so this isn't a lecture. It's what I actually do, and why.

Not financial adviceThis is my own experience, not a recommendation. Everyone's situation is different, investments can fall as well as rise, and rules on accounts like ISAs can change. If you're making real financial decisions, speak to a qualified adviser.

01Law 4: avoid lifestyle inflation

When most people imagine lifestyle inflation, they picture someone getting a pay rise and buying a sports car or a wardrobe full of designer clothes. In practice it's far quieter than that, which is exactly why it catches people.

It looks like the £10 lunch replacing the meal deal. It looks like eating out on a Wednesday because that's just what you do now, or plans and dates that cost a bit more each time. None of these feels like a decision. You simply stop cutting back, stop checking what you spend, and stop holding yourself back, and because each change is small, you never notice the moment it happened.

The small things add up faster than you'd think. Swap a meal deal of around £4 for a £10 lunch on campus five days a week, and over a 30-week academic year that's about £900, gone on a habit you didn't choose.

Part of the reason it's so easy is that the extra money is new. Your first proper pay, from a placement or a part-time job, is exciting, and social media doesn't help. Your feed is full of people posing in designer clothes and at expensive restaurants, and it's easy to feel you should be spending to keep up, not because you want the things but because of how they make you look.

At university, I'd go further. Don't buy a car. You almost certainly don't need one, and it's one of the worst ways to spend money at your age: new cars commonly lose 40 to 60% of their value within three years [1], and the average comprehensive insurance quote for 17 to 20-year-olds is around £1,800 a year [2]. Skip the designer logos too. Good-quality clothes without the branding look classier and cost a fraction of the price. And there's no need for tables at clubs, bottles for show, or performing for anyone on social media. Everyone around you is in the same boat. Working weekends or a part-time job doesn't mean you need to prove you have more than the next person, because there's nobody to impress.

02Law 21: live below your means

The gap between what you earn and what you spend is what builds wealth. Everything else in this part is really about protecting that gap.

The simplest way I've found to do it is to decide what I spend each week at university, and keep it the same no matter how much my income goes up. That one rule is the other side of lifestyle inflation. If you earn more and spend the same, the difference doesn't disappear into lunches and nights out. It becomes savings, and then investments, and that's where your money starts making money of its own.

The rest is automated, so I never have to make the decision again. When money comes in, a set percentage goes to a high-interest savings account, a set percentage goes to my stocks and shares ISA, and only what I actually need, plus a bit of room for fun, lands in my current account. If you're saving for a first home, it's also worth looking at a Lifetime ISA. You can open one between 18 and 39, put in up to £4,000 a year, and the government adds a 25% bonus, but you lose 25% of anything you take out for reasons other than a first home or retirement [3]. The government plans to replace it with a new First Time Buyer ISA, possibly from 2028, although existing accounts are expected to carry on [4].

Day to day as a student, living below your means mostly comes down to what I've already said: not going out every night, not spending too much on drink, and not upgrading what you wear, where you eat or how expensive your dates are just because you can.

03Law 13: save more than you think you need

In part two I said money shouldn't sit still. The exception is your emergency fund.

Life is random, and you can't be over-prepared for the moment something goes badly wrong. If you're living pay cheque to pay cheque, or getting by at university on your Student Finance, one unexpected cost can push you into debt, damage your credit score and leave you with a weak foundation at exactly the point you should be building one. A buffer turns a crisis into an inconvenience.

The usual guidance in the UK is to hold three to six months of essential costs [5]. Keep it somewhere you can reach quickly, like an instant-access, high-interest savings account, so it's there when you need it and still earning while you don't. If you have expensive debt, such as a credit card or an overdraft you're paying interest on, it usually makes sense to clear that first [6].

04Law 41: spend on what truly matters

None of this means being stingy. There are things I'm happy to spend on without any guilt at all, and they have one thing in common: they pay me back, whether in money, health, skills or peace of mind.

The gym is the obvious one. I'd rather pay a bit more for a membership with a sauna, more space, or simply an environment that makes me want to go, because that's an investment in my body. I also spend a bit more than most people on my weekly food shop, because eating well is what fuels training, recovery and building muscle. Travel is another. Seeing the world gives you perspective and culture, makes you less naive, and gives you a lot more to talk about.

The same goes for anything that builds your skills or your business: courses and qualifications that could pay off for years (as long as they aren't scams), or the tools you build with. I pay for an AI tool I use to code, and I'd make the same argument for adverts, a domain name or a website builder. If you're comfortable spending £50 every weekend on a night out, or £100 on a date that might go nowhere, you can afford £100 on adverts, around £20 a month for a tool, or a Shopify subscription to start a business. It's the same money. One of them pays you back.

05Law 46: wealth requires sacrifice

Building wealth isn't easy, and it asks you to give things up. People talk a lot about balance, and balance matters, but if I'm honest, the people who go furthest often don't have much of it at the start.

For me, that has meant fewer nights out, sometimes a bit less sleep, using my time more carefully, and spending money on things that felt risky because that risk is what moves you forward. Mostly, it means spending less on the present so I can invest in a future I can't see yet. I've been asked whether it ever felt like too much, and the truthful answer is that it hasn't. I think that's because it never felt like losing something. It felt like the equivalent exchange I've written about before: giving something up now in return for something better later.

06Law 16: know the difference between wealth and riches

There's an old saying that money talks, but wealth whispers. Riches is what you show. Wealth is what you keep.

To me, money is a token. It's what lets me travel, look after my family, give back and see the world. It was never meant to be a number that looks good on a screen, or a collection of things that look good to other people. That's where showing off fits in, and it's the definition of riches: buying things to be seen with them.

Morgan Housel puts the trap well in The Psychology of Money. When you see someone in an expensive car, the only thing you actually know about their wealth is that they had the money for the car, and now they don't [7]. Every purchase made to be seen is money turned into a sign that says you used to have it. Wealth works the opposite way. It's built from the money you reinvest before you ever get the chance to flaunt it, which is exactly why it's invisible.

So yes, there will be people your age who look richer than you. They might drive a better car, wear a better watch, or buy the table every time you go out. I'd bet heavily that they aren't the ones who go furthest. The research backs this up. When Thomas Stanley and William Danko studied American millionaires for The Millionaire Next Door, they found that many lived in ordinary houses, drove used cars and spent well below their means [8].

You can't always tell who's truly wealthy, and that's rather the point. In my experience, wealthy people tend to be quieter about it. They don't need to buy things to prove anything, and they're often the ones helping other people make money, sharing what they know and pointing you in the right direction. Flaunting money usually comes from insecurity: needing other people to see it before it feels real. Someone who's secure in what they have has nothing to prove.

And true wealth is wider than money. It's money, but it's also good relationships and connections, work that fulfils you, and a healthy mind. When all of those come together, you don't need anyone to see it. You can feel it.

07How Ritual helps

08Questions

1. How car depreciation works: Kandoo
2. Car insurance price index: Confused.com, Q2 2026
3. Lifetime ISA: GOV.UK
4. HMRC confirms new ISA will replace Lifetime ISA for first-time buyers: AJ Bell
5. Emergency fund guide: NS&I
6. Saving money: National Debtline
7. The Psychology of Money, Morgan Housel (2020), chapter "Wealth is what you don't see"
8. The Millionaire Next Door, Thomas J. Stanley and William D. Danko (1996)

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