The Rachel Cruze Show - 6 Financial Lessons That Have Changed My Life

Episode Date: October 11, 2024

💵 Start your free budget today. Download the EveryDollar app! Not once have I ever regretted choosing experiences over things. In this episode, find out why, plus five other financial lessons that have made all the difference for me.   Next Steps: ·      💸 Reach your money goals with Financial Peace University! Connect With Our Sponsors: ·      🏥 Learn more about Christian Healthcare Ministries. ·     🔒 Get 20% off when you join DeleteMe. Listen to More From Ramsey Network:  🍸 Smart Money Happy Hour 🎙️ The Ramsey Show   💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💰 George Kamel 💼 The Ken Coleman Show 📈 The EntreLeadership Podcast Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, hey, you guys. So listen, there is a lot of conflicting advice out there on what you should be doing with your money. But over the years, I have narrowed it down to a list, or really a mindset, if you will, of different shifts that really have significant difference when it comes to your money. So today, I'm sharing six of those financial lessons that have changed my life. And before we jump in, just a friendly reminder to hit that like or subscribe button if you love this content and you want to see more of it. And be sure to stick around to the end of the list. Let me know if there's any lessons that I've helped you that I didn't mention and put them in the comments. All right, here we go. Lesson number one, track your expenses.

Okay, so we talk about having a budget all the time because it really is one of the most important things that you can do. But listen, here's the deal. You can set a budget at the beginning of the month and then never come back to it, which is not going to help you when it comes to your money. Because, just because you have a number out there, but you don't know what you're spending in each category, your budget's not going to work. So tracking your expenses throughout the month. It can seem daunting. It may seem like a lot of work, but it's honestly one of the best ways to succeed with the budget.

And if you have not checked out every dollar our budgeting app, make sure to do that because with every dollar premium, you can actually attach your bank account to it so your transactions come right into the app, and you can drag and drop them per category to keep up with the budget. But whether you do that or you're just doing it on your own, make sure that you know what you're spending in each category so you can actually be successful when it comes to the budget.

All right, lesson number two is delayed gratification is key. Now, this applies to different things, things like sinking funds, you know, where you save a little bit each month for something that you're wanting. Maybe this is, you know, seeing a big purchase or something expensive that you want to buy, but you're pausing and waiting until maybe you have the money or maybe for your emotions to die down. You know, whatever it is, delaying gratification is really, really key. Because here's the deal. We see so much information, so much stuff, whether in our social media feeds or, you know,

even just around with our friends. And you may think, oh, I want that. I want that. I want that. But it's so easy for your emotion to get so heightened in that. And if you go and just pull the trigger on it, whether you have the money or not, you could be making a mistake when it comes to that purchase. So waiting and actually reevaluating maybe a week later to say, okay, do I really want that?

Because I even will do this and I'll just add the cart sometimes. and I'll just add a bunch of stuff and then, you know, a week later, go back to the website and half the stuff that I put in the card, I'm like, oh, I don't even like that anymore. But it was just this, like, feeling of buying. And if I had purchased it, it would have been in my closet thinking the same thing.

So let your emotion side down, delay that gratification, whether that's emotionally or actually saving up and paying for it in full. Lesson number three is what you see is never the whole picture. You guys, this is so huge. I mean, the famous comparison quote

is that comparison is the thief of joy. And I believe that so much. Because when you see something out there and you're like, oh, look, here they are. So happy this summer, splashing around with their family at the pool. Here they all are Christmas around the Christmas tree. That is so great. And you just see this like happy, healthy person on Instagram or on Facebook with their family. And you can immediately just think, oh my gosh.

I mean, they have, they have like the perfect life. Look at them. what the reality is, you guys, you have no idea what's going on behind the scenes. You really don't. And I think that's a really key thing to remember because everybody struggles, right? Everybody has moments of suffering. And we don't put those out on social media. I mean, I guess some people might. But for the most part, if the kid is screaming, I don't have time to get my phone to show you like, my kid is screaming and throwing a fit. No, I'm like in mom mode, right? So we don't see the 360 picture of everyone's life. We're seeing a snapshot that that person is choosing to put out into the world. So just remember that.

And maybe they are happy and healthy, and that's great too. So I have just learned that you have to celebrate people. If you see something and inside of you, it kind of flares up of like, oh, my gosh, they have a more exciting life than me or look at that thing that they have and I want it. I immediately go to like, good for them. Good for them. That is great. Whether it's a complete lie that they put out, but I'll never know the truth, right?

You just celebrate people and move on because the truth is you have a choice in your own life. And are you actually going to celebrate it? enjoy the life that you have presently. Or are you going to sit and watch everyone else's life and make assumptions about it, right? So being present in your own life, living with gratitude is so, so key. And that will help you beat the comparisons because a heart filled with gratitude, there is no room for comparisons and discontentments, right? When you are grateful for your life, it is huge, you guys. So remember, what you see is not always the whole picture. Lesson number four is your investing strategy should be boring. Listen, if there's something flashy and new,

and exciting when it comes to finances and you should put your money in this, it's usually going to be a gamble, okay? Because the truth is, proven foundational habits when it comes to investing, they're not going to be flashy and exciting. They're not new. So when we talk about funding, you know, 15% of your income into retirement, things like a Roth IRA. And a 401k, some people are like, oh my gosh, this are so boring. And they are. They really are. It's not exciting. It's not like crypto or like, oh my gosh, you can buy these, you know, Nike shoes and flip them for this profit. You should put all your investment into that or this cool, like, investing things in this property over here in this new part of town that all these people are putting money in.

Like, your 401k and Roth IRA are boring. They really are. But the truth is, they have a long track record. When you are investing and being smart about your investing, you're diversifying, and again, you're lowering your risk, you're not putting all your eggs in one baskets, and you're putting your money in something. Again, the market is one. I would say real estate, paid for real estate is another, but it's these places in life that you put your money that have proven track records.

And so they're not flashy, they're not sexy, they're not exciting, but they work. And when you are consistent in those, you're going to really get the payoff in the end. All right, lesson number five is I never regret spending my money on experiences. So Dr. Arthur Brooks, I would probably be quoting him a lot in the future

because what he said when it comes to spending money that actually will bring happiness, one of those is buying experiences with people that you love. And I thought, amen, hallelujah. Rachel's like, need your reaction. Was correct and backed up by science. Thank you. But enjoying experiences, you guys, again, with people that you love, it is so key. It does bring a level of joy and happiness.

And so stuff is never bad. I'm never going to tell you, like, oh, don't go buy that purse or don't buy that car. if you have the money and you want to buy, you know, things, that's okay. But the lie is when we wrap our identity and our happiness into stuff, it has shown now scientifically proven that it does not bring long-term happiness. But the memories and the experience of people you love, it does. So that is where I will spend money. I will spend money on a great vacation with my family, a great meal out with friends. Like, I mean, that's where I'm like, I want to put my money there more than ever in life, where I used to be a little consumer, y'all.

not going to lie back in the day, and I still do love shopping. But overall, I'm like, I would. I would rather put my money in something that I know we're going to experience. When Winston and I built our house and we moved in in 2018, was that when we moved in? No, 2019. We knew we wanted a pool eventually. Like, that was one thing for our family that I was like, I want to be the house that all the teenagers come to, probably out of like fear and control. But I'm like, I want to be the fun house. And having a pool is one of those places that attracts kids and teenagers. and all of it. And we've always said, we want to do this. We want to have this experience, but we weren't able. We couldn't afford to build one when we were building our house. So we waited,

but it's been five years and y'all, we have broken ground. We are on our way. So we did. We saved up for this dang pool, like, freaking cost more than probably all my kids' colleges combined. They're so expensive. But at the end of the day, it's going to be worth it. I know it is because we're going to use it and it's going to be fun. It's going to create the environment and the feeling in our household with what we want, right, this level of experience. So, I'm all about spending money on experiences because I really do think it brings a level of satisfaction and joy to your life. All right, lesson number six is to plan for the unexpected. You guys, stuff is going to happen in life.

It is. Life happens. No matter how much money you have, no matter how big the emergency fund is, unexpected things happen. And I feel like that's one of the weird things about getting older is you just hear more and more stories of people and things that in tragedies. honestly, that just happened in life that you just think, oh my gosh. So like the big things can happen and that you know can happen. So plan for those, right? The emergency fund is there.

Things even like life insurance and having a will, like being a grown-up in this, because unexpected things are going to happen. So taking care of your loved ones, I think is really important. Down to like the small things that suddenly our middle one wants to play basketball. We've never played basketball, but she wants to play basketball. It's like, okay. And it's a, you know, $125 fee. sign up. And you're like, okay, we didn't have that in the budget. So we have a miscellaneous category

kind of for our catchalls on things that just pop up throughout the month that we weren't expecting. And so, again, it can be something from very small and insignificant to something like really tragic. But I've just learned things are going to happen in life. So where you can put buffer and expect those things to a degree is really wise. Because again, it's not that it doesn't allow these things to happen and pop up because they will, but it just gives you some margin and some breathing room and some money to help you that buffer, which I think is really key. So here's the deal. Money tends to be one of these things in life that you really learn as you go.

And trust me, if you implement any of these lessons today, I really think it's going to help you when it comes to your money habits and your money mindsets. And if you want a full rundown of my financial strategy, which includes nine easy to understand money lessons that everyone should know, give FPU a try. Financial Peace University is our course around money that gives you everything from insurance to investing to budgeting to getting out of debt, gives you the information that you need when it comes to getting control of your money. And it hopefully will motivate you too to get on a plan and start actually making progress with your money. So be sure to share this episode with a friend who loves to try new money strategies.

As always, you guys, remember to take control of your money and create a life you love.