The Rachel Cruze Show - Expert Tips to Become Financially Smarter in the New Year

Episode Date: December 25, 2023

“The best way to spread Christmas cheer . . .” is quoting our favorite Christmas movies and taking money lessons from them. (Everyone does this, right? Is it just me?) Plus, we’ll talk budgeting tips and ideas that will get you fired up to make 2024 your best year yet. Start working these expert tips today and you’ll benefit from them all year long.   What you get in this episode: ·     Money Lessons From My Favorite Christmas Movies ·     5 Budget Reset Habits to Help You Win in 2024 ·     How to Become Financially Smarter Than 40% of People   Helpful Resources:  ·     Start budgeting for free with EveryDollar. ·     Get Tapple at Walmart or wherever you buy board games. ·     Learn more about Christian Healthcare Ministries. Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries and Op Games.   Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy-policy Learn more about your ad choices. Visit megaphone.fm/adchoices

I recently came across a viral video claiming that 40% of the world is financially illiterates. Today, I'm sharing six ways to become financially smarter. And if you can commit to doing even just a few of these six things in the next coming year, you'll be well on your way to winning with money. Hey, you guys, welcome to this episode of a very Merry Christmas, Rachel Cruz Show podcast. I'm so glad that you're here on this Christmas. Oh, it's just the best, you guys, I hope you're having a great time with your friends and your family. Oh, I mean, it just is the most wonderful time of the year. So listen, New Year's is right around the corner,

and so I thought it would be fun to give you some tips on how to become financially smarter in 2024. I'll walk through some ways to feel more in control of your money and simply understand money better. Then I'll go over five budget reset habits to help you win with money next year. But first, in the spirit of Christmas, I thought it would be fun to talk through some my favorite money lessons from my favorite Christmas movies. Hope you enjoy. All right, my first favorite Christmas movie, probably of all time, is Christmas vacation. Oh my gosh. I love this one.

This is one of these movies. I think it just gets funnier with time. Like, the more life you live and the more life experiences you have with family and kids and stuff, it just makes Clark Griswold near and dear to my heart. So one of the lessons, though, that we all, could learn from Christmas vacation is to never spend your holiday bonus before you have it. Remember old Clark? He was so mentally prepared to give the family a pool. He dreamed about it, saw it in the backyard. And instead of getting money for a pool, he ended up getting jelly of the month club instead. Clark, that's the gift that keeps on giving the whole year. So sad. Cousin Eddie came to the rescue, though, so everything was fine. But it is amazing, especially if you're

working on a budget and you're expecting something, you need to make sure you actually get the money. Like, it actually hits your accounts. And that's what you're budgeting off of. And I think it's hard, especially if you're on commission, because this happened to me, that some months are like, oh my gosh, it's going to be a great month. And me, I've already spent the money in my head. I know exactly what I'm going to do with it. And then you end up getting, yeah, the email with your commission. You're like, oh, yeah, definitely not what it was going to be what I thought. So again, make sure not to spend money until you actually have the money. And that's one reason I love every because it helps us stay on budget.

All right, the next money lesson is from Elf. Bye, buddy. Hope you find your dad. Thanks, Mr. Norwal. I think Elf has topped everyone's favorite movie list when it comes to Christmas movies because Buddy the Elf, he's just so wonderful and so lovable, and it's based in New York City, which I love to.

But if you remember, he bought his dad a lingerie set that was advertising them all for someone special. And he lifts it up and there's like feathers and stuff. It's so funny. So great. Buddy's heart was such in the right place. But I think there's a couple lessons we can learn here. Number one, don't fall for the holiday advertising. They're going to make you feel like you need it and you want it. Everyone's going to love it. And you see it at them all and you think, oh, absolutely. So don't fall for that. And number two, make sure you're not just wasting your money on a gift for somebody that you know they're probably not going to use or don't even want.

It is amazing how much giving is part of the season, which is so important, right? Your generosity and all of that is so huge. You don't want that to go to waste. So make sure what you're actually buying the person you think is actually going to use and like. And so it's amazing how sometimes we can just go and get something real quick and not just do it just to do it. But put some thought into it. And that's going to honestly make your gift go further. All right. The third money lesson comes from another classic Home Alone, Lost in New York, specifically. So I love the scene when he checks in at the Plaza Hotel and they do. take out the credit card charger. I don't even know what it is. And it's like chunk, chunk. And you can hear

it and see it. And then later, when they like go and like figure out the numbers of the credit card and it says, you know, like fraud, like it's been stolen. So all that to say, listen, the credit card we see everywhere, even in the movie. But make sure that you're not spending on your credit card. And also make sure when you're using your debit card that you don't go into the red, because this can be very tricky. A lot of people pay a lot in overdraft fees. So make sure that you are staying within the money you have in your account. Again, this is one reason I love every dollar because you can track your transactions.

You can see how much is in your checking account because nobody wants to regret all their holiday spending in January when a massive bill comes in the mail from the credit card company. So nicks the credit cards. And if you use a debit card, which is what I want you to do, make sure you don't overdraft on it. All right. The fourth money lesson comes from the Santa Claus. a sweet movie, and that is to not over-commit this Christmas. Don't put a lot of stress on yourself just because it's what everyone does.

If you remember at the beginning of the movie, Tim Allen's character tries to make a fancy Christmas dinner and he ends up burning it, catching on fire. It's done. I know he was trying to do a really great thing for his son and create great memories, but sometimes if you just don't know what you're doing, it creates a bigger mess. To take the stress out, do what you can, commit to what you can, leave some marries. in your schedule and in your budget to actually enjoy the season. All right, the fifth money lesson comes from The Grinch.

So I know this may sound a little cliche, but it's true, you guys, don't be selfish. Christmas is really about the people you are spending your time with, and the who's even proved this at the end when they're all holding hands and singing. And they love all the gifts and the festivities that come along with Christmas, but they also know what truly matters. And remember, their great example inspired the Grinch. for the better. So this is a great reminder for us this season to remember what it's all about. And your example is big for the people in your life. They're watching you. So there's going to be a lot

of hustle and bustle and stress and overspending, but you don't have to have that mindset. Just invest in the people that you love, cherish those memories with them because that is what is priceless. So y'all, it's going to be a great Christmas. I love today. It's such a, it's probably my favorite holiday. It really is. I love it so much. So I'm curious what your favorite Christmas movie is. So leave it in the comment. because right now, let's be honest, I'm probably at home watching a Christmas movie with my family because it's one thing that we love to do. So I'm wishing you and yours a joyful, peaceful Christmas today, and I cannot wait to see what next year brings for you and your money. I want to talk about

five budget reset habits that's going to help you win with your money in 2024. Can you believe you're saying it? It's almost here. So whether you've been budgeting for years or you just decided to take control of your money, These are really small things that anyone can do to start off the year that can make a huge difference in the long run. All right, the first budget reset tip is to look back at this past year and flag areas where you've overspent. So I want you to kind of just look back maybe at your bank statements or if you have the every dollar budget, you can do this within the app. But go back and look and say, okay, wow, we, I thought we would spend this on food. but we end up spending this, or maybe gas for your car, or maybe miscellaneous things, or Amazon. Like, whatever is happening that you're like, wow, we really spent way more than what we wanted

or expected flagged those areas and just think, okay, we're going to get more control over those areas, have some boundaries coming up in 2024 around these specific areas. The second budget reset habit is to eliminate categories in your budget that may not be needed or even taking up unnecessary space. It's so interesting how you can keep a budget once a month. We always say to go through the line items, but sometimes these things stick around. Like I remember for subscriptions,

we had our subscription line item, and it was a large amount of money in it because I think we had like our drop box renew and a couple of like bigger items within our subscriptions. But the next month, that didn't happen. That didn't happen. But we kept keeping that there. And I'm like, why are we doing that?

So like you can lower that. Or maybe there's an entire line item in there. that you don't need. Or maybe you want to adjust your car fund because now it's out of the warranty coverage period. So again, looking at all of your budget categories, the amounts you have in them that go month to month, or even categories overall that you can take out and adjust will really help. The third budget reset habit is to do some sinking fund planning for next year. So ask yourself if there's any larger necessary expenses that are coming up. So things like, are you going to buy a car this year. Do you have a home repair that you're anticipating? Or maybe your annual income has gone

up slightly and you want to put some of that new margin towards something like a vacation. So whatever it is, sinking funds are like magic because you slowly put money in each paycheck at a time. And then when you get to the time that you're looking to use the funds, it's all there to pull from, which is just absolutely wonderful. All right, the fourth budget reset habit is to build in time every day to track your transactions. So this is a habit that's really powerful and it's really simple. And honestly, the easiest way to do this is to use our app every dollar and get the premium version. So it attaches to your bank account. And then all of your expenses from your checking account drop into that app. And then you click on it and you drag and drop all the transactions.

And this is great because you have full control over how much cash is going to all the different financial priorities in your life. You're able to set your budget. And again, track. exactly where everything is going. And so keeping control over that is really helpful. Now, the fifth budget reset habit is to reevaluate your subscriptions. So 12 months is a long time to be spending money on subscriptions. And if you don't need a subscription, maybe you cancel it and save some money. So go through, look through all of your streaming services, vitamin subscriptions, gym memberships. And in it you're not using go ahead and cut out. Or maybe you're paying for four different streaming services. And you can go down to two, the show.

year because you're really not using the other one. So I can guarantee that things like this will immediately make a difference when you cut them out and you actually do it. You challenge yourself to make changes and it is huge. So give it a try. All right, now let's talk about the most important overall takeaway when it comes to starting off the new year on the right foot financially. The number one thing that I want you to remember is to not let the holidays throw off your entire year. So it's so easy to go over during Christmas time, which again, we've all been there. But sometimes no matter how intentional you are, how strict you are with your budget, things are going to happen. You are human. So give yourself some grace. As we enter into January, you may be looking back and thinking,

why did I do that? Why did we spend it on that? Oh my gosh, my gosh. Give yourself some grace. Take it one day at a time. Regardless of how 2023 wrapped up, do your best to start off on the right foot in 24. And if you need a tool to help you, especially when it comes to budgeting, make sure to check out every dollar. This is the best budgeting app on the planet. It has helped me. My husband's my husband's, and I use it together, and it's wonderful. So I recently came across a viral video claiming that 40% of the world is financially illiterate. And apparently this lack of financial literacy costs the average adult approximately,

are you ready for this? $10,000 in 2022. Yeah, not good. And I don't want this to be the case for you or for anyone. So today I'm sharing six ways to become financially smarter than 40% of the population. And if you can commit to doing even just a few of these six things in the next coming year, you'll be way ahead of the curve and well on your way to winning with money. So the first way to become financially literate is to implement a zero-based budgets.

You guys, we talk about budgeting a lot on here, but you have to understand that budgeting is the foundation when it comes to winning with money. So a zero-based budget just means your income for the month, minus all of your expenses, including giving and saving, should equal zero. So every dollar coming in is assigned to a category. And we talk about this being so specific to your income and to your life because your expenses is your life. It's what you spend money on. And you want every dollar, every single dollar of your income to be going to something to have a specific job when it comes to your spending. Because you want to spend on purpose. And what happens

is you go through the month, you get paid and you look up and you wait on the next paycheck to get paid, and go through the month, and you just keep living in that cycle, and you look up a year, two years, ten years down the road thinking, where did all my income go? What did I spend it on? But when you're budgeting, you know what to do. And if you've not downloaded every dollar our budgeting app, make sure to do that because it's going to help you walk through budgeting on a really easy basis, and it's amazing. My second tip for becoming financially smart is to consume financial news regularly and critically. So listen, I don't want you like in the news cycle 24-7, because I just don't feel like that's good really for anyone.

But I do want you to be aware of like, hey, kind of what's going on in the market overall? What's going on with inflation? How about the housing market? Just to get an overall picture of what the world is doing financially. Because not only is this going to help you possibly make decisions later on in life if you have big decisions coming up. But even in conversation with people, when they're freaking out about something, you have knowledge to be like, okay, yeah, I saw the market.

It was a little bit down last year. but I also knew it was a better year than in here. And you can start to pinpoint knowledge and facts when it comes to money. So, again, I don't want scare tactics to go on because, again, depending on the news source that you're reading or watching, fear is a big part of what keeps the news going. And when I talk about the government or the economy, that can like really get you in a spiral. So stay focused, be aware, but just bring in some of your own personal experience and context to all the headlines. know that the sky isn't falling, but also have some knowledge to put around you on what's going on in the world.

The third way to become financially literate is to become wise with your investment decisions. So just like we talked about, there is changes in the economy constantly. But if you stick to a proven investment strategy plan, then you can look back and say, okay, historically, here is what has happened. And I can know going forward, I can depend on that history. I think that's really big because people's investment strategies, sometimes can change depending on like what is cool right now. Like what's the new hip thing?

What's the thing that's going to make everybody rich? And people just go all in on this stuff that doesn't have a long-term track record. They go in with not a lot of knowledge because it may be a new thing. So listen, to have peace of mind, know what your investments are, understand, okay, what a mutual fund is. That's what we teach at Ramsey to not go into single stocks, but to get a mutual fund that has 90 to 200 stocks in a mutual fund. diversify. Your money is spread around when it comes to that stuff. And you're able to look back on the

history of the market and say, okay, what has happened from the beginning of the market to now? And you can, again, have that data to help you. So when it comes to investing, it can be really complicated. So I'm going to leave a link in the description so you can connect with a smart investor pro and get started right away when it comes to investing. All right, my fourth tip for becoming financially smart is to consume content from experts you trust. And the good news is that you are why. watching or listening to this episode of my show. So you're kind of doing that, right? So it is digging in and understanding, okay, what are people saying about this topic? Whether it's in books or podcasts or YouTube channels, make sure that you have people that you trust when it comes to money and listening

to them, listening to their tips, their experiences. I think it's really big. So yes, we can consume the news and what is going on in the world out there. But also being able to have practical people in your life that you may not know and you're like BFFs with, right? But people that live and breathe this content all the time, they're able to deliver to you ways to think about your money. I think it's really important. So I personally love Jade Warshaw, George Camel, Dave Ramsey. So there's a lot of money experts out there.

But if you are really new to all of this, I would recommend grabbing the total money makeover book because it's a great place to start. All right. My fifth tip is to research where you put your savings to make sure you're getting the most of your money. So whether you're saving for an emergency fund, or a down payment on a house, it's important to know which kinds of savings accounts can passively earn you extra money with interest without the risk of losing money.

So we always talk about things like high-yield savings accounts or money market accounts to put money in that is for short-term savings, so five years or less. So again, your emergency fund, this is a great place for it. Again, down payment for a house. If you're saving up for a big vacation, even, that's in like two years. So any amount of money that you have, it's a good size. I would recommend looking into, again, a money market account or a high-yield savings account. So these will give you better interest rates and you'll be able to earn a little bit more on your money,

even though they're not investments, than just sitting in a checking account or a traditional savings account. So just understanding your options when it comes to savings is really big. Even some Vanguard accounts are great. You can look into index funds. Again, you could be the one in charge of that, putting some money in. That's now more investing, putting it into the market and looking at index funds, but another great place to check out as well. And finally, the sixth way to become financially smarter than most people is to know your personal money tendencies.

So no matter where you stand financially, everyone has unique habits when it comes to spending money and saving money. So knowing your natural bend is really a first step in understanding how to take control of your money and why you do the things that you do with money. Because if you're going along and you're forcing yourself to try to be someone you're not in this process, it can be really daunting and exactly. I am a spender at heart, but I have had to learn to save. So yes, you will understand, okay, I have to learn maybe different ways to handle money. There will be things that are uncomfortable. But overall, I can celebrate the fact that I'm a spender by having a budget and knowing I can spend money freely, permission to spend.

That is a budget. So again, understanding how you're wired is really key. And if you're married, this is a really important conversation to have with your spouse, so that you two together can be in it and say, hey, you bring things to the table, you bring different things at the table. Let's again together understand how this works. Oh, so you guys, hopefully you will be smarter than maybe 40% of the people out there

and I believe in those 40%. I believe we all can be wise when it comes to our money. So listen, you guys, this could have been a really tough year for you. I think that a lot of people face a lot of challenges when it comes to money and even life. But listen, we are starting a new year and I love it because there's just energy around change and just know that you can change your old habits.

You can create new habits and new ways of looking at your money and handling your money and you can see real progress. So listen, if you love this podcast, if you would leave a review, tell your friends and your family about it. It is always so helpful to spread the word. I'm so thankful for you guys. And again, I hope you have a very Merry Christmas. And remember to take control of your money

and create a life you love.