The Rachel Cruze Show - Fool-Proof Ways to Get Your Spending In Check

Episode Date: July 8, 2024

💵 Start your free budget today. Download the EveryDollar app! From costly marketing gimmicks and unnecessary impulse buys to hidden budgeting mistakes—in this episode, I'll share smart "spaving" tips, effective budgeting advice, and what's truly worth your money. In This Episode: ·      Does Spending Money to Save Money Actually Work? ·      Why Do We Buy Things We Don’t Need? ·      4 Ways You’re Ruining Your Budget (Without Realizing It) Next Steps ·      🎥 Watch my video where I reveal the money trap I fell into and share ways to avoid it. ·      🛍️ Check out my video on the 7 things I won’t be buying this year. ·      💵 Go to my video about 5 lessons I’ve learned from budgeting. ·      💸 Learn to win with money by enrolling in Financial Peace University.   Offers From Today's Sponsors ·      🏥 Learn more about Christian Healthcare Ministries. ·      🧩 Use code Rachel20 for 20% off your TruPlay annual subscription. Listen to More From Ramsey Network 🍸 Smart Money Happy Hour 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

spaving is a very new buzzword, and what that just basically means is spending to save. But let's talk about which versions of spaving are actually helpful, and which ones are just trying to get you to spend more money on things that you don't really need. Hey, you guys, welcome to this episode of the Rachel Cruise Show podcast. I'm so glad that you're here. So in this episode, I'm going to chat about why we buy things that we think we're going to use, but we don't always. And then we'll go through ways. that you might be ruining your budgets. But first, let's talk through

whether spending to save actually works. Take a listen. So at this point, I feel like the majority of my content starts with there's a new trending word on social media. But hey, that's the nature of the internet these days. You know, we're just all trying to keep up. Keep up with Gen Z. But the term spaving is a very new buzzword.

And what that just basically means is spending to save. So if you're not familiar with this concept, it's not necessarily a bad thing. But if you are familiar, then you know this is the classic marketing tactic. That, again, it's kind of a trends that most of us we know pretty well. Because the point of spaving, it comes in a lot of different forms. It comes online, in-person shopping. But let's talk about which versions of spaving are actually helpful and which ones are just gimmicks trying to get you to spend more money on things that you don't really need.

So let's dive into all of that today and stick around to the ends because I'm going to be sharing my one spaving hack that I can always get behind. It's my favorite. All right, first, let's talk through the most basic example of spending money to save money. And this is something that I bet almost all of us have considered when it comes to online shopping. Because when you're online, this is like, it's major. Because the number one thing that always gets us to spend more is free shipping. You know, just picture it with me. You run out of your favorite face wash, you go online to order it on the brand's website, they're running a deal, you look in your cart, a checkout, and there's a banner that says

free shipping if you spend $40 or more. And of course, your face wash comes out to $31.84 after tax, you're like, oh my God, I'm so close to reaching that $40 minimum to save on shipping. And you're like, okay, well, I actually have been wanting to try the face serum from this company, too, and I could add that to my cart and get the face. free shipping, famous last words, right? 20 minutes later, you're staring at your card again, and the total is now reached $95 because you've added in a body lotion, another serum, all these things, and then you're like,

but I'm getting free shipping, because, you know, they're all technically products that, you know, maybe you want to use one day. So that is what happens, you guys. I'm saying it. It is true. We see the free shipping. We end up spending more because usually nothing on that site is enough to, like, really justify the $7 that you're going to spend, so you end up spending like $20 or $30 or $40.

And honestly, it's not necessarily a bad thing, okay, if you're going to spend $100 on products because it's your money. And if you have it and it's in the budget, that's great. But it is a bad thing when you're impulse spending. And again, you see the budget and you're like, eh, I guess I can figure this out later. And it's a second thought, right? It's you're not being proactive. You're not being intentional with it. Now, another example of this spend to save more trend is buying up more than you need. just because it's on sale. And this is where our scarcity mindset can really kick in.

And we start to fear the idea of like a missed opportunity, right? Like you're at Costco and you're like, oh my gosh, we need paper towels. And there's like a deal, you know, 50% off. And you're like, oh, my gosh, I need new ones. And, you know, we have to have a lot of these. You just end up buying more and more and more knowing like we're going to use them eventually, but they're on sale this week. So, I mean, I'm going to regret not buying them.

Might as well just get it now. And then it just gets completely out of control, right? And again, you're just, you see that sale, and you just add more and add more and add more. And that happens. But listen, you shouldn't have to scheme and strategize around just basic home supplies because if it throws off your whole budget, no bueno, no good. Now, listen, I love a good sale as much as the next person, but spending the least amount of money as possible on every single item that you purchase is not a sustainable goal.

So instead, let's just keep it simple. When you need something, find the money in your budget to buy it. And when you don't, find the power to say no. It's that easy. Now, a third example of how spending to save more shows up is advanced sales. So if you go to the same salon and get your nails done once a month, each appointment costs $40. So maybe they're running a deal for $30 per appointment and you have to pay for 10 sessions at once. Now, again, this sounds tempting because technically, yes, you are saving $10 a session,

but the truth is you're losing $300 from your budget all at once in that moment. So the question is, are you prepared for that? And this would also mean that you're locked in for the next 10 months. So in order to get your money's worth, you have to use up all 10 sessions, and a lot can happen in a year. You never know. You can move across town. There could be a new salon that opens that's more convenient to you.

your favorite nail artist leaves, something happens, you never know, but they have your $300. And there are countless factors that could make your investments not worth it in the end. So the bottom line is companies will do anything to get more of your money, even if that looks like they're serving you with really good intentions. The truth is it's always a strategy behind the scenes. And it's the same reason gift cards exist. I mean, how many gift cards are just in your wallet right now, you know, forgotten about them, you never use them. businesses know this and they know the likelihood that you're actually not going to take advantage of a gift card that's been shown. And so they would rather keep your $300 in their bank, right,

and in their store, and then you forget to use it. That's what happens. Starbucks app, yeah, there's like a whole conspiracy that Starbucks is really a bank because people prepay for their drinks and keep it on the app, but they've taken your money already and they're have all this money that no one's spending and sometimes you forget about it. It's just crazy, crazy. All right, before I share the one type of spend more to save more that I can get behind. Let me just level with you for a second, though, okay? Real quick. I'm not saying taking advantage of a sale is always a bad thing.

I'm not saying that all of your favorite stores and brands are just out to get you. All I'm saying is that it's important to be aware that there has been a process behind deals and sales that are classic marketing schemes that companies know about and they know that you are more likely to fall for it. So it's like unsubscribing from email lists and cutting streaming services. Whatever you choose to do when it comes to your budget and spending your own money, just be mindful about it. Intentionality is really crucial when it comes to winning with money. So ask yourself, where do I need to pull back in certain areas to create margin in my budgets? You know, it's always a give and take in this, okay?

So if you're going to buy the item and it happened to be on sale, it's a win-win. But if you're buying it just because it's on sale, that's where spaving can really come in. All right, there is the one spaving hack that really gets my approval, and it's one that it is just, it's great. Now, some stores, when they have buy one, get one free, some stores like Publix, they actually, if you just buy one of the items, it's 50% off. Unbelievable. So you don't feel like, oh, I have to buy two tubs of yogurt. I can just buy the one, and it's half off. So that is one that we can really get behind.

That is in Tennessee, the buy one, get one free, 50% off at Publix, but some states that don't have food tax like Florida, it's a little bit different. So make sure you check it. But y'all, again, you can take advantage of it, and it's great and wonderful. So thank you, Publix. All right, now the truth is that even if you're a pro on avoiding sales gimmicks, the most effective way to be wise with your money is to have a budget. Because, again, it gives you such control. You're able to see what it's going on. So it helps you say, hey, do I have enough money to get maybe the second item because it's 50% off.

for buy one, get one free, whatever it is, your budget really is able to tell you. So budgeting will always be my number one personal finance tip. So think about this with me for just a second. What's the last thing that you bought that you really convinced yourself you were going to use and you didn't? Well, for me, it was an entire array of running gear for a new hobby that I thought I was going to do. And spoiler alerts, it didn't happen. And yes, that was money wasted. Lesson learns.

But listen, I had high hopes, you know, my intention was good. But hey, we are all going to do better. We can. We can do this, you guys. So we're going to talk about that a little bit later. But I also want to talk about the why behind this pattern and why so many of us struggle with that. So why do we buy things that we don't need?

What's really the root issue and how do we fix it? Plus, stick around to hear the one purchase that is always worth the money no matter your current financial situation. All right, I started thinking about this topic when I came across another video of someone with giant piles of books around their house. And it really made me laugh because, I mean, she had like hundreds of books. And she said she either had never read or no longer needed them. And my thought was, well, that's kind of ridiculous.

But then also very relatable because how and why do we accumulate so much stuff only to have a pile of it to clean out and donate months or even years later. Listen, contentment is part of it. And comparison culture and contentment, They're like BFF. But when you boil it down even further, there's something called aspirational spending that I think is really interesting. And this is when you aspire to do something. It means that you want to do it.

You're hopeful that you will do it, but you haven't actually done it. So you have not undergone the necessary transformations of that goal yet. And it doesn't mean that you can't or you won't get there eventually, but it has not become a reality. For me, I get this right. Sometimes I get this wrong. I mean, I've started doing cold plunges. I may have told you all about this on the show already. Listen, I'm on Trent, and it was miserable at first. It still is miserable. It's very difficult. But there's a lot of benefits, and there's something for me mentally to be like, I can do this. I can do this. Now, Winston went and bought a legit cold plunge. We've had it for probably about five weeks now. But we've been doing this for over six months, and we actually started doing it. And we actually started doing it. our bathtub and we'd fill our bathtub up with ice. And once we did that for like four or five months, we're like, okay, this becomes a routine. This is something that we are actually going to stick with. Then we're like, okay, now let's save up and invest in like a really nice one because we know that we're going to do it, right? The habit is already established. Now, with aspirational

spending, it's the opposite. Okay, and I'm guilty of this too. A while back, I convinced myself, you know, that I was going to be a runner, right? I get in these health moments. in life. And again, the cold plunge, that was good. Like, let's just be honest. I didn't, like, splurts for the big, nice one and then, like, hope I did it, right? We did that the right order. This whole running thing. It was the opposite order. Opposite order. I woke up one day, and I was like, I'm going to run a marathon before I turn 30. So this was, like, years and years ago. And I went to a store called Fleet Feet. I don't know. I think they have them, like, around the country, but they, like, watch how you run. They look at your arches, and you buy,

like, really nice shoes. I bought six pairs of expensive socks. I got some running short. I got some running shorts, a couple running tops. And I was like, I'm going to be a runner. But I hadn't run yet. I'd gotten all my stuff. And I remember, I was like, oh my gosh, okay, I have my schedule printed out. My friend, Christy Wright, she's a big runner. So she was like coach of me, called her Coach Christy and like did my first, you know, my first little run, and second and third. And then I had my first long run, which was a mile and a half. And I ran like a fourth of a mile. And I got there. and I thought, I hate this. Like, this is terrible.

I hate running. I'm not a runner. I actually don't want to do this. And I quit. And I walked back to my car. I didn't even run back to my car. I just walked back to my car. Got in and left.

And that was it. That was it. And I still have those tennis shoes. And I still see them. And I'm like, yeah, there they are. Lesson learned. Lesson learned. You know, sometimes you think,

if I just spend the money and have the stuff, I'm going to become that, right? But it doesn't always happen. Usually doesn't happen. So don't go and buy a bunch of high-end running gear or books or camping gear or whatever it may be to keep you thinking, oh, yeah, I'm going to go get all this and become that person. It doesn't happen. So when you spend on behalf of you that does not exist yet, you usually end up spending more on stuff you don't need. And again, you don't even know if you're going to end up using it all. So if you're consistently trying to fill a void with a new purchase that can only give you a temporary high, you're allowing yourself this wish list for the future, this dream that you have. And what's going to happen is going to actually dictate your finances and the presence. And that's not a great place to start.

So I would say, change yourself first, then save up the cash to enhance those hobbies and habits that you've already built up. and then it's great. But there's more to financial stability than just saying no and being patient. And it happens to be one of the aspirational purchases that I can actually get behind, and that is Financial Peace University. So if you're not familiar with FPU, it is nine lessons that walks through everything you need to know step by step on how to build wealth successfully the right way and get yourself in a position where you're out of debt and you have money saved.

and this has been around for over 30 years. It has helped millions of people, you guys, get out of debt and do all of this, and it's just great. Check that out. All right, if you know me at all, you know that I love T. Swift. So whether you're a fan or not,

I'm sure that you've heard her song a few years ago that everyone was singing, and it says, it's me, hi, I'm the problem, it's me. It's great. So great. I won't sing it for you, but you know what it is. So we've all been in a situation where we've thought to ourselves,

oh, no, is this my fault? sometimes it's hard to realize that you're the problem when it comes to your money. And I talk to people all the time who are working the baby steps and still feel like they're living paycheck to paycheck. So today I'm going to give us a little gentle, loving reality check and share a few ways that you might be ruining your budget without even realizing it. And stick around for number four because I'll also share my number one non-negotiable when it comes to budgeting.

So first, here's a little bit of backgrounds. I started thinking about this issue a few weeks ago when I was talking to a caller on the Ramsey show. And this guy called in for some advice when it came to his wife, because he said we started the Ramsey Baby Steps. And my wife has too many sinking funds. We don't have enough money to put money towards debt. I feel like we could free up some money. It was like this whole thing. So then we started asking, okay, well, what are the sinking funds for?

He's like, well, the kids, homeschool curriculum, birthday gifts. You know, there's some things for sporting events for our kids. and like some of it was like things that, yeah, you just have when you have kids in a family and life. So we were like, I think she's just planning for real life. So, and to help me, it was like, there's no way. I'm like, yeah, this is the first time you're budgeting. So now you're realizing, oh, my gosh, this is how much life costs.

And when you budget the right way, you will feel like, you know, oh, my gosh, a lot of my money is being used because you're overorganized, if you will, because you've given every dollar a name. Now, some people feel like, oh, wow, I can actually spend less because I was spending this amount, you know, and out to eat, and now I could shore that up. So in one part, budgeting feels like you got a raise. The other part, it's actually just showing you reality for the first time of how much you're actually spending. So now, let's talk about four specific ways that you might be ruining your budget without realizing it. Number one is not living in reality. It's kind of what we're just talking about, but it is easy to think, oh, we'll only spend this much on dinner out,

or when you're making your food budget for the month, you're like, oh, I bet we could only spend X amount at the grocery store, you know, $100 for our family of five or something. And then as you go on, you keep going over budget month after month after the same category. And you just have to realize sometimes, hey, this has to be more accurate. And so you may have to change your numbers, which is okay. But you want to look back at your own data and just figure out, hey, what is realistic here? Now, I could never survive without my every dollar app because it automatically gives me a written record of my spending from the previous months and years. And it really does help me adjust accurately to fit our family's needs in the season we're in, which is so great.

So just live in reality. Remember that. Number two, not adjusting the budget in different seasons. So we spend money differently when it comes to, you know, the month of February. Or you spend money differently in December and July. Every month and week and year is different. kids activities, school schedules, travel, holiday, birthdays, anniversaries, you name it. So which, again, makes it really important to customize your budget for your specific needs

each month. And budgeting is not a one-time activity. Again, it is a regular practice that you need to get in the habit of. And the good news is, the longer you do it, the easier and quicker it is. I mean, Winston and I, it takes us, gosh, like five minutes to talk about the budget every month because we've been doing it for 15 years. We really look down, delete categories from the month before that we're not going to use, add categories if we need it, trim some things up, and we're good to go. It really is. It is in that rhythm. So invest some time up front, get in that rhythm, and it really is so, so helpful. All right, number three, too much brand loyalty. So one thing that everyone seems to agree on is how much the world has changed, especially in the last 10 to 20 years.

We've made huge advancements when it comes to technology and just the way we do life. And it used to be that you always had to pay for higher quality items if you wanted it to last long. And while that can be true in some cases, I think for the most part, especially technology, it's caught up really to our needs in life. So the next time that you need a new vacuum cleaner or a cell phone or a hair dryer or a hair straightener, just research, maybe even some of the dupes because you could find some great products for way less. Now, of course, if you're further along in the baby steps and you want to, you know, dish out the big bucks for the fancy thing, do that. But the next time that you need a new pair of leggings, consider Amazon dupes instead of

Lily Lemon. You know, you can do some things that you're like, yeah, save some money that still has some really great quality. So again, brand loyalty can actually cause you to spend more. So look elsewhere. Number four, prepare for the unexpected. So tracking your spending definitely requires some attention to detail. But there comes a point where we can like pigeonhole ourselves just a little too much. So if you're finding yourself, constantly stressed out by last-minute purchases that technically you didn't see coming, then consider adding a miscellaneous category to your budget. Everybody needs this.

This is like the catch-all, okay? Because if you really do budget every single dollar and a $50 thing comes up, it's like, oh my gosh, what are we going to do? But have a miscellaneous category. This is a total game changer that really puts you at ease because life is going to happen. So instead of being completely stressed out about the expenses that maybe you forgot about or overlooked, just know to expect them. Proactively know that there's many things that you didn't plan for and build that into your budget.

And if you're not fully budgeting yet, if you're not on that train, make sure to download Every Dollar. It is a free budgeting app, and it is great, you guys can't hurt, okay? Just try it. So you can download that app and then also go to Everydollar.com slash Rachel and create your first budget there. And it is amazing when you start to be intentional with your money, how much peace you have. So hopefully those four things help you guys when it comes to your budgets, because, man,

It is a work in progress always. Well, thank you guys so much for listening to this episode. And if you love the show, make sure to leave a review because your feedback helps us out so much. And make sure to subscribe and share it with your friends. You know, think about, oh, yeah, my friends are always spending money to save. Well, maybe they will love this episode. So thanks again, you guys, for listening. And remember to take control of your money and create a life you love.