The Rachel Cruze Show - How I Budget, Invest, Save and Spend My Money

Episode Date: December 13, 2024

💵 Start your free budget today. Download the EveryDollar app!   So you sat down and made your budget (take a deep breath)—now what? In today’s episode, you’ll learn how I budget, invest, save and spend money, as well as how to build these habits in your own life.   Next Steps:  🎥 Watch my video Do This EVERY Time You Get Paid (Paycheck Routine).   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  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, hey, you guys. So one of the points when it comes to winning with your money is that you have to do a budget. We talk about that a lot on the show. But honestly, once you accept the fact that you need a monthly budget, well, actually doing it is what's key. Because we can talk about it all day long, but actually putting it into practice is where you're going to see a lot of change when it comes to your money. And so today, I want to talk about what comes next. So we're going to talk about how I budget, but also how I save. invest and spend my money. But before we get started, make sure to subscribe to this channel so you never miss a future episode. All right. First, I want to make sure that you know about one tool that's an absolute must when it comes to your monthly budget, and that is every dollar. Every dollar is the budgeting app that I use, and it makes all of this so easy.

So when it comes to your saving and your spending and you're giving and all of it, categories are there for you. When you track transactions, it's there for you, your paycheck planning to make sure you have enough in your account to get you through until you're paid again. I mean, all of that is in every dollar and the premium version as well. So make sure to check it out because, again, having your budget that's available for you, it's on your phone, it's an app. When you carry your phone around with you, your budget goes with you as well. So that's the great thing, is it's very convenient and it's very accurate because it is a real-time picture of where you are

with your money. Next, I want to clarify something that I get asked about from time to time, and that is expenses that aren't included in the budget, but they're still taken out of your paycheck. So things like insurance, investing contributions, certain taxes, HSA funds. So there's certain things that are going to be taken out of your paycheck. Now, when it comes to investing specifically, you may be investing after tax dollars, meaning the paycheck that hits your account, you may be using some of that to invest. So when you look to invest in a Roth IRA, for example, or even just a mutual fund, if it's outside of retirement, then that is the case that you will be using your paycheck to fund those. But your 401k match or your 403B match within your job, that will be taken out usually before taxes.

So, Winston and I, we fund both of our Roths after taxes. So we do put money aside every single month. And our goal is by the end of the calendar year as we start in January, we try to go ahead and fund our Roth IRAs all in one. so it has the entire year of growth instead of investing a little bit by a little bit. But again, we've been doing this. We're on maybe we're up seven for 15 years. So we've gotten to get kind of a cycle ahead with our savings, which has been really great. But if you can't do that, that's totally fine.

So maybe you're investing a little bit each month. But one thing that we've tried to do, and we've made it a goal, and we did a couple of years ago, is to be able to have that chunk to invest earlier in the year so we can have that full year of growth. All right, now it's time to walk through how I personally use the every dollar budget every single month. All right. So within every dollar, one of the things that I would encourage you to do, something that I do every single day is track transactions. So part of what makes a budget so powerful is that you know what is in every category of your spending.

So if you have a line item for groceries, then you know, here's how much I'm going to spend this month on groceries. And when you go and you swipe your debit card at, you know, Walmart or Whole Foods or Target or Aldi, wherever you're shopping for groceries, then that transaction is going to go into the every dollar app. you're going to be able to see it, and you're going to drag and drop it into groceries. And then it automatically does the math for you. It subtracts how much you had budgeted for for what you have remaining. So the rest of the month, you know, here's how much I have. So if you go and grocery shop the next week, that transaction will hit your account that day, drag and drop it.

You know, here's how much we have left. So it keeps track of your spending in every single category. And this is honestly one of the most powerful parts of every dollar because you are able to see it in real time where you really are. because it's one thing to create a budget and just see it and then, you know, try to stay with it, but you have no idea what you're spending in every category. This gives you the power to know exactly what is left in each category, which is going to help you be successful in the budget. Now, that transaction that automatically drops into every dollar, that is with every dollar premium. So I'll put a link below so you can check it out. But if you just do the free version of

every dollar, you're able to manually just type in those transactions. And once you leave the grocery store, get in your car real quick and just say, you know, Walmart, here. is how much I spent, and you can drag and drop it yourself as well. But keeping track of your transactions is so key. Number two, it's a checkpoint. So it allows you to be like, okay, can I, you know, pay for this Netflix subscription? Am I wasting money? Because we don't use it a lot, but I do like to have it. Is this okay? This is able to say to you in your budget, yeah, you have the margin to do that. You can have a Netflix subscription and you are okay. Or it does the opposite, and you actually see how much you're spending in everything and you're

like, oh, that's a lot, and we never use that, that or that. Let's get it out of here and save some money. So again, it gives you this permission to spend and you're able to stay within the budget, which I love. Number three is it's a calendar reminder. Yeah, this is something that I personally love because I'm not always great at details. And so keeping up with the crazy life we all live, this is always helpful because you do a new budget every single month. So when you look ahead, then you're able to be like, okay, what is going on this month? And literally in October, we were doing the budget and once it was like, oh yeah, Charles's birthdays in October. And I was like, Yes, it is. I got to plan a birthday party. I've got to be thinking about this. It's like it goes

in the budget, but it's also a reminder of things that are happening that month. And you're able to really communicate if you have a spouse, like what's going on in your life or if you're single, you're able to really look to be like, okay, I'm going to be proactive about what's going on so things aren't sneaking up on me. And I'm going to know ahead of time. And it helps you plan. It really, really does. So everything from doctor's appointments to, you know, dinner parties, holidays, birthdays, like all of it. It all goes in the budget. And it helps you stay on track with your life as well. So it's one thing I love about it. Number four is paycheck planning. So I mentioned this at the beginning, but this is one of the best features of every dollar, especially if you're someone that's

in that paycheck to paycheck cycle and you're spending on the next paycheck to get you through the end of the month. And when you're in that cycle, making sure that you have enough in your accounts, because I just heard a stat that banks made, it was close to like $3 billion in overdraft fees last year. So like crazy amounts of money that banks are making. game because people run out of money when they get to the end of the month. And they're like, oh my gosh, I still have all these bills I have to pay. Because paycheck planning really makes you see, okay, if your paycheck hits on the 15th, what do you have left between the 15th and 30th that has to be paid? And will that paycheck take you through the latter half of the month?

And if you get paid on the first, same thing, from the first to the 15th, do you have enough there? And if you notice all of your big bills hit at the beginning of the month, like if your rent or mortgage and all your utilities and maybe some debt payments, like if everything hits towards the front part of the month and that one paycheck isn't getting you through or it's making it really, really lean in a possible overdraft situation, then what you can do in it is actually call some of these companies and move your payment plans and say, hey, can I actually have a different date later in the month that I can pay this? So that way, again, it just gives you some breathing room, but you may not know all of that unless you see it and paycheck planning helps with it.

So it's a great tool. And lastly, the fifth thing that I use it for is sinking funds. And I love sinking funds because it's really a great tool to help you save for things that you want in the future. So this could be everything from replacing a car to a vacation. But your intentionality around saving, you know it's getting done. So you can put it within the savings category and it will actually roll over month after month to say, okay, yeah, you're saving in this area. And here's what's the total you have saved so far. So let's pretend that you are going to replace a car. And you're like, yep, we need, you know, $10,000 in 10 months.

So we got to save $1,000 a month, and we're going to be getting side hustles and doing this or that and that, because we've got to save this much per month. Well, you can actually create a sinking fund for that replacement car, and you can actually roll it over month after month and watch it grow, but you have a place for it so you know that your money is going specifically to a fund that you want, and it's not getting lost in the mix of all your other spending. All right, for more of my personal budgeting habits, make sure to check out my episode on Do This Every Time You Get Paid, which is my paycheck routine. That's coming up next.

And share this with a friend who might find an every dollar budget very helpful. All right, remember to take control of your money and create a life you love.