The Rachel Cruze Show - How to Budget and Invest Your Money to Build Wealth and Reduce Stress

Episode Date: October 17, 2022

Today’s episode is all about helping you get the most out of your money. We’ll go over some great tips for making your dollar go further (especially at the dollar store), and then we’ll talk about how to set and reach your investing goals.   Here’s what’s coming up: ·      How I Invest 30% and You Can Too ·      How to Make Your Dollar Go Further During Inflation with Do It on a Dime   Helpful Resources: Christian Healthcare Ministries Financial Peace University EveryDollar                                                 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.   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

The more people that touch a space and the more people using that space, the more chaotic it is. For every single time a day, somebody touches that space is how many times a year you have to reevaluate it and do something about it. Hey, guys, welcome to the Rachel Cruz Show podcast. I am so glad that you're here. So in this episode, we're going to talk with Catherine from Do It on a Dime about how to organize your home on a dollar tree budget. But first, I'm going to go over how much Winston and and I invest and how you can invest that much too. So take a lesson. So today we're going to talk about investing.

And this is a topic I get a lot of questions about and a lot of people are like, what are you doing, Rachel? You know, what does it look like? Because Winston and I were on baby step seven, just full disclosure. We've been doing this stuff for, gosh, 12, 15 years. And so it's been amazing to see our progress and our own story. And so I just wanted to kind of let you in and tell you what we do with our money and how we invest up to 30% of our income.

So again, first and foremost, hear me say, we did not start off doing that at all. We started off, thankfully, on Baby Step 3. We both didn't have debt coming out of college. We got married really young. We worked on Baby Step 3, saved up our emergency fund, and then went through Baby Step 4, 5, and 6. And now, fast forward, almost 13 years of marriage,

and baby step 7. So remember, it takes years and years and years. So when you hear 30%, I don't want you to think that I'm saying this to be like, look at us. We're so awesome and special. No, I'm saying this because I want to encourage you that as you're working the baby steps, there's going to be a point that you get to in your career with your income and with no payments that you're going to be able to do a lot. And that's what's exciting is, yes, you're able to use your money to help you in your current present state of living

month to month, but also you can use it to look towards the future, which is what Winston and I really focus on a lot with our money is looking towards the future. So we're going to talk about that and just some of the strategies and kind of how it plays out, and really, honestly, how simple it is. So first, I want you to start off with the baby steps. Baby Step 1 is a $1,000 emergency fund. Once that's complete, Baby Step 2, you're going to pay off all of your debt except for your house. Baby Step 3 is to save up three to six months of expenses. So once you do all of those steps, one at a time, then you're going to press play on investing. So yes, if you're on Baby Steps 1 through 3, I recommend pausing investing for a short time

so that all of your money could be focused on getting out of debt and saving up an emergency fund. Then when you get to Baby Step 4, you're going to press play and you're going to invest 15% of your income into retirement. So when I say that, if you work for a company and there's a 401k and there's a match, yes, put money in there and take that match. If you have not opened up a Roth IRA, make sure to do that. So there's these investment vehicles when it comes to retirement that are really smart to plug into because they help with taxes as well. And if you get a Roth, like a Roth IRA or even a Roth 401k or 403B, then that means you're putting money after you pay taxes,

and the growth in that account grows tax-free. You don't pay taxes on the growth when you take it out. And we're talking about like hundreds of thousands of dollars later in life over decades. And so it is such a powerful thing what compound interest does. So just as an example, let's look at a salary. And again, you're on babysat four, which means you have no debt payments except for maybe a mortgage, and you have a fully funded emergency fund. So investing 15% of your income on a salary of $44,000 means you would invest $550 a month.

If your salary is $75,000, then you're going to invest 15% of your income, which comes out to be $937 a month. If your salary is $100,000, investing $15% would be about $1,200 a month. So when you look at that and over the course of time, compound interest is a magical, magical thing. Now, once you fund kids college, baby step five, and then you pay off your house, baby step six, then you move on to baby step seven, which is just a beautiful thing because then you get to invest more, save more, and give more. But again, that baby step four, hear me when I say, compound interest is a beautiful thing

because when you put money in an investment, you earn interest. On average, the stock market has average 12%. It's not doing that right now. now, but over the course, since it started, it's been 12%. So when you put money in, you make 12% on that money. And the next year, you make 12% on all of that, not just what you put in last year, but on the interest you also made. You make 12% on that. And then next year, next year, next year and next year, and it just grows and grows and grows and grows. So you're making so much money. It's truly, when people say your money is working for you, that's what this is.

You are sleeping and your money is making money. It's an awesome thing. Investing is amazing. Okay, so here's what Winston and I do when we invest. So we do our 401K, both of us at our company and take the match. We also max out our Roth IRAs. And if you make too much to have just a traditional Roth IRA, you can do a backdoor Roth IRA, and an investment professional can help you with that. And we also use our HSA, our health savings account,

as an investment vehicle as well. And then we look to say, okay, once everything is done, and if we have money left over, we also opened up a mutual fund probably five years ago or so that we have put money in as well just to have there. If we need something, you know, we can take it out if we want, but also just for it to grow because I just love investing so much. So if there's anything there, anything extra, we're like, throw it in the mutual fund. So I know 30% it sounds like a lot. But honestly, for us, when we don't have payments and we're living in Baby Step 7,

And we don't let our lifestyle go up a lot, you guys. Like, I looked at our budget from this past year to back even in, like, 2012, like almost 10 years ago. And it's changed some because we added kids, which made it more expensive. But, like, our, like, miscellaneous category is still the same dollar amounts. Are out to eat. I upped it, like, $200 a little bit more. But it's not a ton.

Like, we just don't spend a ton of money. We enjoy life. We enjoy experiences. so we will save up month to month if we want to go on a great vacation or something. So don't think that we're just like sitting home and just like hoarding money and like not enjoying life. You know me. I love doing stuff.

But we just don't let our lifestyle get out of control. And so we have upped it a little bit throughout the years. But again, when I look back at our budget, even 10 years ago, I'm like, gosh, it looks like pretty similar. It's nothing crazy. And I even tell myself, I'm like, you know, I could take some of this money that we have and be like, I could go on a huge shopping spree. And I could, and that wouldn't be a bad thing. But I also have gotten to a point where stuff is kind of just stuff.

And after you get it, you're like, okay, it's great and I can enjoy it. But after a while, it just ends up being stuff. And so looking ahead to our future and saying, gosh, you know, I feel like I'm just like wasting money for the sake of just buying something. And if we get to that point, I'm like, pause. Let's reevaluate. Let's look and put money again towards investing. So it's kind of a minimalist mindset, if you will.

but it's helped us live our lives, and honestly, we're enjoying it. It's great. It's great. So now, another way that we can also get to that 30%, that I would consider investing is also giving. And so being generous is a big part of Winston and I's plan as well. We have found two different organizations that we just love and have a heart for what they're doing in life. And so we tithe to our church, but we also give extra beyond that to these two organizations

that, again, we just personally have been impacted by and that we love so much. So you can even look at that, and we do have, like, we are investing in these relationships. We're investing in these, I mean, they're nonprofits, but these ministries that we believe in the work that they're doing. So you could add in to 30% too. So again, I want to encourage you guys, keep going, keep saving, keep investing, and don't compare where you're at with someone else's, right? Like, if you're just starting this, don't compare your starting point to someone's middle, you know, the part of their middle journey, or even if they're on baby step seven. just know that you can accomplish what you need to right now. And I promise you're going to get there.

Just keep at it because the hard thing, too, is building wealth over time. It is not quick. If someone says, oh, yeah, just do this thing. You'll make so much money real fast. Red flag. It's not worth it. That is a get rich quick thing.

This is over time. Like I said, 13 years, almost 15 years with some of the stuff I was doing before we got married. And it's like, that's a long time. That's a long time. So it's not going to happen overnight. It's not going to happen in one. to two years, just know that this is possible for anyone, anyone.

Don't let a percentage scare you off. Let it motivate you to say, man, what would happen? What would my life have to look like for this to come true? It is the long game that you are playing. I am so excited because we're going to be talking about one of the things that I'm not naturally great at, but I love. And that is organization. So I'm bringing Catherine on with Do It on a Dime.

and Catherine is just, she's a master at this. She has a YouTube channel, she has a blog, she has social media, all around taking our chaotic spaces in life around our homes and organizing it so we can have peace of mind. So, Catherine, thanks for being on. Oh, thank you so much for having me, Rachel.

I'm so excited. Oh, I'm so glad. Okay, so one thing I love about you that I know, you love Dollar Tree, and you love to organize and specifically on a budget, because I know it's kind of trendy right now to organize, and everyone loves it, is great. But some of the things can get very pricey, very expensive, but you have found a way to say,

no, you can do this on a budget. So first and foremost, how did you kind of get started with this whole idea of organization and helping other people do it? Oh my goodness. I love that so much. And I'm totally guilty of being on TikTok and going through the scroll and seeing all of these beautiful spaces and going, oh my goodness, I love that so much. So I was actually a teacher for a really long time. It was a teacher for 10 years. And I was kind of a naturally organized person, but I was working with a teacher budget. And all of these products were so expensive. I started YouTube back in like 2013.

And so I went to the dollar store and I thought, you know what? With a little bit of creativity, I can make something really beautiful using dollar store products. I started doing it in my own home and sharing it on YouTube and then friends and family were reaching out. And all of a sudden I had people who said, hey, Catherine, you want to come over and organize my house? And I said, absolutely, as long as I can do it on a budget. So it kept growing. and it's where we are today. I love it. That's amazing. Okay. So when it comes to organization, where are the most chaotic places in our home?

Because I know where mine are in my head. So I'm curious from all of your expertise if it's the same. Okay. So I have a theory, and this is just something that I've developed myself. And Rachel, you tell me if you think this is true. Okay. The more people that touch a space and the more people using that space, the more chaotic it is. Oh, that's good. And I think for every single time a day, somebody touches that. that space is how many times a year you have to reevaluate it and do something about it.

So I'm talking about the pantry. Your kids are always going in. The kitchen always gets crazy. Usually the refrigerator in most homes is crazy for people. The entryway, all of those things just get nuts. And also the places where you haven't addressed it in a while and you're guilty of the clutter shuffle. So you have a lot of stuff that you shoved in the back of a closet and you're dealing with like

the front 10% of the closet, but the rest of it is just a mess. you know it, you shut the door and you're like, I don't want to deal with that. Yes. I know. That's my, I'm so guilty. I'm like, I try to keep things organized underneath, but I would much rather just shove it and a nightstand drawer close it and it looks peaceful out here and I can function. And then when I open it, I like cringe and I'm like, I know I have to do something about it, but I don't want to. Okay, so when you're helping people and saying, hey, here are some great items to buy and that you can do on a budget, specifically at a dollar store, right, whether it's dollar general, dollar tree, dollar store. Because do you have a dollar store?

because do you have a specific dollar store that you like more than the other? Yeah, yeah. So I tend to mostly shop at the dollar tree just because historically everything was truly a dollar. Now it's $1.25 and they have some things $3 and $5. But I really like all of the stores. I mean, you can find what you're looking for at most dollar stores, whatever's local to you.

So dollar tree, dollar general, those are my favorite. Okay, good to know. Okay, so when someone walks in to one of those places to buy things to help organize, what are pieces that you're like, here's what you need. Look for these things. Totally. So if you're, if you're anything like me, you walk into a dollar store and you're like, everything is a dollar. I am organizing all the things today and buying all of the things. So as fun as that is, I would recommend not doing that. To find a spot in your house that you want to organize, get everything out and declutter at least 20% of it. And then you can take a good inventory of the space and say,

okay, this is what I have. Here's who's using this and get a general idea in your head of how you're actually going to use that space. And then go to the dollar store and see what you can find. And I know that it can be really overwhelming. So I have a couple of tips for your viewers and I really hope these are helpful. So I would really stay away. And I know some people might have videos. Some people are just listing, but I'll explain everything.

I would really stay away from the round containers when you go into the dollar store. You'll see a lot of these, but the surface area isn't great. and things kind of end up falling out of them so I don't recommend them. Go for the bigger, larger containers that are rectangular and square. These are my favorite. And a lot of the ones that are $3 to $5 are really going to rival what you're seeing at Target right now, and they charge like 15 for them at Target. And the great thing about this is it's going to give you that beautiful uniformity.

So when you open up a cupboard or a cabinet, you're like, wow, it just looks nice. And that's kind of what helps it to stay. organize. And then since you've decluttered it too, it also helps. And something else that I would say is to really think about how you can maximize your vertical space. And the dollar tree is a really great spot to look for that. A lot of the containers now have lids on them. Some of them are clear so you can see what you have. But that way you can stack things up. And I just label these with these little vinyl decals. You can get them on Etsy for like 99 cents. Get some custom ones. They're not very expensive. And I really, really like it. So,

truly, stick with those rectangular square bins, see where you can maximize your vertical space and get creative. That's so smart. I never thought about that with the round versus the square or rectangle, but that makes sense. Even when you just showed it visually, I was like, oh, yeah, I never would have thought of that. Well, it's so funny, Catherine, because I, just probably three days ago, we have a whole area in our living room that it's like built-in bookshelves. And so underneath one of them is like, we're just a bunch of kids' toys go because I wanted to be the mom that was like, toys belong in the playroom. And that's where they're going to stay.

And that was a lie. That doesn't happen there everywhere. So I was like, I need a central place just to put them and hide them away. And the area was just, it was so messy. So I was like, listen, we're going to just get a container. And it's felt good. And then about three days ago, my girls dumped it out. And it was like Barbie parts and pieces and Legos and Polypocket.

I mean, it was like the most tiny things you can imagine. And they just scattered. And I was like, all right, girls, we're going to put everything back in the bin. and you each get to pick up 20 things to put back in bed. Anything else that's on the floor, I'm throwing away because I can't take it. I can't take it. So it feels good when it's organized

because it keeps me functioning. And then when all the bins get out on the floor, I was like, there it all is. I like it better when you don't see it. And it's just in the bin. Totally. I feel like those breaking points are kind of important, though. When you kind of look at everything,

it take inventory and you're like, all right, something has got to go. I feel like we have those at our house all the time. Yes, I know, no. Okay. So I want to do a couple of like, rapid fire questions with you when it comes to the dollar tree or the dollar store, because, again, the stuff is so good. And like you said, it can go in and you can feel like, oh, my gosh,

everything's like a dollar. So I can just get everything. But you still want to have a plan. You still want to be intentional, which is big. So what are the items that are not worth buying from the dollar tree? Anything that you have to plug into an outlet. I would stay away from electronics. Those things tend to break. I, you know, bought a glue gun once at the dollar store, and it worked okay. And then I realized later on came out, there was like, could be a fire hazard. I was like, okay, no. So anything you plug in, stay away from it. But there are a lot of really good name brand products. If you're seeking out those and staying away from electronics, you're usually pretty good. Okay, that's so good.

Okay, so what's your favorite money-saving fines that you've ever gotten? I don't know if I could boil it down to one, but I think I could give you a section that has hand over fist save me the most money in my life. And that is the serveware, entertaining and kitchen section. Plates, chargers, Thanksgiving, tablescape. You can literally do an entire table scape for like $20. Weddings. And the kitchen section is great. I think a lot of people don't think about it, but they have the Betty Crocker line, which is name brand. So if you've got somebody maybe who's going off to college for the first time or getting that first house, you really can furnish almost an entire kitchen or at least get all the utensils that you need from the dollar store. And those

name brands are really high quality. Yeah, that's so smart. Okay. What's the weirdest thing that you've ever seen at a Dollar Tree? Oh, man. I think this one was recent. We were in Dollar Tree and I saw they had a purple tuxedo suit men's jacket that was extra large for a $1.25. And I was like, what is this doing in here? So I asked the cashier, I was like, is this supposed to be here, who buys this? And she's like, oh my gosh, people come in here all the time. I had somebody who was playing Willie Wonka for his school play, and he came in and bought the jacket so he could, I was like, that is crazy. So there's some things that like that that are crazy, but people find the craziest uses for them. So I kind of love it. You never know what you're going to find.

Yeah. Right. Even your wardrobe. Even your wardrobe. That's so funny. Okay, what are, it can be a specific item or maybe a genre, kind of what you did with the kitchen. Where are the things that people go in, they rush and buy and there could be some like remorse, some buyers remorse that they think, oh, man, I shouldn't have gotten it here. I could have probably invested and gotten something a little bit nicer. Yes, I would say that is the biggest challenge of shopping at the dollar tree because right now there are so many name brand products. A lot of stores have a lot of excess inventory. They send them to the dollar tree. And what happens is at least this happens to me. I'm just going to be honest about it. I go to somewhere else and I'm like, oh, this is $5. I don't really need it.

And then I'm in the dollar store and I'm like, it's $1.25. I think I need five of them. So I end up buying more than I actually need. And spending money, you're not saving really anything. And so that's been my biggest remorse is maybe over buying something because it was a good deal. So that's why when you're getting organized, just being really intentional, do I actually need this and how am I going to use it? Because then you really can save. Yeah, that's so smart. It's the quantity problem.

Like you're saying, you justify it because of the amount. And then you look like, I have five of these and I didn't need five of those. That's so funny. Okay, if you could give all the people listening and watching one tip when it comes to just shopping overall, and specifically at the dollar store, dollar tree, to make their money go the furthest. What would that one tip be? I would say, I have a practical tip and an encouraging one. So this is kind of like a two-partner.

So I would say the first thing is everything is online now, and there are crazy amounts of reviews on any product that you want. I think a lot of people don't realize dollar stores all have websites and almost every single product is reviewed. So if you pick up a weird item and you're like, hey, I needed a light night or whatever for my bathroom or this diffuser, does this actually work? Chances are it's being reviewed online and you can see other people saying, leave that, not great, or it's a good deal.

And that's super helpful when you're trying to make those purchases. And also, this is kind of the encouraging piece. trust your gut and be creative. Because I think what I hear from a lot of people is, oh, that's super cool, but I could never go in the dollar store and make a craft or do this thing. That's really not for me. But honestly, I really have found a lot of joy in doing those things. And if you see something and you're like, hey, I've always wanted to try to make it. Give it a try. Everything I do in my channel doesn't require tools. It doesn't require any special skill. And it feels so good after. It's like, hey, I didn't spend a lot of money on this. And I made my space a little bit more beautiful. I love that. And there's a little bit of pride of like,

oh, I did this. Yeah, totally. It's possible. That's so great, Catherine. Oh, I love it so much. Thank you, thank you, thank you. Thanks for coming on. And one last and final question, I ask all my guests,

what is one thing that you're doing with money to create a life that you love? We really do love Ramsey Solutions and don't spend money that you don't have. And when you do have the opportunity and you've worked for it to invest in experiences because things get old and break, but experiences get better and richer the more you tell them. I love it. I'm an experienced person, too. My husband, our anniversaries, in a few months. And I just texted this morning a screenshot of like two places.

I was like, we should go here for two nights. Let's go. Let's go. I love that. Experiencing it all. That's so great. So wonderful. Well, Catherine, thank you.

And where can everyone find you if they want to start following you? I am everywhere. Find the spot that you love and find me there. Facebook, TikTok, Instagram, and YouTube. dot com slash do it on a dime. Do it on a dime. So great. Well, Catherine, you are wonderful. I so appreciate all your tips and just giving us peace and order on a budget because that is so, so helpful. So thank you for coming on. Thank you, Rachel. Gosh, Catherine is awesome, you guys. So make sure to check out everything she's doing. And I want to thank her so much for being on the show. All right,

you guys, thanks so much for listening to this episode. And if you have not hit that follow button to subscribe to this podcast, make sure to do that. and if the spirit leads, you can leave a review. And as always, make sure to take control of your money and create a life you love.