The Rachel Cruze Show - How to Grow Your Money Mindset with George Kamel

Episode Date: January 24, 2022

What’s the key to taking the situation you’re in and doing something great with it? Find out in my conversation with George Kamel. You’ll also hear why cash is still the best way to buy a car, plus everything you need to know about your taxes in 2022. In this episode: 5 Steps to Buy a Used Car With Cash The Crazy Secret to Having More Money How to Stop the Government From Stealing Your Money Resources: Ramsey Car Guide Ramsey SmartTax Learn more about your ad choices. Visit megaphone.fm/adchoices

I just saw a clip from Family Feud, where this guy said his dream is to become debt-free, and Steve Harvey said, no, that'll never happen. And you shouldn't want it to happen because debt is good. And using other people's money is how you get rich. And my blood was boiling, Rachel. Boiling. I'll never watch Family Feud the same again. Hey, guys, welcome to this episode of the Rachel Cruz Show podcast.

I'm so glad that you're here. In this episode, you'll hear a conversation I had with George Camel on how to grow your money mindset. Then we'll go over how to get more money in your pocket throughout the year by doing this one thing. But first, let's talk about five steps to buy a used car with cash, because we know these days they are expensive. Take a listen. The market for used cars right now, it's kind of a bummer. I feel like the demand is very high, but there's low supply. But listen, paying cash for a reliable, slightly used car is still the best way to buy. So here are some tips on shopping for a used car in this market.

The good news is that you can get top dollar if you're looking to sell your car or trade it in. So just be prepared to act quickly. You want to be flexible because maybe the model or some of your wants isn't available, but there's a great deal. So be flexible. Also, you could consider a sedan. So apparently the demand for SUVs is really high, and the demand for trucks is really high. So dealers are more likely to negotiate with you the price of a sedan versus a truck or an SUV. And Consumer Reports has found that sedans tend to be more fuel efficient than SUVs of the same size.

So you can save money on gas, too. It's great. But make sure you look for a return policy that is seven days or longer. All right, here are five steps to buying a used car with cash. Number one, put it in the budget. So you want to know, okay, how much am I going to spend? Because remember, you're going to pay with cash. And if you have more savings, then you can say, okay, let's put some savings in here

and see how much we can figure out to spend on a car. But if you need to save over a period of time, that's when you want to create a sinking fund in your budget. So, for example, let's say you want to buy a $7,000 used car and you have two years to save for it. You kind of look out in the future and say, in about two years, I'm going to have to replace it. Then you know you have to save $292 a month to get to $7,000 in two years. So when you do that, you want to make sure that, again, you have money in your entire budget to pay bills. So you want to make sure that amount that you're saving for for the car is small enough that you're not behind on your bills.

But you want to make sure that it's enough that you're going to meet your goals. Now, if you can't wait that long and you're like, no, I have to, I have to replace my car now, then there's always the option to sell some stuff, look and see how much is your current car worth, you can get a second job, anything you can do to get some cash together to replace your car. Because remember, cash is number one. That's what you want to spend when you're buying a used car. You just want to spend with cash.

All right, number two, you're going to start shopping. So there are some different ways to buy a used car. you can buy from an independent used car dealership. So this is just like walking into a dealership, you know, kind of haggling with the salesman, all of that. So there is an option there. And when you do that, you want to make sure you do your homework. You know what you're getting yourself into and have the willpower to walk away.

If you cannot get a good deal, then walk away, you guys. It's not worth it. But I'm telling you, you can still get a good deal at a reputable dealership on a used car. Now, there's also private sellers, so this one can be a little bit riskier, so you want to be prepared, take some precautions, but you can find hundreds of cars being sold in your area on different websites like eBay Motors, Cars.com, AutoTrader, Craigslist, Facebook Marketplace, so many great options. You can also find some on online car retailers. So this is places like Carvana, CarMax, and they have huge, online inventory, you guys. I mean, you can go in there. I mean, so, so many cars. And the great thing about this option is that their cars go through a rigorous inspection process. And you can often just browse looking for your car right there on your couch at home and just be car shopping right there. And so the downside to this, though, is that prices are a little bit higher than a

private seller. And there's really no room to negotiate. But you're kind of paying a little bit of an extra price to skip the hassle of everything else. Next, you want to check the car's value. So you can use Kelly Blue Book for this. They use data collected from actual sales and auction prices to give you an accurate price range. So this will help you negotiate and help you from not paying too much for a car. And then also, I would research and get an idea of how much you'll have to spend to maintain the car. For instance, a Honda Civic will be very different than a Mercedes. So just remember that. Number four, inspect the car yourself. So actually drive it, test drive the car, see how it runs. Are there any weird noises rattling happening? Look for red flags. You also want

a vehicle history report, which is a VHR. So services like Carfax provide this stuff because it shows the car's ownership history, accident history, title status, mileage, everything you need to know. so it is worth getting that for sure. And then you want to take your car to a mechanic. So always, always, always inspect a used car. It is worth it. A pre-purchase inspection shouldn't cost more than $100. And I'm telling you that is a great investment.

All right, number five, negotiate for the best price. So sellers need your cash more than you need their car. So remember, you have leverage in the situation. and go in with knowledge. Do your research. Know how much, you know, not only are you going to spend on the car, but other cars on the market. Know what a certain car costs versus another one and actually have some knowledge when you walk in and tell them that you are going to pay with cash. Don't tell them how much you have. And ask for a deal. Don't be afraid to throw out a number or ask how much they can take off. Just ask and then be quiet.

silence is awkward and someone is going to start talking first and it shouldn't be you. Let them just talk their way, keep talking and be silent. Again, it can be awkward, but that is a powerful negotiation tactic. And then be prepared to walk away, especially if you're not getting the deal you want. It's not worth it. Walk away. This car, there are going to be other cars. So when you get in the mindset, like, this is the car I have to have.

This is my dream car. This is my only car. there are hundreds of cars out there. Don't get fixated on that because then you're going to make a really bad decision. Now, another question we get around cars all the time is should you repair your car or replace it? And there's really a spectrum. And math is going to be your friend on this because it's going to really show you and reveal,

hey, do I need to just sell my car and get a new one or should I repair this car? So there are some other factors, again, like repair frequent. and what you owe on your car can come into play as well. So first, estimate the value of your car without the repairs. You're selling as is. So, for example, let's say you can get $5,000 for your car as is. Now, you can estimate the cost of your repair. So let's say it takes $1,000 to repair your car.

If you sell it immediately after the repairs, could you make $6,000? If so, then maybe you would lean towards just repairing it. But let's say the repairs cost $2,000. do you think you could get $7,000 for your fixed car? Probably not. So take your $5,000 trade in value, again, not repaired, just $5,000 as is. And then instead of spending that $2,000, you know, you're not spending that $2,000. So you'll get $5,000, you'll have $2,000.

You can buy a $7,000 car. So the bottom line is when the dollars you're spending on repair is start to creep up towards the amounts that your car is actually worth, then you know it's time to replace it. And remember, older cars tend to require more costly repairs. And remember, those other factors that I mentioned, like, are you worried about your car breaking down? You're going to be stranded. Could you lose your job if you don't have reliable transportation? Is your car unsafe?

Those kind of things, if the answer is yes, then yeah, you probably want to trade in your car for a newer one. And that's okay, because right now you're ready and you know what to look for. So all this information I've shared with you here today will be in our show notes. And if you want it more in a compact way and even more information, just Google Ramsey Car Buying Guide and it will all be in there. Hey, homeowners, listen up. Your home is the biggest purchase you'll ever make. That's why getting the right coverage in place is so important. A good independent insurance agent will help you find the exact policy you need to protect your biggest asset. If you don't have an agent you can trust, check out our network of endorsed local providers. our ELPs. They'll shop around to find you the best coverage for your home at no extra cost.

These agents will put you first. That's why they're Ramsey trusted. Learn more at ramsysolutions.com slash home insurance. So we all want to do something great with our life, right? We've been given a great life and it's like, okay, how do I make it even better? So we're going to talk about a really interesting topic today, which I'm excited to bring George back on. I'm back. George by popular demand. Well, cool. Four people in the YouTube comments were like, bring this guy back. Bring him back.

And I said, great. I'm going to do that, George. Thanks. Okay, so I'm excited today because we're really going to dive in and talk about growth mindset. This has kind of been like a buzzword. I feel like people have been talking about it. And it's interesting because we've all been given different circumstances, opportunities. I mean, life just looks different for everyone, right?

But this growth mindset is an important thing. So explain to everyone what this is. Yeah. So, well, there's the growth mindset and there's a fix. mindset. So we're going to be talking about both of those things today. And looking back over the course of my life, I've had a lot of failures and a lot of opportunities. And the threads that I found is the times that I grew, the times where I got the opportunity, I had a growth mindset. So this is really important. A fixed mindset is really where you feel stuck. I mean,

connected to the word fixed, where you feel like everything's just happening to me and I just can't change and things are never going to get better, where a growth mindset says, hey, where's the opportunity in this. Where can I grow? What things can I do to get out of this rut, to get to where I want to go? So it's a very different mindset, and here's the thing. You can choose. You know that sounds crazy and hebi-jee-jee-be, but the truth is, like, you can just decide to have a mindset. I'm not saying you can decide to just have success, but you can decide to have a mindset. Yeah, and I think the mindset part is so important. Like, we talk about this a lot, but believing and having hope that you can do something, and specifically on this show, when we talk about money,

that belief and that hope is so, so important. The mindset, in just, in all of life, really does affect your outcome. Do you notice that? Yeah. And I mean, this is what Dave Ramsey has done so well for 30 years, has helped people move from a fixed mindset of I'm in debt and I'll never get out, to giving them the hope, giving them the tools to have a growth mindset to say, you know what, I can pay off my debt, and I can do it faster than I thought.

And oh, my gosh, I didn't know that I could have this kind of life because I made some decisions. Yes, so, so good. Okay. So let's go through a few examples, George. Okay. In this. Okay. So a fixed mindset would say, budgeting is too hard for.

me because I'm terrible with numbers. I've heard that one before. Okay, here's the growth mindset. Grow us, George. Ready for this? I might not know how to do this well, but I'm going to find the right tools and figure it out. And you talk about this all the time with budgeting, right?

It's going to take 90 days. You're going to fail. You're going to miss some categories along the way. The fixed mindset says, see, I knew it. I screwed up like my teacher said I would. Like my parents have always said I'm a failure. And I'll never get good at money. Right, but the growth mindset says, oh, it's okay.

There's next month. I'm going to adjust my budget. and I'm actually getting the hang of this. I'm actually seeing the progress with my money, and I'm going to keep doing this thing. Yep, love it. You're growing right in front of my eyes. Thank you.

Okay, so a fixed mindset would say I don't have to prep for this job interview. I already know I'm the top candidates. Ooh, wow, there's a lot to unpack there. There's a little bit of ego involved too. So the growth mindset would say this. I'm going to spend time preparing and give it my all, so even if I don't get hired, I'll know I did my best.

So a fixed mindset, though, can still be, I mean, I know there was a lot of pride in that example. But it can be a positive one. Yeah. I mean, you can have a false confidence and say, you know what, I don't need to do the hard work. Because it's just going to get handed to me. Yes. Everything's going to be handed to me in life. I talked to some high schoolers the other day, and they just had this notion that everything was just going to work out for them and they didn't have to work for it.

No, no. Are you serious? Yes. They were just like, well, I don't have to worry about that because my mom pays for that. And I'm like, but your life is not. not always going to be this way. And so you have to have that growth mindset of what can I do now so that I build that muscle. Yes. This is really important. So good. Okay, here's another one. Debt is just a part of life. Everybody has a car payment. Everybody has student loans. It's just,

it's just being an adult. This one hits me in a different way today because I just saw a clip from Family Feud where this guy said his dream is to become debt free. And Steve Harvey said, no, that'll never happen. And you shouldn't want it to happen because debt is good. And using other people's money is how you get rich, and my blood was boiling, Rachel. Boiling. I'll never watch Family Feud the same again. Well, he said it On Family Feud? On Family Feud. He not only crushed this guy's dreams, but then he went on to teach everyone. The best way to handle money is to not use your own and borrow and borrow and debt is great.

It's a message. Very frustrating. It's a message. So, that's a fixed, terrible mindset. How do we grow, George? What's your growth? How do we grow, George? Well, it would be our growth mindset? You mentioned the E.R way, right? I'll always have a car payment. But the truth is, the growth mindset, says, hey, if I'm disciplined with my money, I don't have to live with debt. And we get to meet people every day who have that growth mindset. They come and do their debt-free screams on the Ramsey Show in our lobby. And it's always inspiring because those people had a growth mindset. And it makes you feel like I can do it too.

Yes. That's what that does. Well, and what's hard, too, is I'm like those lives, we won't stay on this too long. But it is this idea of I can do it so much faster. This, like, quick idea of I can win with money faster. I can make more money. I can become rich. And it's really easy.

I'm going to do this, and we've just learned over time, you guys, like, that's not the case. Like, that's not really how you build wealth over a long period of time, but changing that mindset to realize, okay, what really works? What's a pattern over the course of time that works? And, well, sorry, Stevie. Sorry, Steve. Man, it's not that. But the fixed mindset says, you know what, I'm going to take the shortcut.

Yes, yes. And the growth mindset says, I'm going to do the hard work, and I don't care how long it takes. I'm going to sacrifice. And that's really what creates character. Because that's lasting. That's the lasting impact that you get. And that's what's inspiring. I get inspired when someone says, I took a shortcut and got rich quick, versus a guy who says, I was diligent, consistent over time.

Who would you rather have coffee with and get advice for them? Yeah, totally, totally. So. Oh, man. It's a lot here. You're rilely on me up, Rachel. Not me. We should we?

We should be doing? You know what? I could be mayor of a small town. That's about as high as all done. I'll run your campaign, George. Thank you. I think it'd be great. Okay, so if someone is, though, in a fixed mindset and they're stuck there,

what are some things they can do to get out of that? Well, when you're in a fixed mindset, you do, generally have some unhealthy thoughts. And so the first thing you need to do is redirect those unhealthy thoughts. So we have to change our mind here. And what that comes down to is getting to the root. Where is this coming from? Is it something that my parents told me? Is it something that I grew up believing that's really rooted somewhere deep? And so you've got to, it's sometimes some deep work you've got to do. And, you know, counseling and therapy can be a great thing to unpack some of this. Yes. Because once you unlock that and you go, all right, I got the right people in my life,

have the right habits in place. It's amazing what opportunity will come your way. No, absolutely. And I love that, reaching out to other people that are professionals and they know to kind of ask the questions and dig out what's really going on, because I think that that is so key. And speaking of having people around you,

having friends who you hang out with, what that does, how that really does shape are taking us from a fixed mindset to a growth mindset. If you are in a group of friends who are always complaining about their life, you're probably going to end up complaining to. It becomes a giant venting session and no one's growing, but it feels good in the moment.

You say, oh my gosh, me too. I'm drowning institute loans and oh my gosh, let's just go spend, spend, spend to feel better temporarily. Versus being in a group of friends who are all wanting to grow together. And that's why something like Financial Peace University is so powerful.

Yeah. Because you're in a room with people who are done with the excuses, they have the plan, and they're willing to work it. And that is an inspiring place to be. So if you are in that group of friends, and maybe time to set some boundaries, find some new friends, and go, hey, guys, I love you. We can hang out a few times a year, but I really need to focus over here.

And that's going to require me maybe finding a new group to hang out with, maybe finding some new mentors. Yes, that's good. So what is going in, you guys, it is so, so key. So if someone is a little bit, they're like, man, okay, I have this fixed mindset. Maybe I don't have, like, a lot of my friends around me are complaining, or I don't have an outlet to, like, start to grow. And I have just failed and failed and failed. How do you, like, pick somebody up from that? Because failure can be hard.

We always say failure is not fatal, but it can feel that way sometimes. Yeah, and I am a chief failure. I'm the chief pessimist. So this is something that I've really, I have to work on it every day. It's a daily decision to pick yourself up. And I love what Seth Godin says about this.

He says, the person who fails the most wins. It doesn't always feel like that. But the people who gave up, they're not around anymore to compete. And so the person who's just back at it every single day, that is how you win. So part of it is realizing that failure, is not fatal.

Yes. It's going to be okay. I mean, I've been through failed jobs where I got fired. I've been through a failed marriage. I've had a lot of failed things with education where it didn't end up the way I thought. And so when that happens, you have to ask yourself, okay, I can't change the past, but I can own it and change my future. And so being future focused and going, I know that we're in debt.

I know that we're in this situation. What steps can we take to get out, even if it takes two years? And a lot of times people go, yeah, I don't want to wait two years. so I'd rather suffer for 20 because that makes sense, right? But that's really what we're saying. Yeah, totally, totally. And we don't want to change. And so part of that is just owning it and then making the right decision the next day

and the next day consistently over time. Yeah, and having that plan. And I think one place we don't see failure a lot is our favorite social media. Oh, yeah. The world of social media. And so you talk about kind of just doing that detox from it. So talk me through that because I've done that before. It's great.

Yeah, you and I both love social media. Some people, like Dr. John Deloney, he's like, I don't need to be scrolling. I don't like it. But I grew up in the social media era. I mean, my life was on social media. You know, my AIM username, like, that was how we communicated. It was Ardo 7-E-E-L-E-W-W-E-E-E-E-E-E-E-E-E-E-E-E-E-E-Lose-E-E-E-E-E-Leads of the Al-E-E-E-T-E-E-E-E-E-E-LBERs. How do you spell it?

Oh, okay, Arto. 7-1-1. 7-1. We're the 7-1-1-1-compan. I love 7-Eleven, the convenience store, and my initials are the seventh and 11th letters of the alphabet. G.K. Do you know?

My mind was blown when I found that out. I was going to say, do you know that's like a very, like, Hebrew-Greek thing that they would do, like back? I learned that. Do you have a conspiracy theory about this? Do I wish I did? But there is a lot of things connected with letters. It's for another episode. George, you're on that track.

I'm on the list. Great. Great AIM name. Back to social media. So here's where you find yourself. You're scrolling and you're going, oh, that must. be nice or that vacation looks great or man of course their family photo is perfect and whenever you find yourself feeling those feelings i like to go should i be following this person especially if they're like an influencer and you feel like oh my gosh i just want to be that person or if it's a friend

that you hate follow have you ever done the hate follow no tell me about the hate follow this is where you follow someone out of hatred basically wait and you're jealous of their life and you go oh gosh it's a real thing just keep you know what the people watching they know they know okay you're just a very you love one, Rachel. No, I'm just thinking through. I mean, there's like one or two that I follow, but I don't know if I hate them. No, no, you don't have to hate them.

But there's a piece of you that follows them out of spite or jealousy or whatever the thing is. And so, unplugging and, like, something I like to do is get back to the roots of not being on screens. And I'm not full John Deloney. I love screens. Yeah. I love them.

But what I'll do is I'm going to go take a walk with my wife around the neighborhood, no phone. I'm going to play guitar for a little bit. I'm going to do things that can kind of center me instead of get my brain rolling going, I'm never enough. I'm never enough. I've got to do more. I got to do more. That's where it spirals. Oh yeah. The spiraling thing, very, very real. It's real. Okay, so you're like the champion of having fun. Wow, thank you. It's a big title. I know. I heard the title for you and I thought, I mean, I think I could,

I think I could be up there with you, George. I can't help it. Like my brain is, the synapses that are firing are constantly going, I know there's joke in here. When's my time to make a joke? When can I have some fun? When can I let the room be entertained? Yes, well, champion of fun. I love it. So, So how does that help us in this whole mindset? Well, I strongly believe that you can take your life seriously without taking yourself so seriously. And a lot of people, they can't disconnect the two. And so their whole life is just this tense moment of, I need to succeed.

And that's great. I mean, we both love success and we both love to grow, but you can do it while having fun along the way. So don't forget to have fun. And the same is true with money, right? We tell people to budget and sacrifice, but there's so many amazing, joyful moments in that process. And sometimes you get to hear those in those debt-free scream stories of the way they grew together by having fun and finding silly little ways that didn't cost a lot to do that.

So that's something I always want to encourage you to do no matter where you are in your journey, have some fun. Don't take it so seriously. I love that you're the champion of fun. That's a big title. It's a good title, George. It's an honor. But truly changing from that fixed mindset to a growth mindset is one that anyone can do. Again, maybe you have people in your life to help you do that.

But I think focusing on that, you guys, it is big to grow. don't stay in that fixed mindset. So, George, thanks for coming on. Always a pleasure. So appreciate it. So where can everyone find you? Well, you can always find me on Instagram and Twitter at George Camel with a K. And you can listen to Season 1 of The Fine Print.

We've got 11 episodes on the Ramsey Network. Just search for the Fine Print wherever you check out your podcasts. We're going to dive right in to talk about taxes. That's right. All the things you need to know when you're filing your taxes for 2022. So the standard deduction for 2021. increased to $12,550 for singles and $25,100 for married couples filing jointly. And the income tax brackets did increase in 2021 to account for inflation.

So let's talk about some tax credits from 2021. So the earned income tax credit is a credit design to help with low and middle income households. So if you're under the maximum income level, this credit could save you anywhere from a few hundred dollars to a few thousand dollars on your taxes. So if you're single with no kids, you can claim this credit if you made less than $21,430. If you're married with up to three kids, you can claim this credit if you made less than $57,414. And then about one out of five eligible taxpayers out there don't even claim this benefit or file a tax return. So do not let that be you. And if you have kids, you probably notice surprise from the IRS in July, you got some money.

The American Rescue Plan was passed in March and it bumped the child tax credit from $2,000 to $3,600. for each child under the age of six, and to $3,000 for each child six to 17. And rather than waiting until it's tax time, the IRS started sending out some advanced monthly payments. That's the check you saw in July. And this credit is gradually phased out for people with incomes over $150,000 if married filing jointly, or $112,500 if filing as head of household. But remember, they were basing all of this on last year's income. So if you got a raise this year and you were over that amount, you may owe some money. So be on the lookout for that. And there are plenty of other deductions and credits out there that you can use to hopefully

benefit you when it comes to tax time. So you can use our Ramsey Smart Tax to work with one of our Ramsey trusted tax advisors to make sure that you're not leaving anything on the table. Now, there's also tax withholdings, and this is the chunk of money your employer sets aside from each paycheck to cover your taxes. And if you withhold too much, then you're going to get a tax refund. If you withhold too little, you're going to be sending a check to the IRS. But really, the goal here is to get to zero. I don't really want you owing a ton, and I also don't want you getting a huge refund. So here's how you can get it as close to zero as possible. All right, step one, estimate your tax liability or how much you'll owe. The IRS provides worksheets and a calculator to walk you through this process. It's kind of like completing a pretend tax return, but it really helps.

Step two, you subtract your estimated tax liability from your tax withholding. If you're in the black, you'll get a refund. If you're in the red, you're going to be paying the IRS some money. And step three, adjust your withholding. So as quickly as possible, go and file a new W4 with your employer. and on your W-4, you can also specify additional withholdings. So how much? Well, you divide your estimated tax shortage by the number of your pay periods left before

the end of the year. Federal taxes are not automatically deducted from self-employment income. So if you have a side hustle, remember that when it comes to figuring out your taxes. And if you get stuck along the way, you can get help from a tax advisor look for a Ramsey trusted tax advisor or use Ramsey Smart Tax and let the stress cut off your shoulders. Again, we're here to help you because really that goal when it comes to tax time, again, is not to owe a bunch of money, but also not to let the government hold your money because if you get a tax refund, people think, oh, it's free money. It's so great. No, it's not free money. It's money that you have

worked for. And I would much rather it be in your hands for you to pay off debt with that money or build up your emergency funds or even invest it, you can do so much with that versus letting it sit in Washington, D.C. So taxes can be confusing. So again, having people next to you, walking with you through this process is so huge. So go to ramsese solutions.com slash smart tax to learn more. Well, I want to thank George Camel for being back on the show.

And I want to thank you guys so much for listening to this episode. If you have not subscribed yet, make sure to hit that follow button for the Rachel Crewshow podcast. and if the spirit leads, you can leave a review. As always, make sure to take control of your money and create a life you love.