The Rachel Cruze Show - How to Make Progress on Your Money Goals in a Down Market

Episode Date: September 26, 2022

This episode is all about being as smart as possible with your hard-earned income! We’ll talk about what to do when the market’s down (hint: don’t panic) and how to pay off your debt in less than two years so you can start building wealth for the future. Then, we’ll wrap up with a conversation on buyer’s remorse and how to avoid it at all costs.   In this episode: ·      8 Best Financial Practices to Have in a Down Market ·      How to Pay Off $23,000 of Debt in Less Than 2 Years ·      6 Ways I Avoid Buyer’s Remorse   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. Visit megaphone.fm/adchoices

In order to make progress with your money, if you're not happy with the current situation you're in or you're feeling the pinch of inflation, there may be things that you have to do in the short term to really get that long-term piece. So it is worth it. I'm telling you, it's not going to be forever. Hey guys, welcome to this episode of the Rachel Crewe Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about how to make progress on your money goals, even in the midst of a down market. I'll go over my checklist to help you, avoid buyers remorse because we've all been there, but we don't have to make it a habit. Then I'm going to go over how to pay off $23,325 in debt in less than two years.

But first, let's talk about eight of the best financial practices to have in a down market. Take a listen. So the consumer price index, which is a key measurement of inflation rose 9.1% in June of this year, according to the U.S. Department of Labor. So this is the fastest pace of inflation since December of 1981. And we keep here on inflation, inflation, inflation. Okay. Why it's important to know is because it does directly affect us, the consumer,

which I know you feel day in and day out when it comes to your money. But here's what's fascinating. According to researchers at the Heritage Foundation, it amounts to $3,400 yearly of an income decrease for the average worker. So when you look at everything together, the average person in America makes $44,000. So if you subtract $3,400 from that, then you get $40,600. So, I mean, it's a pretty big decrease, you guys. You feel that in your paychecks when you go and you actually have the money and see,

okay, what is my money actually worth now? And so it can be scary because there are things in life that you just can't control. and we cannot control inflation. We can control what we do with the money we do have and be smart about it, but it can be really, really difficult. So I wanted to give you guys some tips and some things to think about

when it comes to staying in control of your money and what feels like an out-of-control situation, like a down market. So here are some best practices for you to take in, especially if you've lost $3,400 annually due to inflation. Number one, budgets. You knew I was going to say it, but I'm going to keep beating this drum. It's going to be easy to just float through the month, spend money where you feel like you need to spend, and you are not the

one that is really controlling every single dollar. So every single dollar needs to be stretched as far as it possibly can these days. And a budget is going to be the thing that's going to help you. It is your roadmap. Now, check out every dollar. It's our budgeting app. We have lots of tutorial videos in there to really explain how to do a zero-based budget. but this is one of the best habits you can get in. Number two, cut back on expenses. So when you're doing this, remember, this is not forever. This may be just for a period of time until prices maybe go back down or your income goes back up, something changes in your life. But when you cut expenses, look at the things that you really just don't need. And those needs versus wants is

really important these days. So there are just wants that we have that we think our needs, but aren't. So go through your budget and see, okay, where can we cut? Even if it's going to be for three or four months, maybe just think in January. Maybe we can pick it back up. But for a few months, just to get in control cutting some of those expenses. Number three, do your research on insurance. This is an area that you can save so much money. We find this here at Remsey's solutions all the time that make a really big splash because things like your insurance policies, there are things that you just pay for, whether it's quarterly or annually, and you just stay in the same rhythm, and you never check and look at rates. So look at all of your insurance rates,

because you can actually save thousands of dollars by maybe even switching your coverage, if you can, or even companies, because you'll have a better rate somewhere else. Number four, take a serious look at lifestyle inflation. So we talked about cutting expenses, but it is just funny to me when things come into our lives that you just feel like, oh, yeah, it's just part of the rhythm. whether it's like Amazon Prime or, you know, Disney Plus, or these things that we didn't have, even five, six, seven years ago, but now they're just a part of our budget and our lives that we really still don't need. So look at it because also if you get a raise and maybe you're

making more money, maybe you switched industries from 2020 and you're working somewhere else and you're making more money, naturally when you have more money, you're going to want to spend more money. So making sure that you are in a good financial position before you're, you increase your lifestyle. Number five, stop impulse buying. So we always joke about it, and I'm guilty of this, of like, oh, I go into Target for toothpaste, and I walk out spending $258, you know, and all this stuff or whatever it is. Like there's jokes about it, you know, on Instagram I see, or people, you know, friends talk about it. And it's become a joke. But for real, you guys, for real. If you are looking at every single dollar, you have to be diligent. So the impulse buying,

it has to stop. You have to really be able to say, why am I buying this? Was it planned? Is it in the budget? Number six, don't shop at certain stores out of habit. So ask yourself, if I shop somewhere else, could it be cheaper? Grocery stores are a great example of this. Depending on the store, the prices can vary greatly. So look to see, is there a store that I can shop at that I can get a better deal? And even if you don't know your way around it, I know there's some things out of convenience, But if you really are looking to save money, this is a great option. Speaking of grocery stores, number seven, meal prep, and find ways to stretch your meals. So food will always be a budget buster for majority of people.

So if you can figure out, hey, what food do we actually need? What's in our freezer and our pantry this week that we can use as part of a meal? Anywhere you can save money, that is key. Number eight, don't view financial sacrifice as being beneath you. So it's really hard when you're living at a certain expectation, right, a certain lifestyle and an expectation that I think culture is set for us. You're here. And you're realizing, gosh, it's so tight.

I feel like we're just living paycheck to paycheck. Nothing's budging. Nothing's moving. Something has to change. So whether that's picking up an extra job or a side hustle or it's cutting expenses, like any of those things that take you out of your regular rhythm with your money is going to be so important. And again, it feels like, oh, I shouldn't have to do this because I work hard and, you know, I've been doing great at work and I'm making great money or whatever the

case may be. Before that moment for you to get in control, there's probably going to be sacrifices involved. And it's not going to be forever. And there's so much that goes into this, you guys. Again, it can feel like, oh, I'm not going to take that on over there because, you know, whatever, how it looks or how it feels, I don't want to do that. But in order to make progress with your money, if you're not happy with the current situation you're in or you're feeling the pinch of inflation, there may be things that you have to do in the short term to really get that long-term piece.

So it is worth it. I'm telling you, it's not going to be forever, not going to be forever, but maybe needed in this moment. So I know it's hard, and again, some people are struggling more than others. Some people, this is their wake-up call to realize, oh, wow, $3,400, that swing feels like it's taking me out and I'm feeling it. So whatever it is, just know that you can, can get in control of your money. Just know you can get yourself out of debt and have margin

back in your life. You can start to build wealth. You can change your legacy when it comes to money. These things are possible, but it is up to you to say, what can I control and focus on those things? So today we're going to talk about how to pay off a crazy amount of debt in less than two years. So this is something we talk about a lot and we say, you know, you can pay off debt. On average people are doing the debt snowball in 18 to 24 months. And I hear some people be like, wait, what? So listen, different income levels, different debt levels. But I want to boil it down and actually give you the math. And the problem is, with inflation and everything costing so much, debt continues to be a huge problem today. So let's look at the average American out there. So the

average amount of debt for one American adult is about $58,604. Now, that includes your mortgage, which if you're doing the Ramsey Baby Steps, you don't pay off your mortgage in the debt snowball. So if you look at just consumer debts, then that means the average person owes $23,325. Now, with the median income for one single person is around $44,000 in America today. So when you look at all of that math, let's break it down and how they can do it in two years or less. Now, big disclaimer here. This is just an example, okay? Your numbers may look totally different than all of this,

depending on where you live, how much debt you have. So don't get on the comments. I'm like, ah, my gosh, Rachel doesn't know what you're talking about. Listen, it's going to look different for everyone, okay? So let's say for this example, that this person wants to pay off all of their debt in 18 months, and they make $44,000. So if that's your gross income,

you have to remember taxes, and that's going to vary state by state. So if you were to pay off $23,325 in 18 months, that means that you are going to need to put about $1,300 a month towards your debts. And your monthly income on that salary would be $3,666. So is that even possible? If you just bring home $3,666 to pay off all of that debt. Well, let's break down the numbers.

First, you want to look at expenses and what you can cut. So the average car payment right now is around $554. So let's pretend that you sell that car. That frees up. Yeah, lots of money per month. Now, Americans spend on average $280 a month eating out. So let's just say you cut that. Average monthly cable bill is about $78 per month.

So let's cut that. Now, if you cut out all those things, you're already saving $912 per. month, which is a huge jumpstar, you guys. Like, this, this feels good. This feels like progress. Now, there are plenty of other areas that you can scale back or even cut out completely. So think about it. A hair salon visits, grocery stores, streaming services, impulse buys, gym membership, new clothes, electronics, subscriptions, vacations, there are so much that we spend money on that are really wants, they're not technically needs, that, again, for this amount of time to pay off debt that you can cut. So I want you to take a closer look at your own specific

and say, okay, what am I willing to sacrifice? Now, these changes, again, are temporary. I don't want you to live like this forever. So once you're out of debt and you have margin again, you can breathe when you have no payments. Okay, we looked at the expenses side. Now let's look on how you can make extra money per month. So you can actually flip and sell furniture. And if you refurbished two pieces of furniture per month and made a $100 profit, each time you did that, then you'd have an extra $200 a month. You can also make $120 to $160 per day shopping for Instacart. So let's say you did that twice a month. Then you can make $240. So look, $900 that we cut out from expenses plus $200 plus $2.40. So that equals $1,352. So that's over the savings goal that

you want per month to pay off your debt in 18 months, which means if you did this, you'd pay it off faster than 18 months, which is amazing. Because one thing that we find, too, is that once you're doing this, that motivation kicks in, you guys. And at first, we're like, oh, let's keep this, this, this and this while we're doing this journey. And you get in, you're like, wait, if we cut that for two months, we could be that much further ahead. Oh, yeah. And people start sacrificing more and working more because as the ball starts rolling, you get that much more excited because you're tasting that freedom, that idea of my paycheck hitting my account, and nothing's leaving it except me deciding, not Bank of America, not Toyota, but me. There's something so powerful

about that. So again, in this example, yes, you are cutting things and you're also making extra money. So you can also do other things. You can just look around your house and say, hey, I just want to sell stuff. We all have so much crap in our house that we don't use that you can make some money off of. So you could do this with Craigslist, Facebook Marketplace. There's even ways to make money by tutoring online. You could drive for Uber or Lyft. You could rent out your car. You could rent out rooms in your house with Airbnb. You can walk dogs. You can nanny. You can clean and organize homes. There are so many ways to bring in some more money. Now, I did a recent video on how to save a ton of money quickly where I talk about all of these things. So I'll put a link

to that in the description below. And again, this might look a little different for your situation, again, numbers or what you can and cannot do, all the things. But just know that it can be done. Okay, we talk to people every single day that are doing this. And keep in mind that when you get six months

to a year into paying off your debt, some of you might think, oh my gosh, this is feeling like forever. And you actually might start losing momentum when you're deep in the journey, but don't give up. keep at it and have quick wins, you guys. Like, have these moments of celebration,

that it doesn't have to be the very end of paying off all your debt, but have these milestones, these markers throughout the journey. They say, if we can just get to that. That's how I always am. I walk my kids to school because we're so close to where we live, and I'll come walk back with my five-year-old and three-year-old because we drop our second grader off and we walk back. And they're like, Mom, it's like I'm making them hike up Mount Everest

every time we do this. I'm like, y'all, you're fine. We're going to walk up, this sidewalk, up this bike bath. And I always tell them, I'm like, just go to that light pole. Run, run to that light pole, and I'll catch up. And then we meet the light pole. And I'm like, okay, go to that street sign. And it's like having these markers along the way are so helpful.

It's these quick wins. And so have that if you feel like you're losing motivation. But just know, you can do this. And if you want help along the way, if you want motivation, I really recommend going through Financial Peace University. This is the money class that everyone should take because it's going to give you the basics. It's going to give you the motivation to be able to know, step by step what to do.

Because anything in life that you're learning new, you need someone to help you. I mean, I feel that way, whether it's with parenting and marriage, all this stuff, I'm like, I want other people who are experts, who know what they're talking about to speak into that area of my life. And that's what Financial Peace University can be for you. It can be that class that walks right beside you, all the videos, all the information you need,

say, hey, I want to teach you how to do this so well. So I'll put a link in the description for Financial Peace University. So make sure to check it out. And remember you guys, it's possible. You can do this. You can make a decision today to do something different with your money and start working your way out of debt. So at one point or another,

I think we've all had buyers' remorse. Yep, when you buy something and then you have serious regret about it later. Because we all buy crazy stuff, but then when you hear other people's experiences, you're like, okay, I don't feel crazy. Because, listen, we've all done it. We've all done it.

I sell this fashion blogger. and she had this cute, like, sweatshirt-type, kind of crop-top, high-waisted shorts, like lounge wear. And I thought, I can do that. Got it? Nope. No, I can't. No, I can't. Oh, we all buy stuff that we think, oh, yeah, that'll work.

And then you're like, no, what a, no? Gosh, it is. It's terrible. And the worst part is you spend money and then you regret it. And if you can return it, obviously, that's wonderful. But sometimes you can't. And it's just like, dang it, why did I do that? So we want to protect ourselves against that.

so that we can save money, and especially during this time with inflation, you guys, how expensive stuff is. More than ever, we have to be aware of this. Now, a lot of people struggle with it, okay? So that's the good news, so you don't have to feel alone. But also, we want to know how to be wise. How do we purchase things with wisdom that we know we're not going to regret later? So here is my pre-purchase checklist that may help you avoid buyer's remorse.

You're ready? it's actually stuff that I ask myself before I buy stuff because I've been in this situation part too many times. So number one, do I have the cash to pay for it right now? So this is important. This is, because this means if you've got to go into debt for it, it's an automatic zip. Nope, nope, nope, nope. So for me, number one, I'm like, it's not an option. I'm never going to go into debt, let's be honest, in the situation. So for me, I'm like, okay, if I don't have the money right now, I got to just put that, I put that aside. I put that aside. But if I do, then we move on to number two. Even if you have the money, is it budgeted for?

This is a big one because you can kind of finagle and be like, yeah, well, the money's there. But listen, if you have a budget and you know where every dollar's going, that means everything else has been allotted, which means you either have to change your budget and if you're married, you have to agree with your spouse on it, or you have to say, okay, I'm going to put a line item in the next budget and figure out if I can buy it then. Ask yourself this other question. Number three, will I use it? And this is a big one.

Now, I'm sure your intention always is that you're going to, but I have learned this for me with purses specifically. I will see a cute purse. I'm like, that is so cute. I know I'm going to use that. And then I buy it. And do I use it? No.

I use the same dang purse that I always carry around because I'm not switching purses all the time. I don't have time for that. So now I have learned. I'm not buying, I'm not going to buy a purse. Probably not. in a long time, probably won't be purchasing a purse, because that's usually where my buyer's remorse is. So you really have to think through. Think through your life day to day,

am I really going to use it? All right. Number four, how long have I been wanting it? Have you wanted it one minute, 60 seconds ago? Yep, take a breath, girl, take a breath. Wait it out. Wait it out. Now, if you've been wanting it for like two weeks and you're like, okay, I've really been sleeping on it and it's something I want, then that's a good filter. All right, number five, if nobody sees it, do I still want it? That's a little stab in the heart, right? How much of your motivation to buy it is for other people and to be complimented and affirmed and all of that, right?

If that's your motivation, it's probably not great. But if you think, no, I still want it, I don't care who sees it, but I want this for me, then we can move on. Number six, how long have I known about it? So a lot of social media influencers, they're pushing like really trendy things, and you're like, oh my gosh, I never knew that existed. Now I feel like I need it. No, you didn't even know it existed like two minutes ago.

So, again, wait it out. The biggest thing here is time, you guys. Give yourself time. And if you're still wanting something, then the idea of buyer's remorse probably gets smaller and smaller. So, I mean, this is, it's a tough one. And I'll say this, for me, buyer's remorse recently has been through things that I have forgotten about because subscriptions, they are like my enemy. I will sign up for something and have no idea, like two little boxes were checked.

And then they renew. I got hair products sent to me in the mail. I got a shipping confirmation. I was like, I didn't order that. No, but I had ordered it three months ago. And they put me on a quarterly or every, you know, three, four times a year on their subscription. I was like, no, I don't need this. So then I had to call and cancel.

And then it happened again. No lie. Happened again. And I was like, stop it. And then I got an app, the same thing. It renewed. And I was like, what is happening? So I'm just not an organized person.

I need to do better, you guys. That is like my fault 100%. But that's where my buyer's remorces are. So if you're getting a subscription, heads up, look to see, am I checking? Am I checking that they're going to keep me in this dang loop?

and I have to keep buying this stuff. So it's hard. It just sucks when you spend money and you're like, I don't want that. Or I didn't want that. Or I didn't know I was doing that. So we have to be diligent and intentional. So I want to know your tips

about how to avoid buyers remorse. So if you have them, put a comment below because I want to know. And also share this with a friend who loves to shop and you know, man, I know you love to shop, but you also know they want to save money. Oh, man, buyers remorse, you guys.

It is a real thing. Honestly, if you just become even more intentional, ask yourself these questions. It is going to help you, I promise. All right. Thanks so much for listening to this episode, you guys. And if you have not subscribed to this podcast, make sure to hit that follow button. 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.