The Rachel Cruze Show - How to Save $1,000 Fast

Episode Date: January 20, 2020

We’re kicking off the new year with a special series covering the Ramsey Baby Steps. So let’s start at the beginning! Baby Step 1 will be your first step toward never worrying about money again: Save a $1,000 emergency fund.   In this episode of The Rachel Cruze Show, you’ll learn:   How to cover unexpected expenses when they pop up 26 super specific ways to save $1,000 How guacamole changed my mind about money   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: Zander Insurance My Favorite Budgeting App Financial Peace University Learn more about your ad choices. Visit megaphone.fm/adchoices

Medical bills really have traumatized our future. Stories of people who are starting to see real life change. We really wanted to tackle those debts. This is the buffer between you and life. It's become really a way of life. All five kids have had an opportunity to go to college debt-free. Hey, everyone, welcome to another episode of the Rachel Cruise Show podcast. I'm so glad that you're here.

And today is going to be fun because we are going to talk about your very first step to never worrying about money again. So this is the first step on a journey for you to take control of your money. We're going to start a brand new series today walking through the Ramsey Baby Step. So there are seven of them, and it is a proven plan that has helped millions of people win with money. So today's the first day of the series. So we're going to start with Baby Step 1, which is a $1,000 starter emergency fund. We're going to deep dive into this step.

And also in this episode, we're going to talk about ways to cover your expense. when unexpected emergencies pop up. And I'll answer some of the most common money questions I get from people just like you going through the Ramsey Baby Steps. And then last but certainly not least, I have Dr. Caroline Leaf on. She's a neuroscientist, and we're going to talk about how to shift your mindset during this process. All right, I love Baby Step 1 because it really is the buffer between you and life. And $1,000 may seem like a lot, but here are some ways that you can save for it.

And if you want to keep track of your progress, make sure to head to the show notes of this episode to get a free printable that you can color in as you go. All right. Some quick ways to save $1,000. Are you ready? Cut out all non-essentials. Make a budget. Use cashback apps. Use energy efficient lights. Brew your own coffee. Pack your own lunch. Meal prep. Wait 24 hours for a big purchase. Shop your insurance rates every year. freeze your spending temporarily do a no-spin challenge. Order water at restaurants. Switch grocery stores. Try things like Aldi. Buy generic. Use gift cards at Kroger. And then you can use those points to get gas. Use your instant pot instead of going out for dinner when you're too tired. Carpool to work. Pay with cash. You actually spend less when you pay with cash. Save loose change. Sell your kids' clothes at consignment stores. Sell things that you don't use anymore. If you haven't used or warrant something,

something in the past year. Sell it. Sign up for free customer reward programs that are not credit card based. Stick to your grocery list. Find restaurants where kids eat free. Cancel unused subscriptions. Do your own lawn care, cleaning, nails, hair, all of that. Go have a yard sale. Keep selling some stuff. And finally, if you have Whole Life Insurance, you need to switch to term life insurance. So term life insurance is a policy that you take out. in the event that something happens to you, your family gets a specific amount of money that is previously decided on.

Now, there are several different options you can choose from, and I suggest you get a 20-year policy that is 10 to 12 times your annual income. Now, a lot of people treat their whole life policy as an investment rather than insurance. So you should not treat these the same, okay? Your investments and your insurance should be separate. And whole-life insurance costs you so much more money over time,

and the coverage is just not as good. Now, if you already have a whole life insurance policy in place, you can cancel it, cash it out, get your money back, but only do this after you've gotten a term life policy in place. Now, I recommend using Zander Insurance. They make everything really easy for you, and they shop around for the best rates to keep the costs really low. So make sure you visit zander.com to get started today.

All right, $1,000 emergency funds, you guys, baby step one. this is the easiest step of all the baby steps, but it's also the hardest. It's the easiest step because it's $1,000. Now, that may seem overwhelming to you, but it doesn't have to be, okay? Look at your budget, go to the last few episodes when we talk about budgeting, cut some stuff out. It's great. You can get $1,000 really, really quickly. But it's the hardest step because it means that you are changing. You are changing the way you are dealing with your money. You are changing the way you are viewing your money. I mean, everything is about to change. And no one likes change.

Change is uncomfortable. Change is hard. It's not always fun. But there was a moment for me where that change happened. And I talk about it in Financial Peace University. Here it is. All right, confession. I am a spender.

And I hated budgeting. That's right. Some of you probably just like fell out of your seat. That Dave Ramsey's daughter hated budgeting. But it's the truth. It is just not naturally what I'm good at. kind of like not great at details and just the idea of budgeting was always so hard for me to grasp. I actually could understand it, but doing it is what was difficult. And I can even

remember when Winston and I, my husband, when we were engaged, we went to premarital counseling, and even our premarital counselor said, you guys should do a mock budget together. I was like, how much did my dad pay you to say that? Because I was like, oh my gosh, I know we need to. just doing it is so hard. And so when Winston and I got married, we didn't budget. We didn't budget for like the first six months of our marriage. And then finally one day, Winston came to me and he was like, Rachel, we need to do a budget together.

And I just remember thinking, oh, you're one of those, aren't you? But I was like, okay, I know. I know I need to. We need to do this together, just doing it like, oh. I was like, okay, let's do it. So I remember we sat down in our little content. that we were living in at a kitchen table, and we did our first month's budget.

And you guys, it was a disaster. Like, it was terrible. I think we budgeted $50 for food or something for the whole month. Like, it was so bad. The second month, I remember it got a little bit better. We learned from our mistakes. We're okay, let's adjust these categories. But it was still a little rough.

The third month, it actually started working. So much so that we were like, oh my gosh, this is great. this is what living on a budget feels like. This is amazing. And Winston and I are not perfect with money, but I can confidently tell you that we've done a budget pretty much from that point ever since. So much so that a budget became a part of our life

that we took a trip to Florida one year. Before we had kids, it was kind of our last big hurrah. And we were flying down to Florida, and Winston looked over at me in the plane, and he was like, hey, Rachel, listen, I want you to relax on this trip. I don't want you to worry about anything. So you don't have to think about the budget at all,

and you can just spend money. Mm-hmm. Yes, he did. Yes, he did. I was like, wait, what? I was like, for real, you don't have to think about the budget. And I can just spend money? And he was like, yeah.

I mean, if you're bumping up against the trip budget, I'll let you know, but yeah, just enjoy. I gave him the biggest kiss in the world. I was like, babe, you're letting you. me live in my strengths. Like, this is what I'm good at. And I remember we got down to Florida, checked into our hotel, went out by the pool. And it was one of those pools where, like, waiters and waitresses, like, walk around. And you can, like, order drinks and food to your seat at the pool. It was awesome. And so this waitress walked by, and I was like, hey, ma'am,

do you guys have guacamole? And she was like, oh, yeah, sure. I was like, oh, I love some. Thank you. So she brings it. I'm eating it. It's delicious. And I was getting thirsty. So I asked her then, can I have a menu to look at the drinks? So when I opened the menu, the first thing I see is appetizers. I was like, oh, and I see chips and guacamole. $23. Mm-hmm. $23. I was like, did the avocados fall from heaven? Like, what makes guacamole $23? I was like, it's okay, Rachel. Just spend the money. Just spend the money. So then I go down and I see drinks and I see lemonade. I was like, oh, that's great. In my head, I thought, that's what I want to order. and I look over, $18.

I thought, what? This is crazy. And at that moment, the waitress was right in front of me, and she said, okay, what would you like to drink? And I just had this battle going on inside of me, and I remember thinking, Rachel, just spend the money, spend the money. Like, go back to your roots. Go back to who you were.

And I looked at her and I said, I'll take the lemonade, please. And she brought it over and I took a sip and I was like, well, that was $1.50. And in that moment, I started spiraling. I started freaking out because in my head, I was like, I just spent so much money on pool snacks that tonight at dinner we can't get an appetizer. We're going to have to go to Walgreens

and buy granola bars for breakfast. Like, what have I just done? And I was just panicking. And in that moment, I realized, I was not panicking because of all the crazy, expensive prices at the hotel, even though it was ridiculous, I know. But I realized in that moment,

that this was the first time at that point in years that I felt so out of control of my money, that I had no clue where my money was going. And that's the moment I realized that a budget does not limit your freedom. A budget gives you freedom. A budget gives you permission to spend. So I'm telling you guys, this is going to completely change the way you handle money because you're going to have control. But if you've never done a budget before, give it three months to get into a rhythm, because it's going to take some time. Winston and I totally are a testimony to that. It takes about three months. And you also will realize that money is relational. You have to do this with your spouse. Or if you're single, find a friend who is good at money who can look over your

budget with you. Okay, now we're going to hear from stories from people just like you who are starting the baby steps. And we actually went to a financial. Ancient Peace University class and interviewed a bunch of people who are starting this journey. And it's fascinating hearing their stories. But I always think it's interesting too because a few of them are second generation, Dave Ramsey, Ramsey Solutions, Baby Steps, people, if you will. It's like the second generation because their parents did the plan, but they didn't necessarily follow suit. So I always think that's fascinating. All right, check out their stories.

We had our son who had medical problems, and medical bills really have traumatized our future. So we really wanted to tackle as much as we could to handle those debts and to get them down as quick as possible. So the financial piece was the best way we saw fit to do that. We started this class, mainly so that we can live our dreams out later down the line. So we could give our kids, you know, a better future and show them, you know, whatever comes our way in life as far as the financial or any burdens that we're handling them. I grew up with my dad always talking about Dave Ramsey says this and Dave Ramsey says that. And my parents, I think going through Financial Peace University when I was so young,

saved for a college fund for me and so totally had no student loans. to pay off. So I actually don't have any debt. But now being in the class is kind of fun because I get to apply the things that I already know and that I've already learned in my own personal finances. I can remember my parents doing financial peace when I was younger, knowing that was great for their marriage and for us as a family financially. And so now that we just got engaged and so we're doing it together. The funnest thing for me, though, was the conversations that we've had about our budget, finding out who is the nerd, who is the free spirit. They've gotten me excited about our marriage and taking charge of our finances and getting

on the right foot. I love hearing stories of people who are starting to see real life change. I mean, I'm sure a lot of you can relate some of what you just heard, and I really want you to have that hope to. And I love they've plugged into a financial peace university community. It always amazes me how quickly people can see the light at the end of the tunnel. Now, some of them had some questions for me. So let's see what they are.

A question that we would have saying that we have a little bit of credit card debt and a car payment heading into our engagement and into our marriage. So we would love to know if there's any other advice or any other thoughts that you may have for us as we move into marriage together. Yeah, I think just if there's anything for specifically for an engaged couple moving into a marriage, if there's any specific financial advice or conversations that we could have on the front end, that would be great to know. Oh, engaged couples, they're just the best, right? The list for the reality of what they're about to walk into. Marriage is awesome, but it's more awesome when you are on the same page.

So a couple of things I would say if you are engaged out there or to this couple specifically, keep your money still separate. Until the day you say, I do, do you need to combine them? So I don't know whose credit card debt it was or whose car loan, but you keep it separate. You start working the baby steps on your own. And then the beautiful thing is, when you get married, then you combine it all together. So I hear a lot of couples say, okay, well, maybe it's his car loan and his credit card debt and she doesn't have any payments.

Well, for her, she could just be saving up a lot of cash. And then once they get married, she can use some of that money, pay off his debt. And together, they're moving on together. So again, keeping things separate until you say, I don't. do is huge. And also, I would say, don't go crazy with the wedding. Really, it's like one of the things people spend so much money on that, yes, you want to have fun, you want to enjoy your day, all of that, but do not go overboard and definitely do not go into debt for the wedding. All right, here's the next question. What advice can you give to keep us motivated going through our debt snowball?

So staying motivated through baby step two can be really difficult for a lot of people, especially if you have a lot of debt. And if it's things like medical debt that you see that, you're like, man, I can't sell it, right? Like a car loan, you're like, hey, I could choose to sell the car, get out of that debt really quickly. Medical debt is something that does seem to string along. But I would say have some quick wins within the big chunk of your medical debt. So look at your medical debt almost as a separate snowball and just kind of separate it out. It's okay, this is what we're about to tackle. Like, it's a huge mountain. There's so much there. But put some mile markers in place and have some celebrations throughout it because you want to be able to feel those quick wins even when the bills

are staggering and it seems like that there's so much money there. Having those quick wins is going to be so helpful. All right, coming up next is a story of the couple who is actually coordinating that Financial Peace University class. So here they are. We have been married for 28 years and we purchased a house when we moved here with debt and we decided that we wanted to pay that debt off early and based on some things that we had heard Dave Ramsey talk about. And so we got on that road and went down that path and we paid off our house within about 10 or 12 years after we moved here. And that just really started our process of wanting to be completely debt-free. So it's become really a way of life. We've put all five kids have had an opportunity to go to

college debt-free. We have a fun for their wedding fund. So when each one of them has gotten married, We've been able to fund their wedding without going into debt. And it is kind of amazing to see how when you have the extra money to sock away in the 401k and savings, that there's not much pressure. There's a lot of peace just to know that we've been able to bless our children and then we'll be able to retire with a lot of dignity. And now we're just living the life that Dave has told us about. And I would say that we were pretty nerdy about it. We actually enjoy our budget.

After doing this for 20 years, we've got 20 years worth of data of what our expenses and income is. And so we sit down the first of the year and do it on a big spreadsheet. Then we just really touch base each month to make sure where we need to be. But over that period of time, you know, we've had a car fund, so we haven't had a car debt. So to be honest with you, we actually have two, we own two homes debt free. I think we got people's attention the first night when we looked at them and said, this works because we've done it. And you can do it too.

If we can do it, you can do it. So we enjoy seeing the success and seeing the plan work. And it's really neat to sit in the class. And our classes as maybe unique, I don't know, because we've got some older folks in there. We've got some folks that are just married. We've got some folks who are engaged. And it's really neat to see the light bulbs come on

and to kind of pay it back a little bit and to share what we've learned. And that's fun just to be a part of knowing that we've helped them on their journey. All right, after hearing those stories, I hope you guys are ready to go out and save that thousand dollars right now. But listen, when we talk about money, you can kind of look at the subject that touches kind of like all parts of us, right? You hear the phrase body, mind, and spirit. And I kind of think of like, body is like, okay, yeah, you're doing the tactical

stuff. You're getting the extra job. You're selling stuff. You're getting out of debt. You're doing the budget. The spirit part, we talk a lot about the heart behind money and things like discontentment and comparison, but there's also the minds. The mind is a powerful thing, you guys, and we don't talk about it a lot. So that is why I'm bringing on our next guest, Dr. Caroline Leaf. She is a neuroscientist, and she is brilliant, because you're going to see the difference, even between a brain and your mind and how powerful your mind is, you guys, the mindset that you have to have going into this, and even the change that has to occur with what you think about money, how powerful it is. that can help you in the baby steps.

So I got on a call with her, and so the audio is going to be a little bit different. You'll hear it, but it's totally fine. And it was just such a great interview. So I hope you enjoyed this interview with Dr. Caroline Leif. Well, thank you so much, Dr. Leif, for coming on the show. I really, really appreciate it. Oh, it's my pleasure.

Thank you so much for inviting me. You're just, you're incredible in the work that you do. So people that are not familiar with you kind of give like a little bit of background of who you are and what you do. So I'm a cognitive neuroscientific. scientist and communication pathologists. And what that means basically is I've studied the mind and I'm a mind specialist. I've spent the last 30 years researching how the mind works and the mind brain connection

and how they're separate and how the mind changes the brain. And I've practiced clinically for 25 years in South Africa. That's amazing. A little bit about what I do. I love it. I love it. Well, the household I grew up in my parents, probably more so my dad. I mean, he was all about the idea of just kind of positive.

thinking. And like if you believe you can or you believe you can't, that's going to be your outcome. And, you know, he was a big Zig Ziglar fan and just kind of more of the motivational, you know, people that came out of that from the 80s. And so as I was reading your work, I was like, man, what I love about you is you pair science with the fact that our mind really does control our brain. And it's not just a rah, raw, raw motivational tactic. But you really see the science behind it, right? Absolutely. So I am a scientist. first and foremost. So I've studied specifically in the area of the mind being separate from the brain. People think mind and brain are the same thing, but mind and brain are separate.

And so very often the message today is that the brain makes you do this. And we have to be very careful of that message because it takes away a lot of our own individual responsibility that we have, you know, exactly like a dad used to say, is that, you know, what you think is, it does become a reality. And it really does. You know, you're creating matter with your mind. You're building thoughts and those thoughts become the root of what you say and what you do and how you function. So it's so interesting because my land of work is dealing with people and their money. And we always say that personal finance, it's about 80% behavior. It's only really 20% had knowledge. Like understanding the basics of personal finance, it's the way you're going to get results

is changing your behavior. And part of changing your behavior is not losing hope. And a lot of Americans with their money, they're strapped, their living paycheck to paycheck, they have tons of debts. I mean, it's just like, it's a glim reality for a lot of people in their money. And so part of my job, what I try to do is give them hope and say, you can do this. Like, you can get to a place in your life where you are controlling your money. So in order to change your behavior, you have to believe that you can have a different outcome in your life. And so what would you say to someone who just thinks, like, well, this is my circumstance. It is what it is. And it's how my life's going to be. That your mind, though, really can change your outcome if you really believe. Well, your mind is you. So your mind is how you're thinking and feeling and choosing. And as you think, feel, and choose, you create a memory into the brain. Now, what we need to understand is that everything that you say and that you do is based on what you've actually thought and built. So if you think negatively, you build a negative physical structure.

And we need that physical structure in order to speak and do. People don't link the thought pattern with what they're doing. So whatever you're saying and doing is a reflection of what you've built and what you believe. So you've got to reverse process and you've got to kind of go back to the roots of why am I actually doing, what am I doing? Why, which takes you to the thought, which makes you then realize, okay, well, I've actually physically built the wrong system in my brain. And you can change it. And that's the control that we do have as humans. Absolutely amazing.

So when people think about money specifically in America, I mean, statistics show us that it causes a lot of stress. It causes a lot of fear in people because of where they're at financially. So I'm curious, what do you see stress and fear? due to the brain when it comes to our lives? It pretty much creates brain damage. Our brain is not designed to handle toxic stuff. It just doesn't have the wiring. It's a very dependent organ that is responsive to what you put in it.

So everything that you choose to consume, whether it's in the terms of what you listen to and read and what you eat and drink and put on your body, put into your body, is all affecting how the brain functions. So if your thinking is toxic, your brain will become toxic. You will have neurochemical chaos. You'll create brain damage. And in fact, mind management is so critical. And this current age, we have a mind management problem that is worse.

It's the worst ever been in the history of mankind where people are just not processing, not dealing with issues, looking for quick fixes, looking for external solutions. And that in itself causes tremendous fear. Yeah, absolutely. And a big part of my message, too, is helping people put down social media, stop comparing their lives to what everyone else has, because I think that that's a huge problem,

which is fueling the consumerism, right? You're seeing your friends, your family, have X, Y, and Z, or they're going on X, Y, Z vacation. I mean, whatever it is, fill in the blank, and you're thinking, oh, that's normal. That's how I should be. And whether you have the money for it or you don't, people go and try to experience and buy all of these things

because of what everyone else has. So have you done any kind of research, or what do you see social media and comparisons and all of that? Like, what does that do from the science perspective to our brain in our mind? It's huge, and I've written a lot about that in my books and as well. You know, social media is not all bad, but if it's used bad, it does change the way that the brain functions because your brain's not designed to be constantly bombarded.

It's designed to take time and process information. So it's not a structure that can handle constant bombarded. on a conscious level. And basically our conscious mind is very limited in terms of how much we can handle. And social media, if you don't manage it, it can create changes in how we think things through, which in itself causes tremendous stress. And this whole issue of comparison and curated photos and the curated lives and so on is a very bad thing.

So I also teach a huge amount about the science of uniqueness from a very scientific perspective that, you know, there is something you can do that no one else can do. And if you would just spend more time focusing on that, instead of trying to be like someone else, we would be so much more successful in our lives. And when I say successful, it doesn't mean you have to be a multi-millionaire. It means do you actually have some internal peace?

Do you, are you happy with what you're cheating? Are you making a difference? Are you, you know, so that's for me much more important. Yes, that's so good. And I think your motivation for why you're doing or buying certain things, right? Like you're saying, is it finding, internal peace, it's for the good of you, your family, or you doing it for external purposes

for everyone else, right, to create that curated photo and all of that and just be part of kind of just the crowd and the noise that's going on in our world. So I think that that's so good. Okay. So another part, just to close us out, of your story and your work, which I think is just I love, is that you are a person of faith and pairing science and faith together. Tell me a little bit about that? Like how much has that influenced your work? Well, I'm very spiritual. And you know, the whole fact that 99% of you are

spiritual and the fact that you look at science, nothing's ever 100% actually because you're always learning new stuff. But when you look at the way quantum physics works, it's so spiritual. It shows that a man's ability to think and feel

and choose is impacting the physical nature of how a human function and also how the world functions. So if you look at that from the spiritual perspective, that's exactly how we've been created in God's image to be these brilliant thinking beings that think and feel and choose, and we have this ability to choose life and death on a moment-by-moment basis. And science is totally and utterly the same language. It's the same.

It's two sides of a coin. There's no separation. They correlate. They are, I often say the Bible is the story. and science told us how the story works. When you told things like, you know, we need to renew our mind, you know, that's a phrase that people throw around, but what do you actually do?

And that's where science comes in. So it's the how-to of the spiritual nature. So it's totally not really compatible. I love it. That's so great. Well, I'm thankful there's people in the world like you, Dr. Leif, who can do all of this because I'm like, oh my gosh, my mind's just blown.

But it's just, I love the complexity again of you actually do it. the research, studying our literal brains, but yet on the flip side, it's like, man, how much our minds and what we think about, what we believe about ourselves, how that controls our life. And so I just love the work that you do. And if anyone listening wants to find you, what's the best place for them to find you and to buy your books and everything that you have? Well, Dr.leaf.com. Our webpage is easier.

So D-R-L-E-A-S-S-E-S-E-S-E-E-S-in- Flower. So that's the best place and to find all the books. the store everything big. So thank you. Perfect. Wonderful. Well, thank you so much for taking time out of your day. Really appreciate it and excited to take this knowledge and for our listeners to really help apply it to their lives. All right, you guys, thank you so much for tuning in to this episode. And thanks to the Financial Peace University class for joining me and Dr. Carolyn Leaf. I hope you enjoyed that interview. Now, if you don't want to miss any money tips, make sure to subscribe to this podcast and if the Spirit leads, you can leave a review. And anything that we talked about in this

episode will be in the show notes. All right, as always, make sure to take control of your money and create a life you love. So if you guys enjoyed this podcast, we have more from the Ramsey Network, like the Dave Ramsey Show. If you're looking for boring financial talk, you're in the wrong place. This is not your mother's 401k meeting. This is life on the radio. And it's just downright entertaining. That's why there's about 14 million of you out there today. Thanks for hanging out with us, America. We're glad you're there. To hear full episodes, just search Dave Ramsey wherever you listen to podcast or go to Dave Ramsey.com.