The Rachel Cruze Show - How to Take Control of Your Money in 2022 with Dave Ramsey

Episode Date: January 3, 2022

This is the year to get out of debt, take control of your money, and create the life you love. Ready to get started? In this episode, you’ll hear: 10 things to do differently with your money in 2022 with Dave Ramsey How to save $1,000 in a month How to get out of debt NOW Helpful Resources: The Meal Planner & Grocery Savings Guide Ramsey+ Learn more about your ad choices. Visit megaphone.fm/adchoices

When you start to say, no, we're not going to do that. Even though, oh, I want to go out to eat or, man, I really want a pedicure, man, I don't really want to go do, I want to spend some money. And to be able to say, no, I'm not going to give in to the thing that I want in the moment so that I can have a better future. There's something powerful about that. Hey, guys, welcome to this episode of the Rachel Cruz Show podcast. I'm so glad that you're here and happy new year.

I cannot believe it is 2022, but here we are. and this episode, I'm really excited. Talk to you about how to win with your money in 2022. We're going to go over two baby steps in this episode. We're going to go over baby step one and how you can save $1,000 in just one month. We're also going to go over baby step two, and I'm going to give you some ways

that you can get out of debt right now. But first, take a listen to a conversation I had with my dad, Dave Ramsey, on 10 things to do differently with your money in 2022. The Big DR, you're back. Dave Ramsey. The big DR. AKA Dad. How you doing?

Great. Do you feel like a different man in the new year? Happy New Year, I do. I do. Life is good. This is going to be a great year. I know. So last year, we did a video together talking about things to do differently with your money in 2021.

Well, now that we're in a new year, I want to dive in and talk about things that everyone can do differently with their money based on money trends that we're seeing, based on our survey that we did at Ramsey Solutions, which is the state of personal finance survey. We have out all of some good stuff. because it's important to change up what you're doing. If it's not working, you've got to change it, right? Absolutely. So the first thing, I think that is so key, is find little ways to save money, aka how not to spend as much. And this is what?

No. Do you agree with that? No. It's like, I don't know. I don't know about that. Well, because I, you love to spend too. We love to spend money. It's fun.

And so finding ways to be like, okay, where can I cut back? because I know I can be guilty of things like, oh, that's a great sale. I'm getting a good deal. And then you end up spending more money that you didn't even plan on spending just because of a sale. So I've learned in my own life how to just, I'll add stuff to my cart online if I'm bored and I'm just looking through. And then I don't buy it. And I just delete the window and I just move on with my life. But it feels like you kind of spend money and you didn't spend money.

So it feels great. But hey, I save money. With the dopamine rush without the empty checking account. Who knew? Thousand percent. Yes. Yes. You know, what happens is no one, the Bible says the little foxes spoil the vine.

The little details will kill you. And no one does stupid on purpose. And the way to keep from spending money on little things that you shouldn't be is just pay attention. When you spend money on little things that you shouldn't, you're just being lazy. You're not paying attention. Yes. And if you'll just look at what the, flip you're doing, you'll go, oh, wait a minute, wait a minute, that's stupid, I'm not doing that.

Because it's just a little sloppiness kind of in your intentionality. And when you just pay attention, you'll tighten up. Well, you always say the phrase, and it kind of grosses me out, but it's just true. Death by 1,000 cuts kind of thing, right? Like it's just those little things, you guys, they do, they can kill you. Well, people are successful by small increments, not by big splashes. Yep. And people fail by small increments, not by usually one big, bad decision.

Very seldom does one thing take somebody down. Yep. You know, in their success journey, their wealth-building journey, their marriage, whatever. It's very seldom one moment. Maybe the one moment is the icing on the cake, but it's been a series of events that brought you close to there. And that's why this is so important. Yep. So you guys, again, finding little ways to save money.

So key. Okay, next, keeping your emergency fund funded. So having your emergency funds is so key, but when you use it to put money back in and save it back up. Yeah, and I did a survey, too. Four in four people, everybody during the pandemic had a freak out moment. Is that a Dave Ramsey survey? That's a Dave Ramsey survey. That's like four out of four dentists say.

Yeah, but I mean, you had a freak out moment, right? It's like, ah, for a moment there. And then, you know, how long that moment lasted was somewhat in proportion to the size of your emergency fund, your rainy day fund. So if you had a pandemic problem pop up and you had $50,000 cash in the bank and no debt, that problem didn't last long emotionally. But if you had $50,000 in debt and no money, and you had a problem pop up, now this problem lasts. And so your emergency fund has always been there for your rainy day.

It's always the umbrella. It's the GOK, the God Only Knows Fund. And it always gives you peace, and it's never sexy to do it. It's never like, ooh, I'm cool, you know, when you do it. But it always gives you this adult feeling because you're freaking being an adult. Do you find, though, with people that when you have to dip into it and then fund it back, it's like, oh, it's kind of that backward step. Because I think we all, as humans, we want our life to just keep going up, right? But the truth is, is like, there's an up and down trajectory.

It's a downer to have to take a step back to take two forward. Yeah. It's always like, crap, I got to do this again. Yeah. I mean, that's everybody. But it's probably more of a downer for those of us that are spenders that are offensive in what we're doing. The saver is like, oh, good, I get saved again, you know, a little bit, right? We're back to saving money.

It's so exciting. But still, it feels like you lost traction. Yeah. Like, you know, there's a storm on our mountain climbs. We have to go back down and get safe, way on the storm to go by, come back up. That's a bummer. I've got to climb it again.

Yes. You know, but you still do it. Yep, and you're not going into debt for it, too, which is great for that energy. Okay, next, this is a hot topic. You ready? Cryptocurrency. So you guys.

The crypto guys love me. Don't go. They love Dave. Don't go crypto crazy. So in our survey that we did, it's so interesting. 14% of people have a clear understanding of what cryptocurrency is, but 22% of them have purchases. 80% of those are lying, too.

So talk about this because investments, well, let me just say this, because you're 61. One. Thank you. I was about to say, right, 61, 61. How old are you? Yeah, do you know how old I am? Just keep moving.

Oh, he doesn't. No, he doesn't know. No, I'm not going to reveal your age. Oh, you can't. I'm proud of my age. Okay, so in your 61 years, though, again, you've only, you've been doing this, not that entire 61 years. But over decades, you've seen different flashy things come up, kind of this like,

oh, we're going to, we're changing the system a little bit. And some stuff has changed, right? Like when debit cards came into play. You don't even plastic came into play, all of that. So there are times that the financial industry does change. But your investment strategy for you, has been very consistent over decades. So what makes you not want to just jump on the new exciting trend of crypto?

Well, I've seen a lot of get rich quick come and go. I mean, nothing down real estate's hot again. It was hot when I was 22. Yep. It was a great way to get rich when you were 22. And I did get rich and nothing down in real estate and it went broke. And so what the problem is is not actually whether blockchain works or whether Elon Musk is a brilliant guy.

You know, that's not because he endorsed it, right? And so Doge corn. And it's not whether I actually understand it. I'm a boomer and I'm out of touch. That's just a bunch of crap. Okay? That's a Reddit thread. You should stay out of that garbage.

No, here's the thing. The truth is the problem that blockchain represents or the crypto or Doge or whatever represents is a get-rich-quick mentality. And it is a I'm going to get rich easy and quick and there's no risk. And anyone who says otherwise just really doesn't understand the actual way it work. which is horse crap. Of course, I understand how it works. It's ridiculous.

But what it is is an unproven thing to put money into. And so it is not an investment. By definition, an investment has a historical track record that you can plow into. And you can go, this is what's there. So when you are putting money in something that's unproven, that's called speculation. That's not called investing. That's called gambling. It's not called investing.

And so I'm not saying that crypto is not going to work out. I kind of think some version of it is going to work out. But I don't know how many bodies are going to be left in the ditch along the way of people who rode these ridiculous tidal waves and thought they knew how to surf. And they get their whole lives wiped out, like mine got wiped out with nothing down in real estate, because I was greedy. And that's what this is. This is, he who hastens to be rich will not go unpunished.

And so there's this existential thing that happened in the pandemic. Oh, we all realize we're all going to die now. They never thought of that before. And so I have to get in a real hurry to get rich because I'm going to perish. And so there's this weird spiritual crap happening inside of people that's causing them to rush into nothing down real estate into speculation of any kind. And crypto just falls in that category.

Yeah. Or this beanie babies. It could be anything. I mean, what are you going to invest in that's weird and unproven and call it investing? not. It's speculation. Yes. I mean, there's an old movie, fabulous movie, trading places with Eddie Murphy, and they

were speculating on orange juice futures. It was a commodities play. And commodities were big. And when I was 26, gold speculation. Buying gold is a commodity, not buying the gold bars, but it was a speculation thing. I lost $5,000 in about 26 minutes doing it one time, because I thought I had it figured

out. And so, what I figured out is, slow and steady wins the race, invest in things that are proven. If you're speculate it should be a small percentage of your world because you're getting ready to light those dollars on fire and burn them. Boom! They'd be gone. Gone.

So again, this whole idea of building wealth and wanting to win with money and actually have more dollars to your name than you did the day before all of that, it is. It's that investing 15% of your income, you guys, into your 401k, Rothairie mutual fund. And it is, it's that slow and steady, which again, it's not exciting. It's not fun. You don't seem on the cusp of, like, the new things. And honestly, people don't... You're not the cool kid, but who gives a crap?

I mean, listen, if your goal is to be the cool kid, you can be broke your whole life. Well, I don't think it's the cool kid, but the conversation I've had even with friends, it's like they almost make you feel like you... Oh, you don't understand. Well, you don't really get it. If you really got it, if you really understood it, you would do it kind of thing. That's an arrogance. That's just arrogance. It's all that is.

But there's an emotional thing in that, I feel like. Don't question my get-rich-quick scheme because you are questioning my spiritual stand in my heart is what you're doing. And so the reaction back against the reaction back against the... that is vicious. Yes, yes. And it's like, whoa, Dave Ramsey. So I must be completely torn down as a human being because I stood against your broken, messed up heart.

When is something proven over long term that you would invest in, something new? Real estate that is not nothing down. But like, how long would crypto have to be working for you to say, hmm, I would put some money in? I would have to see a steady trend line, not a mountainous, crazy world, okay? Yeah. And I'd have to see a platform that was stable. and that had some sense of participation for about five years. Five years.

And then I'll talk about doing it. Yeah, yeah. But right now, it's LSD, man. I mean, it's all over the map. They're tripping. LSD. There you go, crypto. Just like a drug.

Now you've got a whole new thing to write about Dave. Just like a drug. Okay. So the next thing to do different in 2022 is possibly to get a part-time job. So we always talk about how when you want to get out of debt, you want to build up that emergency fund. If you're kind of starting off, especially in those steps of the baby steps,

bringing that income up is a huge part of the equation. And I feel like now it is a great time because... Oh, lots of work. Restaurants, service industries, deliver. I mean, it's just there's signs... And the pay is really good right now for that kind of stuff. Yes, because they're desperate for it. And side hustles, too, of all kinds.

It's a great time. And it's always been the formula. I mean, there's a great place to go when you're broke to work. It's always been the formula. Yeah. But now you can really just kind of almost chival almost cherry pick and get really good return on your time invested. Yes.

And really move the needle. And so there's something really positive about stepping in with a sense of action, a sense of passion into your wealth building, into your future, and really popping it with a little extra income. Yep, it's huge. All right. Number five, don't rely on the government to forgive your student loans. So 66% of people believe that the government is going to be the thing

or a portion of it that's going to help them get out of their student loan debt. It just makes me sigh a little bit. Makes me sigh a little bit. I have a different reaction. Yeah, where the government, the trust the government has in my life is like, nothing. And so there is a powerful thing, you guys, of stepping into your own life, your money, what's happening, and to say, I'm actually going to be the one to move the needle.

I'm actually going to be the one to control my life. I'm not going to wait on somebody else to fix my situation. And when that shifts, and it's not even just the government, but I think anything, right? Society, once my boss sees how great I am and gives me, right, like once you start placing your future in other people's hands, that's it. That's when stuff starts to get scary to me. I'm waiting on my company to fix my life. I'm waiting on my wife to fix my life. I'm waiting on my preacher to fix my life. I'm waiting on the White House to fix my life.

You're going to be waiting a long time in every one of those cases because it turns out your life is your job. And I'm old. We've already discussed that. He's 61, by the way. And she's not yet. And I've never gotten blessed from the White House financially. And I've built two fortunes in my life. There are a result of lots of wonderful people coming alongside me. I didn't do it completely by myself.

I'm not a lone ranger. But it was not as a result of the government dishing out blessings. You don't find people who go, the government made me rich. You just don't find that. And so waiting around on them to fix your life is dumb. Oh, and by the way, B, you borrowed the money. You took out the loan. You owe the money.

Oh, there's that. It's a moral thing. I know. So here's my thing, though. Here's my rub, though, is like, yes, a thousand percent. And I agree. I agree. But also, I'm like, it's these,

but we just said a whole documentary borrowed future. If you haven't seen it, you need to watch it. But I'm like, you see these 18-year-old kids that are coming from all different backgrounds, all different situations. I'm not saying they're going to get scammed. Yes. But you did sign up for it.

But you did sign up for it. You know what? The scamming factor that you did sign your name. Yes. The scam in it? Your reason I went broke was I signed too many loans. Yeah. 90 day notes.

Never thinking they were going to execute on one little clause down in the bottom down there. And that's what it was. It was like 17 pages into the document. Yeah. One little clause. And they went, uh, the quality of your collateral now we don't like. And I'm like, what the flip is quality? And call.

our loans. So I got scammed. I got tricked. I got beat up by the banking industry. At 23 years old, I signed those loans. Yeah. Yeah. So who is ultimately responsible? The truth is both parties. But I can't walk around and wait on someone to go fix the thing that, the trap that I fell into, it's my life. I have to take responsibility. Boys and girls, when you become an adult, you take responsibility for your crap. Amen, hallelujah. And then that's when stuff starts to shift, though. And again, this is everything. every part of your life, when you actually start taking your responsibility and your parenting in your marriage, in your work, all of it.

It is. It's this decision. My kids are screwed up because of the schools. No, you let them go to that school. You're their parent. Do something different. It's not the school's fault. You left them there.

Oh, no. Here we go. My kids are in public school. I just got very nervous. You can't, no, but the point is if Amelia comes on misbehaving, you can't, Winston would never blame the school. I know. Oh, yes.

It wouldn't even come up. Sure. He would just go, my kid is misbehaving. Sure, sure. There can be influences. Yes, there can be. But the ultimate responsibility lies on an individual. We should have a parenting podcast together. That would be awesome. This would be great. This would be great. Okay. Be highly, highly, yeah. Volley-all. Ball it all. Okay.

Reginald-as scars. Number six. Number six. Don't fall for afterpay. Okay, so the way crypto was kind of a current trend thing. So is after pay. And this is everywhere. I know you don't. live on Instagram. I know, I don't. But if you swipe up on any cute thing... I follow, I watch the fine print with George Camel. I know, I know. Yes. Well, it's just everywhere. And it's interesting, we found that 78% of millennials who used after pay actually missed a payment. No. Depend... Who knew? Sorry, guys. I'm just trying. I feel bad for you millennials that missed a payment. But the fees

and everything attached. So here's the deal of you guys. Again, stop. It's debt. What that is is debt. And it's a sneaky marketing way to make you feel like, oh, but I'm not using a credit card. It doesn't feel like a loan. It's just like, oh, it's just four easy payments to get the shirt that I want. Here's the oldest trick in the book, okay? Take a very small amount of money and charge a thousand percent interest and do it 10 million times. And you will become afterpay. That's all it is. It's a tiny little amount of money. It's nine freaking dollars. Right, right. And then you add the interest on it. And you go, if you actually did the thing, it's like a payday lender, okay?

I take a $50 thing out from a payday lender. But no one looks. The average is 840% annualized interest on payday lending. But it's such a small amount of money, and the $840% on $50 is $200. So it's still a small amount of money, but it's just, gee. You don't catch it because, again, the little foxes just boil the vine. They keep it small enough that they low you to sleep and... Yeah.

And what it feels like it. That's right. That's what it is. you guys, again, staying away from it, just pay, pay for it. So you're not continuing to have to pay for the sweater or the cookwear, whatever you're buying over those four months. Okay, number seven, talk to your spouse about money. This is a huge topic. We talk about money in marriage a lot, because the relational aspect of money is big in the celebratory part of it, but also the tension, stress-filled part of it. Money, it's a factor in marriage. And so learning to get on the same

page, it is so crucial. Your journey not only brings you guys together in your marriage, but you also get there so much faster, too. Here's the thing. Do you want to have a high quality of marriage? Do you want to be wealthy? Answer to both questions, if you're semi-intelligent, is yes, right? So what is the shortest distance between where you are to wealth and a high-quality of marriage? It turns out that there's two pieces that if you leave either one of them out, you're not going to get there. One is the power of unity of working together towards a goal. One plus one does not equal two when you're unified.

One plus one equals four. And so you get there so much faster. And the second piece is integrity. You just don't become wealthy or have high-quality relationships without integrity. And integrity means your whole. Yeah. Like an integer is a whole number. And that means your whole relationship is on the table.

There's no hidden target bags under the bed, and you think that's cute. It's not cute. It's lying. It's deceiving. It's integrity. And I need to say that strongly, not to be thumping somebody, but to wake you up and go, this is costing you in ways you have no idea. Who can find a virtuous wife?

Her worth is far above rubies. The heart of her husband safely trusts her, and he will have a virtuous wife. No lack of gain. There's no qualifiers, there's no percentages. A hundred times out of 100, he will have no lack of gain. Yeah. I love the little fox's analogy that's been through this whole thing, but it is. It's the small things, you guys, we're like, oh, I'm not going to, oh, I'm not going to do it.

And it hurts. It's hard. It can be easier as head. Wednesday, we were just booking a vacation. It's shaming. And I saw the dollar amount, and I was like, because we talked about going, I was like, I'm going to, and I'm going to tell him dollar amount, and it's just a little bit, it's a little bit more. It's, it's just a little bit.

It's not expensive than normal. But you guys, but I even found myself being like, okay, Rachel, okay, you got to just say it out loud. You know what I mean? But I don't want to hear a no. I want to go, like, right? It's the whole tension of stuff, you guys. I want my way.

Maybe, maybe I do. Maybe I do. I really want to go stay at that one hotel really bad. But no, but I'm like, it is, there is something about, not just the honesty, but the, hey, we're going to work at this together, whatever the decision is, you guys. So getting on that same page, talking about it, even though it's difficult, I hear that.

I know my example is something more small than maybe what you're walking through in your marriage, but pushing into those issues and have someone walk with you if you guys need help. I don't think that life, I'm like, you know, if you're not great at working out, you get a trainer or you go to a class with an instructor. Like, you have people in your life to help you. So pull somebody in to this conversation if you need help. So that would be my piece of advice. All right.

Number eight, get on a budget, the B word. I feel like this is like one of the – I feel like Ramsey is known for like cut up your credit cards and get on a budget. I feel like the budget is the tried and true, but it is that important, you guys. Like, it is the thing that is going to change your financial life. When you actually start to have a plan and you actually know what is going on with your money, you can make changes. There's such freedom in it. Yeah.

The budget is not the thing. It's the vehicle. You get the kids all ready for church, and now you go, get in the car. Because that's the fastest way to get to church. We could walk, but get in the car. So what's the fastest way? Get on the budget. It's the vehicle that takes you there.

It's not really the thing. It's the thing that takes you to the thing. Yes. Yes, absolutely. But it is the thing that says, okay, here, we're able to lay everything out and actually know the numbers and know what's going on. So let's get on the budget, like you're saying, and start trekking down. And whether you're starting on Baby Step 1, you guys, or you're on the way on Baby Step 7, still having a plan and still doing a budget.

I was talking to a friend this was a few months ago. She said, I just feel like I just worked so hard to, like, nickel and dime myself on a budget. Like, I don't do a budget. It was such an interesting concept as I was kind of asking her more questions and all of it, because I was like, I felt the complete opposite. Like, I feel like, if I work hard and I make money, I'm like, I want it to go as far as possible, not to just hoard it and, you know, just be like, oh, it's just going to be all mine. But to actually use it and enjoy it and have fun with it.

Well, that's someone that feels like a budget is telling them what to do instead of them telling their budget what to do. That's right. Because here's the thing. If you aim at nothing, 100% of the time, you'll hit nothing. It's pretty simple. And that's what most people do with their lives. And so you wouldn't get in the car and just go, I wonder where Florida is.

I don't know if we'll ever get to Florida. And you start driving in circles. Sounds good. I don't really want to be constricted by a plan. You'll end up in freaking Minnesota. I mean, it's just, and then wonder how you got there. And I wonder how this happened. You know, someone must have done this to me.

No, you did it to you. You need a game plan and go, this is the path. and then once you decide that's the path, and you go, oh, is there a more efficient way? I mean, you bring up the GPS, it's got four different ways, and you select the scenic route, the one through the wreck, or the one with the traffic, or you decide, you know, which one are we going to do? But there's at least a plan, and then you can adjust the plan as you go,

and guess what, it's your plan? You could just decide not to go and turn and go back home, but you've got to have a plan. Yes, absolutely. And if you guys haven't used every dollar, make sure to download that because that is, it's probably the best tool to help you not only learn how to budget, but it's actually using your everyday life.

It's huge. And it gets better every day. Our team is so good on every dollar. It's awesome. Okay, number nine, keep your eyes on what you have, not what others have. This is big. I love John Salone. He says that anxiety has been escalating so quickly that the trend line is almost completely vertical.

And I think because of that, there's this level of like, in everything in our world right now. But I think the idea of acquiring and living life and, oh, I'm just going to, I just want this and this and this because you see what other people have. there's an emotional toll that that causes you guys. There's a discontentment that starts to lay in your life and in your heart. Versus when you say, okay, what if I put the blinders on? And I just focus on that. And when I see other people in their stuff, I used to be bad at this. I would see someone that has like a Tesla, like a car or something that I absolutely love.

And I would be like, they probably have car payments on it. They probably have a car payment. And I would try to like justify like that they made a bad money decision because it was something I wanted. And then I had to learn, Rachel, stop that. Like, no, no. or I'd see a nice vacation of someone. I'm like, oh, I bet it's on a credit card. Was that on a credit card?

And learning like, no, 1,000% they could have saved up and paid for this, all of it. But either way, right? Either way, whatever someone's money decision is or what they have, you just can't let it control your life. You can't. And again, I'm one that can be guilty of that. But learning day in and day out, you have to put the blinders on. And that contentment piece of this money conversation, you guys, it is.

It's so, so key. There's a number one book out called Love Your Life. if not theirs. You got to check it out. Yeah, it's really good. Godliness with contentment is a great game. The people that you walk around that are just, they look different, they feel different, and they're really kind of rare. And you know what?

It's a decision. It's a choice. You can decide, I'm going to be one of those people rather than just, it has a lot to do with screens. If you're screens you have in your face, the more content you are. Amen. Hallelujah to that. Pastor Dave. All right. Number 10, live on less than you make. This is like one of your banners that you've been raising forever. But it's true. All of this that we're talking about,

you guys, whether it's, again, the budget, talking with your spouse, having an emergency fund. So much of this plays into just that simple phrase, but yet is so hard to do, of living on less than you make. Yeah. The Bible says a foolish man devours all he has. You spend everything you make. You're by definition of fool. I've been a fool at times. and then when I'm not a fool, I have more money. And so you spend more than you make. It's bad. Normal is broke, and we can all look out there and go,

we don't want to be normal. Yeah. The statistics of normal are really sucky. I mean, it's bad. You don't want to be normal. And so, but it requires this magic word that you have to learn to say to yourself, and the word is no. And it's magic.

It's ancient. Very few people hear it anymore, and you're certainly not allowed to say to anyone. on any issue, you'll get canceled. But you've got to learn to say to yourself. No. Yep, learning that. So good. Good top 10 list for 2020 to you guys.

Well done. I hope this helps you, and I hope it guides you guys. And if you want to check out things like every dollar of Financial Peace University, go to ramsysolutions.com slash Ramsey Plus because plugging into some good stuff that's going to help walk beside you this year, it is. It's so important. Again, like I said earlier, we're not supposed to do this stuff alone. You're not supposed to know how to parent by yourself or have a lot.

a great marriage by yourself or even spiritually grow by yourself. Like, you have people in your lives to help you. And that is why we do the work we do every day is to walk beside you guys. So make sure to check that out. And I hope you have a great New Year. So fun. Happy New Year. Happy New Year.

So many times in the New Year, people are like, okay, I want to get things in order, right? Whether it's your health or it's your money or it's your career. And so specifically when it comes to your money, a lot of people want to do things like save more money or get out of debt. And so I have some good news for you. We can help. Yep, here at Ramsey Solutions, we've created a plan called the Baby Steps.

And this plan is tried and true. It is seven steps to help you guys. And some of you are familiar with them and you're in the middle of doing them. Some of you have heard about it, but it's like, oh, you don't know if you want to start. And some of you are thinking, I just need help. I just need something to do.

Tell me what to do. So we're going to spend a couple of episodes on the Babystapes. because they're that important, they really are the how to build wealth, how to get in control of your money, how to win with money over time. So, here are the baby steps. Baby step one is to save $1,000 in your starter emergency fund. Baby step two is getting out of debt using the debt snowball. Baby step three is to have a fully funded emergency fund of three to six months of expenses. Baby step four is to fund 15% of your income into retirement. Baby step five is to fund your kids college, baby step six, is pay off your house early, and baby step seven is to build wealth

and become extremely generous. So all of these steps are intentional, and the order that they're in is intentional. So if you do the plan, you guys, I promise, I promise you're going to make progress with your money. You really can get in control of your money. So in this episode, we're going to really focus on baby step one, which is, again, saving, a thousand dollars. Now, I always tell people, this is the easiest step, but it's also the hardest step. So it's the easiest step because it's $1,000. You can understand that, you can see it, you can figure out how to get $1,000, which is what we're going to talk about in a little bit. It's understandable. Now, it could be a large amount of money to some of you,

to some of you are thinking, oh, I have that in the bank. But you can grasp it, you know what to do. Now, it's the hardest step because you are saying that you're saying that you're not, you're not going to be. you're going to engage in a process that is different than what you've ever done before. And that can be one of the hardest things for anyone is to change. Even if what you're doing right now is not working and you're looking at your money situation thinking, I'm not happy with where I am. But if you just keep doing what you've been doing and keep getting what you've been getting, but what you keep doing over and over and over is comfortable because it feels okay.

And you're like, okay, I'm not being pushed. But when you actually change what you've been doing, you're going to get a different results, but you're going to feel the friction. So hold on tight. Get ready to be a little bit uncomfortable as you dive into Baby Step 1, but it is so important, you guys, it really is to say that you can do this because you can, because you can. Now, for that $1,000 emergency fund, this is your safety net, really, between you and life. Because as you move on to Baby Step 2 and start paying off your debt, we're going to tell you to put everything towards your debt. So any other savings that you have, you're going to throw it at your debt. So this $1,000 really becomes the thing

that's like, okay, if something comes up, this is my safety net. And some of you might be thinking, okay, $1,000, how the heck am I going to get $1,000? Because I want you to do this quickly. I want you to get $1,000 as fast as possible. So here are a couple of ways for you to save $1,000 quickly. Number one, get a second job. So when you're trying to save money, you can cut out expenses like we're going to talk about in a second, but you also can add more money in the top. You can bring in more income. And this is the fastest way for you to get $1,000 quickly. And there are so many extra jobs you can do. There are a lot of service jobs available right now. So an extra eight hours a week at minimum wage, conservatively, is around $325. Now, more casual

jobs like babysitting or dog walking often pay more than minimum wage. So get that. and come up. Now you can donate plasma as well for $50. I would also recommend calling your cell phone provider and cancel the insurance. If you have insurance on your cell phone plan, cancel it, and see if you can switch plans to maybe get a more inexpensive one, or you can even go to a different carrier to save money. So on average, people doing this can find around $30. I would also say freeze any of your miscellaneous spending. Yep, all the things you don't need. you don't plan for, but you're scrolling through Amazon and you think, oh, I'll just add that to my cart, I'll add that to my cart, and I'll buy this and this, or you go in Target and you just start buying

stuff. So easily you could save around $100 by just not spending on extra stuff. Now, you can also brew your own coffee for 30 days. So if you went out and bought coffee every day for 30 days, that'd be around $150. But you're going to save that because you're going to make coffee at home. you can set up an automatic deposit to your savings account. So if you just save 10% on average for any full-time minimum wage salary, you're going to save around $125. So automatically, that's going to come into your savings. You can also cut cable, and on average you'll save around $80.

Also, don't eat out. The average American spends $232 eating out every month. So pack your lunches, eat at home. and again, on average, we'll say $116 you can save on this. And I created my meal planner and grocery guide to help you. So there's free meal planning and grocery list templates out there to make this easy. I'll put a link in the show notes so you can check that out. Also, if you switch to cold water to wash and rinse your clothes,

that's around $17 you can save. And you can even switch from name brand to generic brands at the grocery store, and that can save around $16.000. $60 or more. So if you just do all those things we talked about, you could save $1,053 in 30 days. It's possible, you guys. Again, it's about being intentional.

Now, one way I save money, again, is always around the grocery store concept. Kiss the grocery store. It's where we always bust our budget. It's the food thing. But I always, always buy store brands on most everything, from, like, dairy to bread, milk, all of that. I really do, because you're going to just, you're going to uptick some money to just

get the name brand, and it basically tastes the same. It really does. So for me, again, the store brand is the way to go to save some money. Now, baby step one, again, we've been talking about it, but it can be hard because you're changing what you've been doing. You're using another part of your brain. You're adding in something different in your daily habits to really say, okay, I'm going to do something different. So saving that $1,000, I know. is not always easy, but I want you to stay focused, and I want you to do this quickly. Because as you start to do this and you actually save $1,000, you really are going to realize, okay, I can do this.

Like, if I put my mind to a goal, it's possible. I could actually make progress in my life and my money. And that is what I want for you in 2022 and beyond. And to help you do this, Ramsey Plus is available. So this has every dollar the budgeting app we talk about. It has financial peace university in it. So make sure go to ramsysolutions.com slash Ramsey Plus and get signed up for a free trial. So this can help walk beside you as you start to win with money.

So remember, take control of your money and create a life you love. So we've already talked about Baby Step 1, which again is your starter emergency fund of $1,000. So once you do that, you can move on to Baby Step 2, which is to pay off all of your debt except your mortgage. Debt, debt, oh, let's just talk about it for a second. Debt in America. Not good, you guys, not good. We're not going in the right direction. In fact, according to CNBC, the household debt just passed $15 trillion for the first time. And credit card debt rose by $17 billion in Q2 of 2021. It was up after four straight quarters of it going down, it went all the way back up. It's like we just got tired of the pandemic. We're like, we just want to go out and about and live our lives and spend money we don't have and do all this stuff. And credit card debt soared.

And I was like, no, no, no, no. And according to a study by bankrate.com, 42% of those who have credit card debts have added to their balances since the pandemic. And average interest rates right now are more than 16%, and that doesn't include late fees. And 40% of people that carry a monthly balance haven't been free from credit card debt since before 2018. So we're at, you guys, it's where we're at. And again, people can be on one side of the boat where they're like, well, I have credit card debt in car loans because I've got to pay my bills. and it's a struggle, which it is for a lot of people. Life, it is so difficult.

It's like you get in this cycle of debt and you can't seem to get out. Other people are like, well, I just have the standard of living that I want to live, and it looks great. I'm going to just use credit cards and get the points. Oh, gosh, we can't pay it off this month. We'll just do pay it off next month,

and then we want to go on this trip. It's like your spending just gets absolutely out of control. All of it, you guys, it's like this massive hurricane that is colliding with our souls. Because with debt, it doesn't equal freedom. we go into bondage, financial bondage, for stuff that just feels good in the moment. Feels good to buy, and then you're paying for it over and over for months and months,

sometimes for years and years, when instead us stopping and saying, okay, I'm going to say no, or I'm going to have delayed gratification and save up and pay for stuff because we live in a world, you guys, our stuff owns us, whether it's our cars or our college degrees. it owns us. And in Proverbs, it says that the borrower is slave to the lender. And there is something not freeing about owing other people money. And again, this is not to shame, you guys, because some of you watching, you have debt, some of you are trying to get out of it as we speak. But it's to say, hey, there's a better way. There's a better way. So that stress that you feel, that lack of sleep, that you don't get, the feeling that your income comes in and it goes straight back out, and it's

hopeless, like all of that can be changed. It really can. There's a level of control you can get back over your life when you actually have a say over your money versus eight other people telling your money what to do through banks and lenders and your money going out. So turning the perspective and saying, you know what, I'm done with my money, just telling me what I have to do, I'm actually going to get in control of it and be able to be the one to tell it what to do. There is something powerful about that. And that is why babysept two is one of the most exciting steps out of this entire journey, because you are able to get out of debt. And it's hard. It's hard. My dad always says you can wander your way into debts, but you can't wander your way out. Getting out of debt

takes extreme sacrifice. It takes extreme focus, but it is possible. So the moment you say, okay, I don't want to have debt. That means you're also saying no to Starbucks, no to happy hours, no to manicures, no to cable, no to going out to eat. You have to change your life and you have to sacrifice. You want the least amount of money going out at expenses and you're going to shrink your budget and take anything extra you have to put towards your debt. You're going to add income. You're going to work extra. You're going to sell stuff. I mean, you're going to go crazy and add extra money in. It's going to go straight to your debt. All of this stuff is going to be colliding with the beauty of the future of you having no debt. And you're going to realize that you

have power over your life and your decisions. When you start to say, no, we're not going to do that, even though, oh, I want to go out to eat, or man, I don't really want a pedicure, man, I don't really want to go do it. I want to spend some money. And to be able to say, no, I'm not going to give in to the thing that I want in the moment so that I can have a better future. There's something powerful about that. But it's also hard because it's weird. Nobody lives like that. Everyone lives like that. lives like they have it all together and everything's great and they get to do whatever they want and whatever they feel like they want to do they just go do whether they have the money or nuts that's normal but also normal is 78% of americans living paycheck to paycheck so if that is

normal i don't want normal i'm great being a little weird i'm great with people being like wait what yeah what i just had a conversation so we've known for just a few months and they're like is it really true like you guys just save them and pay for everything that was a literal question. And I was like, yep, it is true. Yep. That's so cool. I thought, uh-huh. But it's so bizarre. Like, they couldn't even get their mind around it. So it is. It's different. It's different. But also, again, you have control over your money. It's a beautiful thing. So when you go into Baby Step 2, here's what's going to happen. You're going to want to be laser focused. You're going to want to be extremely intense about this because the more focused you can be, the more you're going to see

progress, and you're going to dive into what we call the debt snowball. So here's how Baby Step 2 works. You're going to list out all of your debts, smallest to largest, regardless of the interest, right? You're going to pay minimum payments on everything, so you're not behind, so you want to stay current, but you're going to take all your effort, all your extra money. When you sold two TVs in your house and that cash comes out, whatever is coming in, you're going to throw at the smallest debt. Then once that's paid off, you're going to roll everything that you were doing onto the second smallest. And what's great is after the smallest and the second smallest is paid off, you have those two payments that you were paying, but now it's cash and it's freed up, that you get to roll on to

that third smallest debt. And what happens is the momentum and the math end up making the snowball effect that you're going to get so much motivation and so much momentum as you do the debt snowball. And this is the most effective way to get out of debt. Some people will argue, well, you should pay off the highest interest rate first because mathematically, that makes sense. But if we were doing math, you guys, we wouldn't be in debt in the first place, would we? No. So math is not our issue here. We are our issues.

It's us. We're the problem. We're the ones making the decisions, but we're also the ones that can be the solution. So you're the one that gets to say, okay, I'm going to do this. When you pay off that smallest debt, that feeling you have, you can actually do it. that you actually see progress in your life. You're like, oh, I did it. It's possible.

It's an amazing thing, and that is what fuels you to keep going. It's not the math that fuels you. It's the fact that you have hope now in a situation that you may have felt hopeless in. And here at Williamsey Solutions, and this is what we talk about, because this is the beautiful part

of getting in control of your money because you actually have a future now that you have options for. You actually get to change your family tree. you're actually creating habits in your life that maybe your kids don't ever have to experience because of the decisions you're making today. There are big reasons why getting out of debt is an amazing thing. Yes, financially it is.

Emotionally it is. But there's also something about this legacy piece that the people around you, your friends and family, your children, all of it. These people are changed by the actions that you're doing and the freedom that you're experiencing. You get to really pass on through what you're doing. And it's an amazing thing, an absolute amazing thing. and we want to walk beside you here at Ramsey Solutions. And so we have a lot of tools to help you stay on track with your goals.

So you want to check out Ramsey Plus. It really is the best place for you to budget because it's the every dollar budget in there. You can go through Financial Peace University. It'll show you, again, more in depth on how to pay off debt and how to build up that emergency fund and invest in all of it. But walking beside you guys is something that we really want to do to help you reach your financial goals. So you can start your free trial by just going to, Ramsey Solutions.com slash Ramsey Plus. And let this be the year, you guys.

Let this be the year of 2022. You said, okay, I'm going to do something different. I'm going to do something different. I'm going to actually try to do this. And once you start to try to do it and you start to work your way out of debt, you won't be able to stop. And then here's the great thing, too. I always tell people, if you hate being debt-free and it's miserable,

you can always go back in debt if you choose to. You're probably not going to. but it's miserable being in it. But once you're out, the freedom that comes is amazing. Well, I hope this episode has helped you guys to really get control of your money in 2022. That is my hope for you. And if you've not started the baby steps, I hope this is the thing that catapult you into doing something different with your money for the first time ever.

I want to thank my dad, Dave, for being on. Always fun to have him. And thank you guys so much for listening to this episode. If you have not subscribed to this podcast, make sure you do that, hit the subscribe button. 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.