The Rachel Cruze Show - Keep Your Holiday Spirit Up and Expenses Down

Episode Date: November 29, 2021

This Christmas, spend more time and less money. Get tips on how to keep expenses down in December, and how to make Christmas about spending more of your time—not money—on your kids (they want you more than stuff anyway). In this episode: How to Keep Your Expenses Down This Winter How to Avoid Spoiling Your Kids at Christmas My Husband and I Disagree on the Mortgage (What Should We Do?)   Resources: Term Life Insurance from Zander: https://www.ramseysolutions.com/insurance/term-life-insurance 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. The Rachel Cruze Meal Planner & Grocery Savings Guide: https://www.ramseysolutions.com/budgeting/meal-planner Learn more about your ad choices. Visit megaphone.fm/adchoices

The time and quality you spend with your kids is going to be such a greater gift than the stuff under the tree. Because let's be honest, half that stuff is going to be thrown out or given away six months later. Hey guys, welcome to another episode of the Rachel Crew Show podcast. So glad that you're here. In this episode, we're going to talk about some ways to keep your everyday expenses down this winter. And I'm going to take a question from Michelle on mortgages. And I'm how her and her husband's view on paying it off early is a great one. But first, let's talk about kids and Christmas. Oh, it's always a hard conversation around,

am I giving too many gifts? Are my kids going to be grateful? It's a hard one, but we're going to talk through it. Take a listen. When it comes to kids and Christmas, it's always a touchy conversation. Yep. So Thanksgiving is over.

Christmas is upon us. And whenever it comes to Christmas, I do. I just feel like there are thousands of messages yelling at us of like, get more plastic crap for your kids. Keep buying more stuff they don't need all this stuff. And then your favorite stores send you the magazines, Target, Amazon. And your kids are like, what? I didn't know this existed.

Oh my gosh, I need this. I want this. And you're like, oh, my God, there's just stuff everywhere. And then as a parent, you feel the pressure to be like, yeah, I got to have a lot of gifts for my kids, not just for that picture that I take and post on Instagram, like, beautiful Christmas morning. And it's like covered with stuff. But also you're afraid, oh, my gosh, are my kids going to like it? I want my kids to be happy on Christmas morning.

I want them to have a better Christmas than I had growing up. You know, we have all these messages. And it's like this tug of war when it comes to Christmas in our kids. And I'm not the expert. I'll be honest. It's something that I still struggle with because if you have the budget to be able to do it, sure. But even if you have the budget to do it, should you do it? How much should you buy? What do you do? And no, we do have a tight budget and the Christmas is not going to be big or my kids can be disappointed, right? It's just this whole conversation. And so what I would say ahead of time is talk to your kids.

Number one, talk to your kids if maybe you guys are getting out of debt as a family. Maybe you are saving up for your emergency fund. And this Christmas is going to look a little bit smaller than the last couple of Christmases because the other Christmases, you just charged everything on credit cards, you didn't track your spending, you were just like normal. And maybe now you're like, no, we're actually trying to get our money under control. We actually don't want to live paycheck to paycheck. We actually don't want to go into debt for Christmas and you're pulling back the reins. Talk to your kids. Set the expectation. Just talk about it. And again, it doesn't have to be like, Santa's quarantining from our house. This is Christmas kids, and he's not going to be coming.

No, just say, hey, guys, listen, this Christmas may look a little bit different, and that's going to be okay, because we're going to go do X, Y, and Z thing for free as a family, right? Like, there's things you can replace in these experiences around Christmas that don't have to just be gifts under the tree. And then for all of you that say, yeah, we've done baby steps one through three. Like, we actually have the margin to go and buy stuff, but, you know, how much do we buy? What do we do? How do we keep our kids not entitled? And it's all of that conversation happening. And it's like, yeah, what do you do? I mean, there's a little bit of me. It's like, I don't know. I don't know. What do you do? Because I feel like, man, my kids, they want me. Like, they want Winston.

And that is what I find time and time again. When you look back as a kid, sure, there may be one or two gifts that you got that stand out, right? Like, we got a point. We got a puppy one year that my parents bought us in a box with like the bow and all the stuff, right? It was the whole Christmas morning thing. We're like, a puppy. We're all like, we're so excited. We have all these pictures of these like big 90 sweatshirts and our glasses with this puppy. So all that to say, are there some things that you look back? You're like, yeah, I got my new bike or I got a puppy. Sure. But honestly, a lot of your memories from childhood are experiences, are things you did as a family or traditions, all of that.

So spending T-I-M-E, it is a gift, you guys. And I don't want to sound cheesy, like a Christmas greeting card or something. But honestly, the time and quality you spend with your kids is going to be such a greater gift than the stuff under the tree. Because let's be honest, half that stuff is going to be thrown out or given away six months later. So I just don't want you. as parents to stress about this, I don't want you going into debt for it. I don't want you to feel like you're having to meet the standard of how many gifts your kids

should have or how much money you should spend. Like, take all that away and just say, okay, what are things that we can do and instill in our kids that isn't plastic and just under the tree? So those experiences, those traditions, I'm telling you, they're timeless. Those are the things that your kids are going to remember. And it's something I'm telling myself, you guys. I'm telling myself, because the character and who your kids are, how as parents you guide and instruct your kids, Meg Meeker always said that you're not just trying to raise good kids.

You're trying to raise kids to be good adults. And I love that. So, like, what's the adult version that you want? And those are the things we have to instill in our kids. And even times of the year like this that we're just told, spin, spin, spin, spin, spin, spin, spin, spin, spin. Brace back. It's not bad to have a big Christmas. I'm not saying that.

but just watch your motivation, watch why you're doing what you're doing. And I think a lot of it kind of fixes itself. So I want to know from you guys, what are you doing? What are you doing to keep your kids not entitled, to keep them grateful to set a standard for your family that's not what the world says you have to do, but what's best for you and your family?

So comment below because parenting is hard, you guys. And these things, I'm like, I don't want to ruin my kids, but yeah, I want to enjoy stuff with them. I want to do all of it, but it is. It's like this tug of war in a parent's heart. But I think having the right motivation is so, so important. So I hope it helps. All right, you know, we love saving money around here, and especially those of you in babysaps one through three. So either you're saving up for your emergency fund, you're paying off debt, or you're saving up for your fully funded emergency fund. There are so many great ways for you to save money. And some very

tactical ways. When it comes to winter, there are some ways to keep your expenses, including your bills, low, low, low. All right, Christmas is coming. Winter is here. I mean, winter equals Christmas, and it's so great, it's so great, but winter also means that your expenses can hit hard in your budget. So we have 14 tips to help you keep those expenses down. And again, remember, when you are paying off debt and you're saving up for that emergency fund, any amount of money that you can scrape together to get you through those baby steps faster, that is the key. And hopefully these 14 tips will help you. All right, number one, turn off the heat. Yep. Okay, I don't want your family freezing. No, no, no. But this is, if you're not home, just turn it down. Even at

night, turn it down. These little adjustments means more money back in your pocket. Number two, pick the cheapest and easiest item on the potluck sign-up sheet. I have been in many potlucks in my day through all the holidays, and people need help with everything, whether it's paper plates and napkins, apple cider, up to big stuff like meat or sides. So listen, if you are on a tight budget and you still want to participate, that's great. Just pick the things that are less expensive.

So pace yourself. Just think of maybe the apple cider. or the napkins, things like that that, again, you need for the party, but it's not the most expensive thing. Again, money back in your bank account. Number three, turn off the lights and TV. This is helpful all year rounds, but I'll just be honest. It's what I'm terrible at. I'm the worst. I'm the worst. I'm the worst. I'm the worst. I'll leave a room. The lights are on. I'm like, ah. I grew up. My mom was always like, turn off the lights. You know, it's just part of me. in my genetics. I keep lights on. But what that means is I always know, your bills are going to be

higher. So listen, when you can think about it and get in the rhythm of turning off lights, turning off the TV is going to save you money. I promise. Number four, check your water heater settings. So this is interesting. Most water heaters come at a factory setting at 140 degrees. but really what you need, most households, just need 120 degrees. I mean, this little setting on a dial can save you close to $400 a year. You're welcome. Number five, don't run your appliances unless they are full. This includes dishwashers.

This includes doing your laundry, wait until everything's full, and then run it. Again, save your money. Number six, check your life insurance policy. Okay, I know it's a little bit of a left-hand turn, but listen, even if you have life insurance, you might be paying too much for the wrong kind of coverage. So here's what I want you to do. I want you to get a term life insurance policy, and I want you to get the best rate possible. So you want to check out Zander Insurance because they make it super easy.

You plug in your info online, and Zander will shop around for you and find the best rate and coverage for your family. So just go to zandra.com to get your free quote today. And yes, it is free because we're all about keeping expenses down right now. So that will save you even more money. It's a free quote. But you really need life insurance, you guys. So make sure to check that out.

Number seven, start meal planning. Now, food is the one area in people's budget that they tend to overspend on, including myself. It is so hard, and especially around the holidays. So I want you to think through all of your weekly eating. This is breakfasts, lunches, dinners, and you can learn how to do all of this in my new meal planning and grocery savings guide.

And you'll even get a printable or you can do a digital meal planning template to keep you on target. So click the link in the show notes or you can just Google Rachel Cruz meal planner to help you plan out your meals and save you money. Number eight, budget for holiday food. So again, kind of like what we're talking about in the meal planner, but just know what you're doing.

Look at your calendar ahead of time and say, okay, here are the meals I'm going to be hosting. Here are the parties we're going to. Here's the holiday baking we're going to do. Here are the potlucks we're going to join. I mean, like all the different stuff, just look ahead and be intentional and know what is coming up. Number nine, create a Christmas budget. So this is really important because during Christmas, you're spending money on a lot of lot of things. So whether it's parties or gifts or food or experiences, it just feels like we spend

so much money. So what you have to do is just be prepared. And when it comes to a Christmas budget, I have a video on this. I'll put the link again in the show notes to walk you through specifically how to create this. But I don't want you going into credit card debt. I don't want you overspending. I want you to be in control this Christmas to be able to spend what you have so you can enjoy it, and the January you will be so thankful for the December you. Number 10, track your Christmas spending as you go. So it's one thing to create the budgets, but you actually got to do something with it, which means you've got to track what is going on. And every dollar is our budgeting app. It's amazing, and it helps you track and be able to

see what you have in each category. So this is very helpful. You can do this with pen and paper, whatever it is, but just know when you put the work in and you know actually how much is in each category, you're able to stick to the budget. Number 11. Rain in other spending. So look at the budget and say, okay, what are areas that we can cut back? Maybe the last four months you overspent in certain areas, or you think, oh, you know, we could probably cut back here or there and do it. It's amazing. When you are intentional and you live on a budget, I promise you're going to feel like you've got to raise. Give fewer gifts.

I kind of sound like the ranch. But listen, again, especially those of you in babysubs 1 through 3, you got a tight budget, and that's okay. And so you're going to have to be able to say, okay, here are the gifts we're going to give, here are the people we're going to give to, and just know ahead of time, because there's going to be 18 different things,

whether it's secret Santa parties at work or maybe your third cousin wants a Christmas gift, and they're just having a baby, and they want a baby getting it. And it's just like, oh my gosh, there's just so much bullying at you. So maybe you just say, hey, this Christmas, it's not going to be every Christmas for the rest of your life.

Maybe this Christmas, we just rain back and we just give X. And it's going to be okay. It's going to be okay. Number 13. Go in on a group gift. I love this one because there might be a really nice, more expensive gift that you want to give. Maybe it's your parents or, you know, a good friend. And you can go in with other people or siblings and say, hey,

let's get this big gift, but you only got to pay a fraction for it, and you still get the joy of giving it. Number 14, reevaluate old traditions and make new budget-friendly traditions. So look back and say, okay, what are things that we've done in the past, but they just cost a whole lot of money? Maybe you just press pause on those for this Christmas while you're getting out of debt or you're building up that emergency fund, and then later on you can press play and say, great, we'll go back to those. But just create some. new rhythms in your life that don't cost a lot of money during this season. All right, so there you go, you guys. 14 ways to help keep expenses down. I hope this is helpful because, again,

overspending can happen so quickly and especially this time of year. And while it's fun and it's exciting, I just want you to be wise about it and really think through what you're doing. Now it's time for Ask Rachel. So this is where I get to bring one of you here on the show. So I'm so excited to have Michelle on with me today. Hey, Michelle, how are you? Hi, Rachel. How are you? I'm good. Good. Okay, where are you calling from? I am in Andrew, North Carolina, which is near Raleigh. Which is near Raleigh. That's a good spot. That's a good part of the country over in there. That's so great. Okay, so first, I'm just curious from you. Where are you at just in your money journey?

So my husband and I are debt-free, except for our house. Awesome. Yeah, we're just trying to save up for a garage and all that exciting stuff. So great. Do you guys have kids? We have one child. He's 10 months old tomorrow. Tomorrow.

So sweet. Oh, my goodness. That's a good age right there. That's a fun age. Okay, so you guys, I guess, are you on babysaps four, five, and six then? Yes. Awesome. So fully funded emergency fund, no debts.

And, yeah, you're just, you're doing it. That's so great. So what's your question? So I hear on the Dave Ramsey show and on your show that never buy a house that is more than 25% of your income for the mortgage. Our house is about 7% of our income. Should we pay 25% or pay the 7% and then say after we buy our garage really just pile on the payments? Yeah. Okay.

that's a great question. So it's about 7% of your take-home pay. So with your income, 7% of your income goes to the mortgage, which yes. So we say up to 25%. So that's the max. So it's 25% or below. Do you feel like you have a lot of extra income at the end of the month just based on your expenses being somewhat lower than that 25%? Some months, yes. In the summer months, not so much. I'm currently in school to become an educator and I'm using the GI bill. I don't get paid while I'm not in school. So in the summer, we're a little tighter. In this last summer, we got a little nervous and my husband's like, hey, let's just pay just above the minimum. And if we have anything extra, we'll throw at it. Yeah. That's great. So when it comes to the mortgage, one piece of advice we always give is,

for instance, as an example, if you have a 30 year versus a 15, and you can't refinance for some reason. We say, well, then just pay on the 30 like it's a 15, but actually make it auto drafts right that you are consistently paying on it because I think what happens is we think, oh, well, if it's a 30-year mortgage, then we'll pay like it's a 15, but then life starts happening, right?

And money, that doesn't always happen. So I'm saying all that say, that's the same mindset with you guys, that if you said, yeah, we want to pay more on the mortgage, that auto-draft makes sense. it very easy because you have to work around it, basically. It's kind of like a black and white. Like, yeah, it's going to be coming out. Are you hesitant about it? Are you wanting to bump it up to 25 percent? Yes. Yes. So I want to bump it up because then I know by 23, I think it's January,

we would be paid off. Yeah. But my husband's like, well, what if we want to build a back patio or poor concrete or just like, you know, put money into the equity of the house. Sure. And then in the summer months, it's so tight. So I guess we kind of go back and forth. So your lowest month, let me ask you this, your lowest month during the summer, what percentage would your mortgage be? Normally it's 7%.

What would it be in your lowest month? 7% because I base the budget off of our lowest income. Oh, so it's 7% the lowest. Okay, so then what is it on a regular? Like, 4%. Yes. Yeah, I'm having to do math. Pump that thing up. Because you have the margin, is what I'm saying,

is that you don't have to go all the way to 25%. If that makes him uncomfortable, say, okay, let's just go to at least 15%. You could at least double it, create a lot of grounds. And if, yeah, if you guys want to save up for something, then save up for it on the side. But, I mean, if that 25%, if you've done the math, and you know that's the fastest you can get out of doubt, which I think you could even get out of debt faster than that.

But that 25%, I would make it as diligent as possible to do that every single month, and maybe to make him comfortable and to meet in the middle, maybe bump it up, double it, so go to 15%. And then live in that budget, and you'll start to see that's your new normal. And again, with the margin you guys have, you're going to be able to say, okay, we could even throw even more at the mortgage. But you are on baby steps four, five, and six, which is where we always say that's where you can kind of take.

your foot off the pedal, right? One, two, and three. I mean, it is just like game on. Like, you're just going. But this is the time you're right. That if you want to build a deck, that's when you get to, because you're on baby steps four, five, and six. You get to do other things. That baby steps six are paying off the mortgage early. It is a goal, but it's not one that you have to be, like, crazy about. But I would say 15% of your income is not being crazy. So if I were you guys, I would bump it up a little bit where he feels good, you feel good. and again, maybe it's that 15%. And then being diligent, say, let's try to pay it as if it's 25% of our take-home pay.

So you'll pay a little bit more, but it won't be that automatic. Does that make sense? Okay. That does make sense. Does that feel good? How do you feel like that? Or you just want to do the 25? I mean, I want to do the 25, but me in the middle, you know, he has to be comfortable, too.

And we keep telling ourselves when I graduate and get my job as an elementary education teacher, we'll just live how we're living and put my entire paycheck on the house. That's exactly right. So I'm excited for that. Yeah. And you know what? People that we talk to so many times on average, we're finding it's that the mortgage is paid off in seven to eight years.

And for you guys, like you said, you're going to have a whole other salary to help pay off that mortgage. And that's what we find is once you are debt-free, you start to see as life happens, you know, people transition jobs, they get raises, they get promotions, they add in an extra income. I mean, life starts to happen, which usually is an increase is what we find with many people. So hopefully that's the story for you guys and you can pay it off even faster than that date you had set out, which I think you guys can. So I hope that helps, Michelle. Thank you so much for the question. Thanks for having me. It was a pleasure being on your show. I watch you all the time.

Oh, so great. Well, thanks. Thanks. Thanks. And you're living proof, you guys. There she is. Michelle, living proof. Baby steps four or five and six can happen. And I love the thing about, money and this whole plan is that, yes, there is black and white baby steps of like, you do this, this and this. But then within that, you get to create an environment that you want in your household. And it's like, yeah, okay, we don't want any more than 25% of our take-home pay going to our mortgage. But if we have the margin and the ability to pay it off even faster, what it does in the momentum and getting that mortgage paid off, I mean, it's an incredible thing, which you get to decide that percentage.

And that's the great thing is it's your life. And that's what we always say on the show, to take control of your money and create a life you love because I truly believe that. Now, if you guys have a question and you want to be a guest on the show, you can ask your question on any of my social media channels. So YouTube, Facebook, Twitter, Instagram, anywhere.

Just ask a question, and our team will contact you. So, well, I want to thank Michelle so much for coming on the show because it's such a great question, loved talking through it with her. And you guys, thank you so much for listening. I hope this episode helped you when it comes to your money. And if you have not hit that subscribe button, make sure to do it for the Rachel Crewe Show podcast. And if the spirit leads, you can leave a review. As always, make sure to take control of your money and create a life you love.