The Rachel Cruze Show - Major Misconceptions Keeping You From Building Wealth

Episode Date: July 31, 2023

Your comfort zone can feel like your best friend . . . but actually be your worst enemy when it comes to being smart with money. In this episode, you’ll find out what I’m learning about comfort, get a breakdown of how to budget a tight income, and challenge your gender stereotypes around money.   What you get in this episode:  ·      5 Impactful Things I'm Learning Right Now ·      How I Would Budget $3,600 a Month ·      Controversial Gender Stereotypes Around Money   Helpful Resources:  ·      Christian Healthcare Ministries  ·      EveryDollar ·      Ramsey Car Guide ·      Ops Games Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries, Op Games. Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

You ultimately hold the power and potential when it comes to your money. Your gender, your relationship status, your background, nothing needs to stand in the way of you being able to build wealth. Personal finance is 80% behavior. It's only 20% head knowledge. Hey guys, welcome to this episode of the Rachel Cruise Show podcast. I'm so glad that you're here. So in this episode, I'll debunk some controversial money myths about men and women.

then I'll go over how I would budget a $3,600 monthly income, so you don't want to miss it. But first, let's ship in to five impactful things I am learning right now. Take a listen. Today I'm going to share five impactful things that I learned from reading a book. It was a book that I read over Christmas, and I will give my brother credits because he brought it, and then he bought a copy for my dad.

And then I read it, and then my mom read it, and we all passed it around. but the book was called The Comfort Crisis. And you guys, I have a big reader. I love to read. And this was one of the best books that I have read. And so it's in the nonfiction category. A lot of my books are fiction.

But it's really, really good. So the author's name is Michael Easter. And it just, like, really pushed me out of my comfort zone, you guys, as I was reading it. Because the whole premise is basically how we are a culture that is so dependent upon our comfort, aka the comfort crisis. So everything, like physically, even our houses, our cars, the air control that we have of the temperature, where we are physically, where we are mentally and socially and spiritually, everything is just to keep us comfortable and safe and all of it.

Now, that sounds very positive at first, but what ends up happening is you limit your growth in who you are as a person because you never push limits outside of being comfortable. So I'm going to kind of go through a list of a couple of things that stuck out to me about the book because I think it also pairs a lot when it comes to money. So we talk a lot about things being uncomfortable, especially if you're in a season of sacrifice of paying off debt. Maybe it's, gosh, we're funding retirement and it just kind of feels like a stretch.

Like whatever's going on, there is a growth that is happening financially when you push those limits. So, again, lots to learn here. But at the end of the day, I want us all to be able to recognize patterns in our life, you know, habits that we create. Because when you actually understand

those, then you can take control of your life and understand, okay, I need to change some of that. And I want a more meaningful life over here. So maybe I need to kind of push my limits in that area. So let's dive in. Okay. First and foremost, I would say one of the biggest things that I took away from the book is that we live in a world where everything is created specifically for our highest level of comfort. You know, you think about it and even the commercials that you see on TV, maybe the ad to your own podcasts, it's all about like a comfortable mattress and soft sheets and comfortable tennis shoes and luxury vehicles. I mean, all of this. I mean, it's like every single company is marketing optimum comfort to its customers. I mean, left and right, it's just like,

here's a way to be comfortable. And the truth is, if we want to grow, there are things in our life that we have to be uncomfortable with because discomfort and resistance, that inspires change. So although, again, it's nice to be comfortable. I get it. If you have one of those products that I listed, like, I understand that. I have it too. But in a real way, you want to stretch your if you want to be improving in your life. And of course, this looks like a lot of different ways. So whether it's even physically exercising, even if you're running outside and it's hot, so pushing yourself.

Maybe it's actually getting away from your phone and technology for a bit. And fasting in a sense of saying, okay, I'm going to cut out a lot of this digitalness that is going on. We had a digital detox at our church that basically everyone went through for about a month and it was just so fascinating to see, gosh, if you don't have everything right there, it makes you look other places. and it's actually great. Maybe you just cut out luxuries that you don't need. So whether it's brand name clothing or really pricey coffee that you get all the time,

like whatever those cushions are in your life, it'd be interesting, a good experiment to eliminate some of them and just kind of see how your comfort changes over time, because I'm going to guess that pushing your limits in those things is going to help you grow. And especially when it comes to your money and your spending habits, looking at those and saying, okay, what if I was a little bit uncomfortable here and see where that takes you? All right, the second thing that I took away from reading the book is that too much information can paralyze our progress.

So, you guys, we have access to all the knowledge we could possibly want, and I think sometimes it does more harm than good. So, for example, the author talks about eating healthy, and he's like, there are millions of studies, and they all seem to contradict each other when it comes to eating healthy food. I mean, there's stuff about pesticides or organic. or do you wash your fruit right away? Or should I just eat the fruit that is going to help me with my immune system?

Do I need to make sure that it's perfectly clean over here? What if all the peaches at the grocery store have little bruises on them? You know, what's the right way to make, you know, some good avocado toast? Like, whatever it is, it's like we just get so obsessed with it. And his point is, instead of just obsessing about all of the stuff when it comes to healthy eating, just eat healthy. Like, just eat healthy. Like, the problem isn't that we're not eating, you know, healthy the right way.

It's the fact that as a country, like, we're not eating healthy, right? So I just love the idea of like, oh, my gosh, actually understanding that there's so much information and we can get paralyzed by trying to figure out how to do it right when actually just start moving in the right way. And our bodies are resilient. So we have to stop being so afraid of every little thing that's going to, like, mess up or all of this stuff, right? And just actually dive in and say, hey, I'm going to actually start making steps towards progress when it comes to, well, in this case, eating healthy, right?

But listen, this can even apply it to your budget. It can apply to your investing because progress is progress. And some people want to wait around where they're looking for every little thing and for the market to be exactly where they wanted. And it's like they get so paralyzed by all the information. But I think sometimes people feel like saving just, you know, $10, $50, even $100 a month won't make a big difference in the long run. But the truth is it will.

So like just start, start somewhere and slow in the way. instead of you guys wins the race. So set up that sinking fund and contribute small amounts to it over time to save up for something that you're wanting. And trust me, you're going to look up in six months and just think it's going to be amazing to see how further along that you would be versus if you're still paralyzed by all the stuff and trying to control all the variables and do it exactly right and all this stuff. So I would also say the same principle applies to generosity too. So just take out a few smaller dollar bills to keep on hand and look for opportunities to give here or there. So it's like these small acts that we can do give us power over our situation.

All right, speaking of resilience, my third takeaway from the book is that we were built to do much harder things than we actually have to today. So if you think about it, most humans throughout history never had cars to take them places. They didn't have air conditioning to keep them cool or stoves to cook on. We can literally say, I don't want to say, I'm going to say her name and then probably if you have me. If you're listening to this, you're just going to go off. But A-L-E-X-A, say her name,

and you just say, I need, you know, more toilet paper or what's the weather today? Like, whatever it is, you get anything you want right when you want it. And when the world is at our fingertips like that, it's so easy to forget that our bodies were actually made to do stuff,

to like run long distances and carry things on our backs. He talks about rucking, you have like the backpack with all the heavy stuff. It's like literally how we were built was to do strong things and things with our bodies. But today, you know, in so many of our daily routines, it's like we go to an office maybe and we sit. Like, we just don't have to challenge our bodies like they were created. So it's just an encouragement, you know, just to move and to do things that you were created to do.

And the fourth thing that I learned is that everything we're talking about is true for our kids as well. So if you're a parent, you can probably relate to wanting to give your kids. It's everything, right? It's kind of natural, and it's a beautiful thing to want to protect and give comfort to our kids, but it's also a place that, man, you can overdo it at times. So we can't shield them from everything. And after reading this book, I realized, oh, my gosh, yeah, our kids need to be pushed to the limits, right? There was a section in the book and it talked about different traditions and different cultures

and different times of history of, like, you know, it's like there were certain cultures and tribes that would, like, send their kids off. like when the boy turned 12 or whatever, and they would take them like miles away, drop them, and they had to figure out their way back or they'd have to survive for two months out in the outback. Like, I mean, it was like the crazy stuff that a tribe would do because they had to have people that had strength

that could figure out, you know, having stamina for their body. And so what that really paints is this idea that, yeah, you have to be a useful human being. You have to understand how to build shelter and find food and have stamina to come. contribute to the tribe. So they like kind of force that upon their culture. And they had to thrive in that. And again, now it's like, gosh, every little thing of your cold, I have the jacket for, like, it's like, I don't know. It's so funny. I just feel like how we just take care of,

especially our kids, which I understand, they're kids, but also it's like, you need to be uncomfortable. You need to be uncomfortable. And like, that's a good thing. You've got to figure it out. Okay, so obviously I'm not suggesting that we go drop our kids off in the Outback and make them survive for a month. I'm not saying that at all. But I am saying, gosh, what can we do with our kids to stretch them and to actually let them have some discomfort in their lives because let's be honest, they're kids and they're going to want goldfish and cookies and sit in front of the TV all day. Like, that's, if you ask them what they want, some of them, that's what they're going to choose. So it's actually saying, hey, let's push them out of

their comfort zone, make them do things that are uncomfortable because it's actually going to better them as they grow up to be adults. So maybe it's teaching them chores. Maybe it's saving up money for something that they have to like delay gratification. Maybe it's going through targets and telling them, you know, you can't buy a toy. We're not going to go down the toy aisle. Or maybe it's limiting, you know, their tablet time or screen time. Like, hey, we're going to cut that out. You got to go figure out something to do.

Be bored. Figure something out. So it's kind of pushing them out of their comfort zones, which I think is really good because it builds strength and stamina and who they are. All right. Finally, the fifth thing that took away from the comfort crisis is really what I've been talking about the whole time. And that's just perspective is all you need to make hard choices that are really worth it in the end.

So we all have different money habits that can just be comfortable to us. And some people are natural spenders, others are natural savers. And most of these tendencies were influenced by the environment that we grew up in. But if you're at a point in your life where you want to take control and build long-lasting wealth, then sacrifices probably will have to be made. And it's not always fun to tell yourself no. but what I've realized is, you know, I'm an adult, you're an adult, and we have to make financial decisions every single day.

So whether it's paying down student loan debt or credit card debt or maybe it's making a smart car purchase that you're not buying a brand new car, maybe a used car, maybe it's when you're looking at a house, and you're actually deciding, you know, what can I actually afford versus just what do I want? You know, you're making decisions all the time, you guys. And I think it really is important to say if you want to get ahead, there's going to be a level of sacrifice. But it's not going to be forever. Like, I don't want people living this idea that, gosh, I'm going to have to sacrifice and be this intense all the time with my money.

No, if I was telling you to do that your whole life, I feel like I would be a crazy person. But it's to actually have something that you can show for that. So it's saying I'm going to sacrifice my lifestyle to get out of debt so that I can say yes later down the road. Or it's, I'm going to choose a house that we can actually afford so that we can do other things with our income. So it's really all of these important. things and these sacrifices that are worth it. And if you're ready to make some tough but powerful changes and how you handle money, I would really encourage you guys to look at every dollar. This is the budgeting app that I use every single month to plan out my spending so that I

know exactly where it's going. And you can download it for free today. So make sure to do that. And also check out Financial Peace University. This is our nine-week course that teaches you about the Ramsey Baby Steps and it shows you exactly how to make better choices with your money, no matter where your starting point is. And for the record, every dollar and FPU are a match made in heaven. So do both of those. You can find both those tools at ramsysolutions.com.

So make sure to check them out. All right, you guys, the comfort crisis. It's such a great read. I mean, I just really skimmed kind of the broad ideas of it, but it really is a very interesting book to kind of push you in your limits and how we are today as adults.

So make sure to share this video with a friend who may appreciate get some tough loved when it comes to the mindset shifts that needs to happen for a lot of us. Today I'm going to be looking at one of your budgets. So so far I've done this with two other budgets where I explained step by step what I would do in these real life situations with these real life incomes.

So I'll put a link to those two other budgets that I've done, links to the videos down below. So make sure to check those out. But today I'm going to be going over one of your monthly budgets that's around $3,600 a month. And you guys on YouTube specifically were asking for this. So I thought, yeah, let's do it. All right.

So let's take a look at this $3,500 monthly budget. So again, in real time, this person is sitting in their numbers. And just looking overall, so they have their main income, which is about $3,100 a month. They have three different side hustles, which is very impressive. $200, $100 and $100 coming in with a total of $3,570. So going down there, giving 10% of their money, which I always recommend people doing, which is just fantastic. They don't have any money plans for their emergency fund savings. So I'm going to assume that their emergency fund of $1,000 is completed and anything else they have coming in is going towards their debt.

So that's what I'm going to assume. They have a sinking fund to replace their car. They have a dental surgery that has $800 in it. Coming up, rents for $820. The convenience fee of $35, electric, gas, car repair buffer, groceries, restaurants, health care, clothing, rental, spending money, miscellaneous. And then here are their student loans. They have four different student loans, it looks like. So a $3,000, a $10,000, a $10,000, a $15,000.

They have planned to, I guess, pay this amount for this month, which, is probably their minimum payment, which is great. And so far, yeah, their budget technically is in every dollar budget right now. Okay, so always the goal when you are on baby step two is you're going to put as much money as possible towards paying off debt. And we talk about you guys, scorched earth, like, you're doing nothing, but putting money towards this. So what I would do in this situation is, again, I would go back through and say, okay, where can

I up my income and where can I decrease some expenses? So again, this isn't going to be forever. But for this one, the clothing rental, I'm going to assume that's just like a luxury. So I would say, yeah, you're not going to be spending any money on clothes. So let's just pretend that you don't buy anything new clothing wise for four months. Okay. That's $400 extra going towards debt.

So for this, I'm going to go ahead and just put zero, which gives us $100 left. And then, I mean, restaurants, you guys, I understand that. We talk about this a lot, but it's so easy to say, well, I need to have some breathing room here and there. But when you have an income like this with that same amount of debt, it's basically the same amount of income to debt, there has to be major sacrifice at some place.

So I personally would say, no, I'm going to be eating at home four months at a time. It's not going to be forever. But for this, that's what I'm going to choose to do. So I would lower that, which means in that case, I would probably bump this up to 300 for groceries, because if you're not going to be eating out, some of those meals, it's going to be going to groceries, but there's ways to eat really inexpensively. And if this is for one person, which I'm assuming it is, we're going to just say that,

yeah, for this situation, that that's what they're going to spend. The only question I would have is for the dental surgery, eventually that's going to be paid. And if they have dental insurance, obviously, that's going to help. But the dental surgery will not be there forever. So they're saving up for it, but maybe in the next like three months, this line item will go. go to zero, which is going to be very helpful because they would have had the surgery and they would be done. So again, we're going to pretend we can do a budget, we'll do a mock budget for this month specifically. And then I think we do one you guys again for in three months. And let's just pretend that the surgery is done because that's going to show a lot of traction. So for July, this is what I would

do. And then again, because of the income, I would find a way to pick one of these side hustles where I could work more. Because even if you're working, you know, a full day on Saturday and and then even going and working a full day on Sunday even or for five hours on Sunday, it's like every moment that you have to go into work and to make this income for this season of life, the more traction you're going to see. So again, this is a lot of sacrifice for this specific budget, but because of the numbers, that's the reality of, to see any kind of movement, there has to be that sacrifice. So unless their main income, their main job, their main salary, unless that's going to be

increased at some point, whether taking a different job or getting a raise, these side hustles is the best bet. So just for the fun of it, I'm like, yeah, let's just say, you know, you add some more hours either at evenings or on the weekend. And I'm going to just play around with the numbers. But let's just say you can bump it up like another 150 bucks in that. So that would be $250 there. So that's $300 that we have left, which this feels like,

that feels like a lot, which is great. It's a really tight month and I understand it, but we want to get these student loans knocked out as soon as possible, especially this $3,000 one, because that's going to free up an extra $50 a month once it's paid off. So in this case, they'll have $350 to go towards their student loan. But at that rate, it's going to take them, again, close to 10 months, nine months to pay that off where I want it even faster.

So that's why, for the fun of it, if you go up and look at the dental and that's at zero, then that's an additional $800, you guys, which is just phenomenal to add. So you can get that paid off in three months versus nine months. So it's amazing how a few hundred extra dollars moves the needle a lot with paying off this debt. And then the exciting thing is, too,

let's just say that this is paid off. So let's just trash this for the fun of it and say, yeah, in three months, once that's completely paid off, then you're going to look to see, okay, you have all of that. left to budget. So you have that again, all of that money is going to be pushed towards that $10,000. And then, again, hopefully wherever it's picking up extra is going to be put towards the

debt snowball. So with an income like this, with the debt amount, you guys, again, the shovel, we always say versus the whole, it makes a difference. And so how much income you have coming in is really important and where you can cut. But I give kudos to whoever submitted this because they really have cut back a lot. I would even just cut back a little bit more because it's every dollar matters. Jade Warshall, one of our Rams personalities, her and I were talking about this on air on the Ramsey show. Her and her husband, Sam, were paying off over six figures of debt, like $600,000, over half a million dollars, you guys in debt. And they were at the grocery store. And he added something in the car, and it was just like six bucks. And she was like, that's not on the list.

That's not on the list. And he's like, Jade, it's not a big deal. And she's like, no, but it is. like that $6, it's everything. We're so close because any dollar going towards this gets us that step closer, which again, for some people, I know that sounds so extreme and so crazy. But there's a level of that kind of sacrifice that you're like, okay, if I do this for a short amount of time, that means after all this is gone, all this debt. And for this person, let's just have fun and say, okay, let's pretend they paid off all

their debt, which will take them a few years. But once it's done, and then in a few years, hopefully they've gotten a raise at their job, like their income will continue to grow. That means they have close to $1,500 right now left over. And again, with some raises and other things, it could be more than that per month to do stuff with. So it just shows the power of when you free up your income from debt payments, how much more you have to use for your life.

So again, I really applaud this person's budget because they've really done the work. They have a lot of side households. They're working hard. And they've made a lot of sacrifices on their expense side. So again, sometimes that this is the situation and it's a longer road for others. But if I were this person, this is what I would do with my budget. Again, it's short-term sacrifice for long-term gain.

All right, thank you guys so much for offering up your monthly budget for me to work on. And if you guys have a budget that you want me to look at, make sure to DM me on Instagram and my team and I can reach out to you for more information about future episodes. And remember, there's never any shame around money. So it takes a lot of courage for someone to be. peek inside your budget. So again, thank you to the person who submitted this. And if you're interested about budgeting, make sure to check out every dollar. This is our budgeting app.

It is 100% free to download. So I will put a link in the description so that you can check it out. And also, if you're curious about the course that I mentioned to Financial Peace University, you can go to Ramsey Solutions.com to learn more. And I will put a link in the description as well. FBU, it has helped tens of thousands of people change their financial futures. so I promise you will not regret it. Today we're going to be debunking gender stereotypes around money. So there was an article that came out in May around money myths, specifically to women. And the article basically points out some very common misconceptions about the way women handle money

and debunks some of those myths based on facts. But stereotypes go both ways. And when I saw this, I immediately thought of our smart money happy hour episode that I did with George Camel on this exact same topic. And when George and I did it, we actually hosted a live episode in front of a studio audience where we defended gender stereotypes around money.

So we actually took the opposite approach, and I defended the men and he defended the women, and it was hysterical. So on this one, I'm going to react, though, to a few of the stereotypes from this article and I'm going to pull in some of the male stereotypes that we also discussed and debunked as well. And my ultimate goal is that you understand,

as my friend Dr. John Deloney says that facts are your friends. And so you don't have to live by what the world says you are capable of based on whether you're a man or a woman, whether you're wealthy or broke, whether you're in debt or out of debt, or any of it. Because the truth is that anyone can take control of their money and steward it well, manage it well, and actually when. So the first myth that I want to debunk is that women should wait for a spouse before investing in a big purchase like buying a home.

This can be further from the truth, you guys. Listen, my philosophy has always been that you should feel comfortable buying a home when the right time is for you, you and your money. So it's 20, 23, and there's no reason that a woman needs to postpone buying a home before she's married. Okay, so if you are out of debt,

if you have a fully funded emergency fund of three to six months of expenses and you have a great down payment and you're going to be in that city, that location for the foreseeable future, then it's great. okay, then it's great. Go buy a house. Homes are pretty much a guaranteed appreciation over time. They're going to grow in value. So it is a wise investment for your money because it's going to actually work for you over time. And it's a smart move, whether you're a man or a woman,

whether you're married or single. But again, if it's a right thing for you and your money, specifically, if you're in that position, and that's the next step, do it. All right, number two is let's throw out a little male stereotype, should we? A lot of people think that men are too stingy. Sometimes it's not about whether or not you spend the money, it's about the why behind it. So there's actually some emerging psychology to support this because research shows that men are actually future spenders. In 2018, a study found that men are more likely to spend money on big goals like retirements, vacation, or car purchases down the road, whereas women seem to make more smaller purchases day to day. And, you know, we find that it's, you know, we find that it's

It's not that men are stingy or afraid to spend any money. It's that they tend to prioritize a certain kind of spending that may be less frequent. All right, on the flip side, stereotype number three is that women spend too much money. So this one doesn't surprise me. Women get labeled as like shopaholics. You know, that classic joke that husbands are afraid every time their wives go to targets. Winston kind of relate to that. But listen, the reality is that women have held what's called the buying power in most homes.

So this means that women most likely are doing most of the shopping for the homes, whether it's groceries or they're buying like paper towels, back to school shopping for the kids. Like whatever's going on in the home, the woman is usually doing it. She's actually called the CFO of the household. So women are spending more, yes, but usually it's on the behalf of other people in the household. The fourth gender stereotype is that women don't know how to pay down debt and invest. Of course, I don't agree with that statement.

men at all. And to be honest, this is exactly why the seven baby steps were created. Financial literacy has no gender, you guys. It's for everyone. Budgeting, paying off debt, saving, investing for the future, creating margin for generosity. They're all built in the baby steps so that everyone in every walk of life can achieve financial peace and build wealth. And I've been able to meet with hundreds of single women who are debt-free. They've paid off their homes early. They actually reach a net worth of a million dollars before they're even close to retirement age. So women definitely know how to pay off debt and invest. And with more and more women entering and staying in the workforce, this is becoming

more and more true. All right. The last gender stereotype is for the guys that men tend to save more than women. And actually, according to the data, this is actually true. Again, studies have found that a lot of men tend to think long terms. So saving for a rainy day or setting side money for retirement is actually more of a natural habit for men, especially if they live in a household with women who are taking responsibilities for the daily and weekly spending needs for the home.

In 2022, a study found that on average, women were able to save around $3,100 annually, while men were saving around $7,000. Now, obviously, different genders are in different industries. There's pay gaps in some of that. plus it's so more common for a woman to stay home once kids are in the mix. So those numbers do go down and they're affected by all of that. But like most things, there's a gray area. But the fact is, according to the research, that men do tend to save more than women.

And there you have it, you guys, gender stereotypes, fact-checked, and debunked. And the lesson for you to take away is that you ultimately hold the power and potential when it comes to your money. Your gender, your relationship status, your background, nothing needs to stand in the way of you being able to build wealth. And nothing does stand in the way except for you. So that's why we always say personal finances, 80% behavior. It's only 20% head knowledge.

You are the one that's going to make a change in your life. And this is honestly why I'm so passionate about budgeting because I think creating and sticking to a monthly budget is one of the most powerful things that you can do to take control of your money, no matter who you are or where you stand financially. Oh, men and women. So many differences, but also some similarities. Well, you guys, thanks so much for listening to this episode of the podcast.

Make sure to share this episode with a friend. If you have one that you were thinking about during this, and you were like, gosh, they need to hear this. Please spread the word and also leave a review. It is so helpful for our team and it's so helpful for the algorithm to get this show in front of people so that we can spread hope when it comes to people and their money. All right, you guys, thanks again for listening.

And remember to take control of your money and create a life you love.