The Rachel Cruze Show - Manage Your Money So You Never Go Broke

Starting point is 00:00:05 All right, if you're watching this video or any video on personal finance, maybe you just want one thing to know how not to go broke. And listen, let's be frank. We all know it has been a rough couple of years, you guys. I mean, it's been really, really difficult for people. I mean, honestly, you look back since COVID and I'm like, everything's stuff's changed. Like, I feel like prices have gone up. People's jobs have changed. Like, there's been a lot of shifting.

Starting point is 00:00:29 And when that happens, it can make money that much more difficult. And as inflation continue to rise and all of it, It's just been a really hard couple of years. And I think we can look back over the span, you know, of 40, 50 years. And there's times where things are good and, you know, people are doing great. And then there's just other times where it's hard. And I feel like, yeah, those were a hard couple of years. So if you feel like, gosh, I am paycheck to paycheck.

Starting point is 00:00:52 I feel like I kind of am broke, but I'm trying my best. You are not alone. But again, I'm glad you're watching these videos because I want you to go above that, right? I want you to get to a place where you are confidence and you feel very assured that, Yes, I know what I'm doing and I have a good plan so that you're not just surviving, but you end up thriving too with your money. And so today I want to teach you how we can do this. So make sure to stick around because I'll share what to do after this so that you can build

Starting point is 00:01:20 long-term wealth. But we're going to start with the basics of how not to go broke. But first, make sure to subscribe to this channel and share this episode with a friend. All right, the first thing I'm going to tell you to do, we're just going to get right to it, you guys, is I want you to budget. So downloading every dollar, which is our budgeting app, is incredible. Because doing a budget every single month is really one of your first steps of being intentional with money. Part of this idea of feeling like we're out of control with money is that we don't know where our money's going.

Starting point is 00:01:45 And then the other thing that just sucks, but it's true is like when things are just in our head, it can be magnified so quickly. And if you have any level of fear around money or scared of this, that, or this bill or that bill and you're not organized, that just magnifies. So having things visual gives you a level of control. It is really wise when you actually look at things on paper or on your phone or on Excel, however you do it, but to see your actual numbers. Because from there, you're starting from reality, not what's been made up in your head. And so every dollar is a great budgeting app because it's going to help you do this. And within that app, there's teaching videos. You're able to actually learn how to budget really well.

Starting point is 00:02:24 And so we set this up because, again, we really believe this is the first step of getting control of your money. So downloading every dollar and doing a monthly budget is going to be so helpful. Number two would be to get your money in the positive. So a lot of people are living beyond their means and they have debt. And so when their income comes in, for some people, you know, they're short a couple hundred dollars or even more or less. And they're making that up with a credit card. And what happens is you end up in this cycle. And so what you want to do is, you know, kind of stop where you are, stop digging in that hole of debt and just say, hey, we're not going to use debt anymore.

Starting point is 00:02:59 So now what does that mean? if that means that you're short a couple hundred dollars a month, then we have to make up for that. So whether that is, you know, cutting expenses, whether that's earning some extra income, whatever you do to get in the positive is key because your net worth is going to be in the negative. If you have a lot of debt, that's what ends up happening if you borrow on all of this. So over time, I want to get you to the positive so that you actually have momentum going forward. So before you start paying off debt, you do need a cushion to make sure that you have money when unexpected things come up. so it doesn't put you back into debt.

Starting point is 00:03:33 But before I share what I mean by all of that, I do want to tell you about one of our sponsors, delete me. Do you want to know something that absolutely blew my mind? One third of the U.S. population's background info is now public. So for 115 million of us, our info is just out there for anyone to find. And this is stuff like our names,

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Starting point is 00:04:11 So sign up today at join deleteme.com slash Rachel for 20% off. Get that code, you guys. It's fantastic. So click the link in the description and protect your online privacy. All right. Number three is to get a starter emergency fund of $1,000. So again, we are budgeting. We are stopping day.

Starting point is 00:04:30 We're not digging in that hole. And then the next step is to get $1,000. Now, 40% of Americans can't cover a $400 emergency in cash. So if you are one of those people and you're like, I really have, I have no money, $1,000 is going to feel like a lot. It's going to feel like this uphill battle. But I want you to do this really, really quickly. I think this is the key of starting to win with money as you're getting these wins. So, I mean, like, I want you to sell stuff, get an extra job.

Starting point is 00:04:56 I mean, do whatever you can to get $1,000 very, very quickly. and that's going to be your starter emergency funds. And this is enough for the short term. A lot of the things that come up to be able to cash flow are like three, four, five hundred dollars. So this fund will help you get there if you have a flat tire, you know, a last minute doctor's visit, like things like that that come up. This will last you. It won't last you long term, but again, for the short term, that $1,000 emergency fund. Next is number four, and that's to increase your income and cut expenses. So when you get to this point, this step may help you fund that emergency fund. but I want you to start doing this because if you are in the negative, you have to find that margin.

Starting point is 00:05:36 And being able to do that is to earn extra money. And this is like a side hustle, like tutoring or car detailing, you know, hosting at a restaurant a few nights a week, a retail gig on the weekends, you know, refereeing sports. Like whatever you can do to earn some extra income on the side is going to be so helpful. And then at the same time, cut your lifestyle. I think what happens is needs versus wants really kind of blends in in our world today. Because if you have something that you've been using for like six, seven, eight years, you kind of bucket it as a need because it's just all you know. So I want you to go through all your expenses and say, okay, is this food?

Starting point is 00:06:12 Is this shelter? Is this utilities or transportation? That's basically like what we need right now. So subscriptions, gym memberships, streaming services, eating out, like things that you do not need, cut those out. That's going to free up some cash for you that's going to help you get margin. And you want to live on less than you make again to create that. margin. So when you're paying off debt, you actually have extra money at the end of the month.

Starting point is 00:06:34 Instead of being in the negative, you're in the positive to throw at getting out of debt. Once you do that, we come to number five, which is a fully funded emergency fund. So you're going to take that $1,000 emergency fund that you had. Once you're out of debt, you're going to bump that up to three to six months of expenses. And you can put this money in just a high-yield savings account is great. This money is not to be invested. This money is not there to earn money or to make you wealthy, this is there as a cushion between you and life. So when your next emergency comes up, you know, again, whether it's medical, a job loss, like anything that happens, you have this emergency fund.

Starting point is 00:07:10 I was talking to some people this weekend and they said, they did this and they said, Baby Steps three was a lifesaver because they both lost their jobs during COVID. And they were like, we had so many friends being like, I don't know what I'm going to do. I don't know how I'm going to like make money to be able to pay bills and to eat. I mean, like, honestly, it's kind of the scramble that ends up happening. but when you have three to six months of expenses sitting in the bank, there is a level of peace there. Yes, you're probably still figuring out how are we going to get a job. But overall, it is there to give you peace.

Starting point is 00:07:37 So lean into that security. It's a great place to be. So managing money, everything we just talked about really is part one. And then you can build wealth beyond that, which is part two. So if you're feeling overwhelmed by investing, you are not alone. So you can actually join Dave Ramsey and George Camel for a two-night virtual event on investing essentials March 4th and 5th. They're going to walk you through everything from setting up your 401K, picking mutual funds,

Starting point is 00:08:06 even real estate investing. So make sure to click the link below to get tickets or you can go to Ramsey Solutions.com slash events. All right, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - Manage Your Money So You Never Go Broke

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