The Rachel Cruze Show - Money Questions I Hear All the Time (and My Answers)

Episode Date: July 3, 2023

When it comes to money questions, I’ve heard it all. Questions like . . . “Should we combine bank accounts?” or “Do the Baby Steps really apply to me?” In this episode, I’ll answer those burning money questions, plus we’ll talk about what to do if your emergency fund doesn’t cover your emergency. What you get in this episode: ·     The Top 5 Money Questions I Get Asked ·     Will a Home Garden REALLY Save You Money? ·     How to Survive a Financial Emergency  Helpful Resources: Christian Healthcare Ministries EveryDollar                                                 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.   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

What does it look like when disaster strikes, or maybe you're facing a large-scale emergency that requires your entire fully funded emergency funds? There are some things that you can do and things you need to keep in mind if you or a loved one is ever in this situation. Hey guys, welcome to this episode of the Rachel Cruise Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about the most common money questions I get asked. then I'll go over how to survive a financial emergency. Then I'm going to talk about one of my new favorite hobbies, or Winston's favorite hobbies,

that can actually save you a lot of money. You don't want to miss it. But first, let's talk about the top five money questions that I get asked. Today I'm going to answer the top five money questions that I get asked. So I host the Ramsey Show, and I get to talk to callers every single week about their questions, and even on social media, I get a ton of DMs.

And listen, this is my favorite part of my job when I get to talk to people one-on-one and encourage them in their money journey. And also, some of the calls can be very entertaining. Some of the social questions I get can be very entertaining too. But what's crazy is I get a lot of the same questions a lot, all the time. So now, to me, our advice seems like common sense, but I know it's definitely not common sense to the world.

So today I'm going to talk through the top five things that I want people to know when it comes to very common money questions I get. All right. The first question I get a lot is, how do I get my spouse on board? This is a tough one. I'm going to be honest, because you are inviting another person, right? If I'm just talking to you and helping you control you and you get to make decisions for you, that's one thing. But when you're trying to get someone else on board, it can be really tough. So what I would tell people is, number one, tell them your why.

So if you're just like, oh my gosh, I want to never go on vacation or go out to eat and we need to take all of our money and we need to put it up the credit cards and blah, blah, blah, blah. Your spouse may be like, you're insane. Like, what are you talking about? So go a little bit deeper and talk about why do you want to do this? Why do you want to get out of debt? Why do you want to stay for retirement? What is your why? Is it could just be fear of like, oh my gosh, if one of us loses our job, we don't have enough money to cover next month's bills because there's no margin.

Maybe it's fear, which is not a great motivator long term, but short term, it'll get you going. Maybe it's that you don't want to live how you grew up. I talk to a lot of people. Like, I want to give my kids a different life than I had. Like, whatever it is, express your why, and your why shows more of your heart than the tactical side of money. And that's where you and your spouse can really connect. Number two, show them the actual numbers.

I find this is really helpful for husbands to see ladies out there. When you're like, hey, I want to get out of debt, they're going to be like, that's awesome, but I don't really want to sacrifice or do this. But when you, like, lay up the numbers and you say, okay, we make this, we can cut this out of the budget, if we sell this. You actually put a time frame down on paper, they can actually visually see it, because it's like, okay, it's going to take this amount of time,

here's the calendar, could we do this? Like, it actually gives some tactical reasoning behind your why. Now, if those don't work, and you guys keep going around and around and around, I would honestly get a third party involved. So this could be maybe the Ramsey show. Like, hey, you're listening to this podcast or read this book. Us at Ramsey could be the bad guys for a little bit.

or I'll be honest, too, I would get a therapist involved. If it's something that's really stressing you out and you guys are on complete opposite pages, it's going to be really hard to have a very fruitful marriage if you're running on two separate tracks when it comes to money. Because when you are married, you are one. You are sharing a life with someone and money's a big part of that. All right, the second question I get asked a lot is, should I pause investing to pay off debt? And yes, we do recommend this, which I know a lot of people freak out and they're like, oh my gosh, Rachel, but I'm the match.

I'm going to miss the match. It's free money and all this. But when you're getting out of debt, staying as focused as possible, putting as much money as you can, taking everything that is possible to throw out of the debt, to get out of debt as quickly as possible,

is going to free up your income. So this is really big. And again, it's pausing it because you'll press play and invest 15% of your income into retirement after it's done. But getting debt out of your life and getting your income back

to be all yours is huge. All right, the third question that I get asked a lot is, how much house can I afford? the housing conversation, you guys. It's so difficult because it's so frustrating. I get it. Like when you're buying a house today, interest rates, inventory, all of it.

It's not awesome. But here's the deal. When you can buy a house that is best for your budget, that is when you need to buy a house, regardless of what is going on in the market, when it is best for you. So I want you out of debt

with a fully funded emergency fund of three to six months of expenses. Okay, I want that done first. And then I want you to save up for a down payment. If you're a first-time home buyer, 5% is great. If you're not, I would bump it up to like 10, 15%. If you can hit 20% down payment, you can avoid a lot of fees and penalties like PMI, and it's great.

But that's the range of down payment I want saved. And then when you buy the home, make sure you're on a 15-year fixed-rate mortgage and your payment is no more than 25% of your take-home pay. So that whole formula together sets you up to buy a house. Now, I always tell people, I understand that's a very conservative way to go about it. But listen, I've talked to so many people via social media, via at events, via on the Ramsey

show, that have so much house, you guys, and they are stressed out. We talk numbers and their budget real quick. So much of their mortgages eating up their house and they don't have an emergency fund. They have student loans still in credit card debt and they just feel so strapped. So when they thought this house was going to be a blessing and an answer to their family's dreams, it ends up being a curse and a burden. and it's stressful, and it's not what they wanted it to be. So I want you to be at a place financially to go into a house, to enjoy it,

and it not be a stress point for you. All right, the fourth common question I get is, am I an exception to the baby steps? And we get this a lot of different ways. Oh, Rachel, in my family, this, this, or in my job, this, or this, or this, whatever it is. Let's do you guys, the baby steps are the baby steps for a reason. I'm going to encourage you, do them in order, because they're in order for a reason. We're not trying to trick you into something weird.

This is the most efficient way to get from point A to point B, which is stressed, broke, not know what you're doing with money, to wealthy, in control, peaceful, know where you're going with your future. Like, the quickest way to do that tactically is the baby step. So do them in order, and I'm telling you it works. Because here's the deal. Spend a few years of your life working these steps,

and then maybe if you get to, you know, four, five, and six, or even seven, and you hate it, and you hate your life, you can always choose to go back deep in debt with no savings and all the things. I don't think you will do that. But I'm telling you, work the steps in order is the most efficient way to, again, go from not feeling in control and stressed and not budgeting and all the things to feeling a level of control. So if you're not familiar with the baby steps, I will leave a link down below. So click on it and read about it, understand it. Because quickly, the seven baby steps is a $1,000 emergency fund.

number two is to get out of debt. Number three is to get a fully funded emergency fund of three to six months of expenses. And then you're going to do four, five, and six together. Number four is funding 15% of your income into retirement. Babyset five is funding kids college. Babyset six is paying the house off early. Then once all that's done, or at least the house is paid off, kids' college fund is good, then you move on to Babysep Seven, and that is just to build wealth and be extremely generous. So those are the seven baby steps. The fifth question I get asked the most is, how do I budget with an irregular income? Now, this is a tough one, and I get it.

I'm on commission, my husband's on commission, so knowing what we're going to make every month, it's going to vary. So you have to kind of guesstimate before the month begins. Okay, here's what I think we're going to make, and you put that number at the top, and then you're going to list out all of your expenses, but you're going to prioritize a few things. You're giving as big, saving, especially if you're on babysubs one or three, that's going to be really big. and then your four walls, which is food, shelter, utilities, and transportation. Those are going to be prioritized.

Then everything else below, you're going to just prioritize. And then as the money comes in and when you understand, okay, here's what we're going to make on the 15th or the 31st or the first or however you get paid, then from there you can kind of figure out, okay, well, there be some budget items that we're not going to do this month because we don't have the income for it. Is there some that maybe we can actually bump up and enjoy some because it's a bigger month? whatever it is, you kind of have to fluctuate. But I get it. It takes a lot of intentionality and work, but it is worth it.

And I would also say, if you are in a seasonal job that you know it's going to be really busy one season and not as much the other, we call those hills and valleys. So like if summer is, like, insane for you and you make a ton of money in the summer, then take some of that money

and don't spend it all, put it into savings because when it gets to be November, December, and you need some money, because you're not making as much, you can pull from that account. So we call those hills and valleys, So if that is a rhythm for you, be aware of that. Today we're in talk about whether or not a home garden will really save you money.

So last year, my friend Heather Whitaker came on this show to talk about all things gardening. And she really talked about how she grew this passion because she wanted to grow her own food, you know, whether it was organic. She started with a salsa garden. I remember her saying and all of this. But she really wanted to feed her family really healthy foods. But it was really hard to buy all organic food at the grocery store because there was, wasn't a ton of room in the budget, which is so relatable. And I hear this from a lot of people

that really great, fresh food is just expensive. And Heather and her husband Carlos, again, they grow a ton of their own fruits and vegetables. They even have some chickens, and they live in the suburbs, you guys. So, like, they can do this. And that means you can do this. And they don't have this, like, massive, you know, farm. They live on about a quarter of an acre, and they do so much gardening off of that. So it's just encouragement that wherever you are, you can be doing this. So if you've had some curiosity about it and thinking, oh, my gosh, would this even be possible for my family and make sure to check out that video because she gives great advice. And in fact, I took some of her advice when we started gardening at our house. Yep. So last summer

was the first time we really got into it. When I say we 80%, 90%, 95% of this, is Winston. I'm the encourager and the admirer and the eater of the garden. But this was kind of like Winston's thing. He was like, no, I really, I really want to do this. So I'm going to share a couple of the things that we grow in the garden that we love that actually has saved us a lot of money, which is very nice. And I'll even give you a few tips based on things that I have learned in the process. So first, let's talk about savings. Did we save money? The short answer is yes. definitely saved us money on our grocery bill and saves us money as the weather gets better and we get deeper in the summer, we get more and more of our vegetables and our herbs and

everything. So when it comes to food that we typically would go to waste because we would use some of it, but then not all of it. And again, money just went to waste when I was buying stuff from the store. For example, in our garden, when we were growing tomatoes, this was really big. Tomatoes would always go bad in our house. I feel like we know. We know. We know, ever used all of them when I was, you know, when I bought them at the store or we switched and we're like, oh, we're not doing that recipe. For some reason, it just was like tomatoes were the thing that we used a lot. We wasted the most of and it's the thing I changed my mind on a lot. So cost-wise, is that buying a week's worth of tomatoes is about the same price of buying a pack

of seeds to grow them. So we're from $2 to $5. So when you hit about that second week of using your fresh tomatoes from your garden, you've already R-O-Ied. So we, we, we're going to be. We were very early in our process, you guys. So I went last night and picked some stuff from our garden. So we have three of these plants. So they're just starting to come. Again, not ripe yet. But we have three other big plants of these.

And these grow a ton, these plants. But I use these a lot. I use these on salads. I use this for Greek night. I use cherry tomatoes a lot when I cook. You can even do, like, fresh sauce if you blend them up, put them in the oven, you know, let them roast, all of it. So anyways, I love cherry tomatoes.

They're one of my favorites. and it's nice because I would buy a little pack at the grocery store. Yeah, and they're like five, six bucks. And these, they're everywhere. And it's awesome. So there are some unexpected crowd of favorites that we have. Halipinos, which I love. They're not ready yet.

I went last night. So give me another month, and I'll have some jalapinos for you. Another one, Winston loves it, and the girls love to pick it radishes. So we have a ton of these at the very front of our garden. And these are so easy to pick. And my girls, like, think it's awesome. But I will slice these up again and put on some. salads, but we love radishes. Also, we did carrots, which is great. Winston wants to do some

beats. My brother's doing beats in his garden, said they're awesome. So again, it's kind of almost like the ones that you're like, okay, the root, even root vegetables, to jalapinos, to bell peppers, all of that. We have in our garden, and we use a lot of. So having, again, access to more veggies in our backyard really makes us use them. So another thing is squash and zucchini. So here's like a little zucchini. It'll get bigger. But I sometimes stop buying these because I was like, oh, I'm going to use them, but they're in the garden, so I will cook with them now. Or squash. Don't laugh at my squash. It's not ready yet. But this little guy, yeah, but we have about four big squash plants. Now, ones that didn't work were our cucumbers. We did those last year, you guys, and they

ended up being whack. They had like spikes on them. It was really weird. I don't know. So I'm still buying English cucumbers from the store, but I love cucumbers, and for some reason, it didn't work. Another helpful thing that we grew that we used a lot was Romaine lettuce. So I use these a lot, whether it's for burgers or taco salads or salads or put on top of stuff. We use Romaine all the time, Caesar salads. And again, I would buy, you know, hearts, Romaine hearts at the grocery store. Sometimes use them. Sometimes again, you change your mind on what you're going to cook and they go bad. They go brown in like three or four days. So I had to throw them away. It was so frustrating. But the lettuce was so great. I'm so sad. It's out of season now. It's done. We did butter lettuce as well.

It was awesome. But now they're gone. So rest in peace. Old lettuce, but it was good. So again, at the store, the seeds to grow romaine cost about the same as it would a bag or two of lettuce. So growing these greens in your garden will not only minimize waste and fridge space, but also in the long run will save you a few bucks every time you go to the store. All right. The fourth thing that has saved us a lot of money, and this is a lot, you guys, is the herbs, okay? Are you ready for this? So, we have parsley, we have oregano, we have, rooseemary, and we have basil. We have, it's so sad, our little cilantro, but there was more.

I don't know where it went. I did dill, too. I love dill. And then I asked Amelia to pick me some mint, so she brought me one little leaf, so this was from last night. mint. So, again, so many herbs, and I do love fresh herbs when I'm cooking. And there was a time you guys, I would buy the little plastic thing that would have like eight basil leaves in it, and it's like $4 or like, whatever the thing is. It was always so frustrating, because again,

you don't have to always use the whole pack, but you wanted them fresh, all the stuff. So it just can cost so much money. And herb plants are so easy, you guys. They're so easy, and they save you money. And let's be honest, you just feel better about yourself when you go to your garden. and you pick out some herbs and you chop those up and you sprinkle them in and you say there's fresh basil in that pasta. Fresh basil. It just says something to the wholesome of your heart, I'm telling you. So again, whether it's, you know, buying herbs at the grocery store fresh, even buying seasoning. I mean, stuff can get just so expensive. So fresh herbs will save you money. And finally, my fifth favorite thing to grow in our garden has been our hibiscus. Okay, so this is a potted

plant, but they have these all over like the Caribbean or Mexico, and they're just the most beautiful plants. And they're really tough because they don't last long. So they will like end up closing up. But then there's like so many other blooms. And so you have to take it in in the winter. So we didn't plant it in the garden, but we have some plants around. And I just love Hibiscus. I think there's just so beautiful. And then Winston, when he dug up all of our lettuce, there was like almost half of our box garden that was empty. So he went and did some flowers throughout it. All these kinds. I don't ask me, I'm not a flower expert. But I love it too, because how great is it having fresh flowers in your house? Cut those things up, put them in vases, like in your kitchen,

in your bedroom. I mean, it's dreamy. And so you can start this again with seeds or just get some plants, you know, from Home Depot and then plant them in and you get more. It's just so fun, you guys. The whole thing is so fun. So yes, there is an investment in the front end because, especially if you want to raise garden, you got to buy, you know, the supplies and stuff to do it. So yes, there's an investment, but you're going to use it for years and years and years and years. So it's been so fun. And again, there's some takeaways from gardening that I want to talk you about. So again, I was surprised how quickly we were able to get started because it could be very intimidating. When you start something new, you're like, oh my gosh, like people do that. And I don't

know if I can. But I'll tell you, you have what it takes to do this if you want, to take some patience. And depending on your gardening goals, it can be more of a marathon than a sprint. But when Winston was able to do everything, even build the beds. I mean, I think he did it over a weekends. And then you spend a couple of afternoons, you know, finding what you want to plant and all of it. And again, it really didn't take that much time. Now, you have to water it and take care of it for sure.

But my point is, you can easily tackle this one in a weekend like he did. Also, keep in mind to start small. If your budget is tight at the moment, you don't want to spend a ton of extra money throwing into a new hobby and creating, you know, this whole thing where you're like, oh my gosh, am I doing this right? So create a sinking fund,

maybe put some money away for next year and be like, yeah, we want to start a garden. So again, there's a little bit of investment up front, but start small. Even just getting a basil plant in front of your kitchen window, right? Just incorporating something small like that into your routine can help you when it comes to something bigger. Okay.

Speaking of, another thing I've been reminded of throughout this process is how important it is to try, new things. Again, it's easy to look at other people's skills or hobbies and think, well, I'm just not cut out for that or I wouldn't be successful to do that. Listen, that's not true. Even growing our own food, it's been really practical, it's been budget-friendly, and it's been really fun and rewarding. So don't get me wrong. Some things have been easier to get the hang of than others in life, right? So cilantro, tough one. I'll be honest, the green onions. I didn't even show you all these, my Scalions. They actually ended up okay. I mean, they're just,

they're little guys, not terrible, but at first I was like, what is happening to y'all? So this, this took some love, but it happened. So thank you. Thank you, Scalions. Thank you. So I've learned a lot. Winston has, again, been the hero of this story, but it's been a really fun thing for our family. All right, my last piece of advice would be to pace yourself, okay? After a quick win or two, you might be tempted just to go and buy, seeds to everything and grow everything. But remember, you're still human. And there may be a night, you're like, I just want to order pizza.

So do that, okay? So don't plant more than you and your family realistically can eat. That was us last year. We planted way too much stuff. So be realistic about it. And again, if you go a little overboard, it's fine. But you'll learn and figure out, okay, what is best for our family? And it's so fun.

And again, if you haven't seen my video with Heather, because she's a major expert on this, I will put a link in the description below. And gardening, again, it's a fun new thing that our family's doing, and it's able to save you a good, you know, 20, 30 bucks at the store, which is awesome. And I think it's the gift that just keeps on giving. Today we're talking about how to survive a financial emergency.

And I know this is something that we don't want to think about, but let's be real. This is real life, and it's something that we have to prepare for. So at Ramsey, we talk about a starter emergency fund of $1,000 is what you need to really dive into Baby Step 2, which is paying off all of your debt, then once your debt is gone, then you can bump up that $1,000 emergency fund to a fully funded emergency fund of three to six months of expenses. So, again, these two phases of your emergency fund, your $1,000 and your three to six months fully funded emergency fund is to provide protection for you from emergencies. But today I'm going to talk about what does it look like when disaster strikes and your emergency fund doesn't cover all of your expenses.

So whether you're on baby step two and you just have a thousand dollars saved, or maybe you're facing a large-scale emergency that requires your entire three to six months of expenses of your fully funded emergency funds. So there are some things that you can do and things you need to keep in mind if you or a loved one is ever in this situation. So first, let's make sure that we are on the same page about what an emergency is. A true emergency is unexpected, necessary, and early. So getting into a wreck on the interstate, maybe injuring yourself all cooking, or maybe getting

laid off from your job, all of these are considered emergencies and large expenses that you can anticipate, like needing new tires, taking an annual vacation, paying for kids' braces, all of that. That is not an emergency. And again, this is why budgeting is so, so important. So when you can anticipate some of life's regular expenses, again, big or small with your budget, you don't have to panic about fluctuating costs month to month. And like my dad, always says a crisis becomes an inconvenience when you have an emergency fund. So building that margin creates such relief when really hard things happen. But even though it's rare, some circumstances come into your life that is just too much for even your emergency fund to handle. So here are five steps that you can take

when an emergency is bigger than your emergency fund. The first step, is to only pay minimum payments only on all of your debt. So when an emergency happens, you want to focus on your four walls, which is food, shelter, utilities, and transportation temporarily. That's it. And for the time being, you need to maintain your existing debts, making sure that it doesn't grow any larger, and keep the new expenses as small as possible. So there's more on how to do this coming up next. But after you get your bearings, then you're going to be. can channel your momentum back to the debt snowball. So again, paying just your four walls and minimum payments on your debt so that you don't have to pay more interest. Paying those minimum payments

is really important. And then above that, to be able to say, okay, I need this extra cash for the emergency. So remember, nothing is permanent and certain seasons call for this type of thing, and that's it. So it's season by season, situation by situation. All right, the second step is to negotiate the cost of your emergency. So for some of you, this one may feel a little out of your comfort zone, but making a couple of phone calls and asking some questions can actually save you money. So if a family member lands in the hospital, call the billing department and ask about discounts and financial aid. Ask if there is a payment plan option and see if that maybe feels more manageable to work into your budget. Be kind with this person that's on the phone. Be upfront with them and

be honest with the fact that you're serious about paying your bill. And if you do all of that, sometimes they will work with you. Or let's say you're dealing with the effects of a widespread emergency, like a natural disaster or a massive layoff crisis. Then you can call around to local nonprofits and charities. And some organizations may be offering things like free child care or food or home repairs. So when in doubt, look for helpers. There are always more resources than you think that there are out there. So just look around and ask questions. All right, the third step is to shop around if you can.

So let's say you have some mandatory car repairs. We'll ask friends if they have a mechanic that they recommend, call around to local shops and ask to schedule an estimates. And make sure you don't allow them to do any work until they give you an exact price on what you can expect to pay. But if it's out of reach, then ask them what is the bare minimum to get you just back on the road. Or maybe you need to replace a large appliance, like a washer or dryer.

So first shop online and see if there's one on Facebook Marketplace or Craigslist. That's really cheap. Maybe it's even used. But you buy it, you use it until your emergency is over with. Then you can replace that again with a nicer washer dryer later on down the road. But if you need one now, maybe a cheap used one is the best way to go about it. All right. The fourth step is to make extra money fast.

So start looking around and find things around your house that you can sell. So I know this one might hurt a little bit, but getting some extra cash might be really helpful. So this could be furniture, TVs, designer accessories, jewelry, bikes, workout equipment, like anything that you can find, sell it. Clean it up, snap a picture of it, put it online, and see if you can get some money. Also, budget cuts are a really great option, too. So any streaming services, memberships you have, eating out, any of that cut what you can out of your budget till the storm passes, and you get back on solid ground. And then finally, lean into those side hustles. So drive for Uber, you know, for a month,

pick up a dog sitting gig, wait tables on the weekends, do what you can to throw extra money at this crisis. And I guarantee if you try one or all of these ideas, you'll be surprised how much extra cash you could bring in in just the next month. All right, the fifth step is to build back your emergency fund once you've paid your bill. So finally, it's time that you see the light at the end of the tunnel. The dust is settled. When you start to move forward, you first want to build back up your emergency fund. So again, if it was that $1,000 that you use for your emergency before you go back

to aggressively paying off your debt, make sure to build that back up. Or even your three to six months of emergency fund, if you're able to invest, and build that back up, that's great, but you may even want to pause investing if you've already moved on to Babysips 4 or 5 and 6 to build that emergency back up. Having cushion in your life when it comes to money is so key. And again, if something happens again, something unexpected, you have the money in place. All right, you guys, I hope this video was really helpful. And remember, life is going to happen. But you can learn to pivot and troubleshoot when difficult situations come upon you. And if you're someone who is new to the idea of an emergency fund,

make sure to check out Financial Peace University. This is our nine lesson class that teaches you all about the seven baby steps and gets you on the path to being prepared and control and building wealth. So visit ramsysolutions.com. Check that out. So you guys, financial emergencies are going to happen. So make sure you have an emergency fund in place and do the things you need to do, get through it. All right, you guys. Thanks so much for listening to this episode. If you have not shared this podcast with a friend, make sure to do that.

Just hit that little button and spread the good news. And also leave a review if you haven't. It is really, really helpful to us. Thanks again, you guys. And remember to take control of your money and create a life you love.